No jury for FE Best Banks ever has an easy task; picking winners from a pool of top-class lenders can be tough. Neither is it easy to decide which banker is the most visionary or competent, which one never misses an opportunity. For the 2015-16 awards, the jury’s canvas was a much larger one across banking products, fintech companies, non-banking financial companies (NBFC), apps and retail savings products. Chairman S Ramadorai, former chairman of Tata Consultancy Services, and his team — R Shankar Raman, CFO, Larsen& Toubro; Leo Puri, managing director, UTI Asset Management; Biswamohan Mahapatra, former executive director, Reserve Bank of India; and Sharad Sharma, founder, Ispirit — seemed to enjoy the time they spent exchanging their views on products and people. Whether it was the popularity of banking apps or an innovation in fintech, there was never a dull moment.
If ever there was a difficult time for banks, it had to be 2015-16. On the one hand, poor appetite for loans, both from companies and individuals in a sluggish economy, made it difficult to lend. On the other, state-owned lenders grappled with rising non-performing assets (NPAs) as a weak environment led to higher slippages. They were also asked by the regulator to clean up their balance sheets, and consequently, needed to set aside large sums as provisions.
India might be a large market with millions of unbanked or under-banked customers, and consequently, lots of opportunities. However, customer acquisition costs can be high and margins can be wafer-thin.
Among the public sector lenders that best weathered the storm is State Bank of India; a couple of its associate banks also did reasonably well and the jury was convinced the SBI group should be rewarded for its resilience. As for private sector banks, the jury was impressed with HDFC Bank’s performance—the lender succeeded not only in doing brisk business but also maintaining the quality of its loan portfolio. The team also credited City Union Bank among the older generation private banks as having fared well and lauded the strategy of Barclays’ India operations.
Despite their preoccupation with core businesses, banks have also innovated; churning out digital products to cater to their customers, both companies and retail. They have leveraged the latest technology to make life easier for consumers. ICICI Bank’s app was adjudged the best product in its category—there had been a fair bit of segmentation that the product offered making it attractive and convenient.
Kotak Mahindra Bank’s savings bank product was thought to be the best in its category; the team was all praise for its features. The world of fintech is an exciting one and the team put in a lot of work to assess the strengths and weaknesses of each entity. Given there is not too much information on companies and many of them have been around for a very short time, it was not easy to gauge which were the best performers. Which product was both innovative and also could be scaled up? Which product had really enriched the lives of users? Which company had a robust business model and looked like it would survive? These were not easy questions to answer but the perspective and personal insights ensured the best players—Finomena, Juspay and Policy Bazaar— walked away with the awards.