The business and financial services sector (BFSI) plays a crucial role in realising the Prime Minister's vision of transforming India into a developed nation by 2047, said former RBI Deputy Governor Rajeshwar Rao.
Speaking as the chief guest at the eighth BFSI Summit of Dhanam Business Media, he noted: "The sector will serve as both a lubricant and facilitator for growth, helping to meet the demands of a rapidly expanding economy."
To transform from the current $3.75 trillion economy to a $30 trillion economy by 2047, GDP growth would need to nearly triple over the next 22 years. To maintain the current ratio of financial assets to GDP, the size of the financial sector would need to expand to approximately $50 trillion. This highlights the immense growth potential within the financial sector.
However, achieving this growth will require the sector to overcome several challenges:
Growth must be consistent and accompanied by high asset quality. Beyond traditional risks, key areas of focus will include technology risks, operational resilience, climate risks, crypto assets, and cybersecurity threats.
As technology advances, it is crucial to maintain empathy with customers. With the rising risks related to fraud and data breaches, there is a growing need for stronger regulations to protect consumers.
As banking services become increasingly ubiquitous due to the growth of fintechs, bigt echs, and banking as a service (BaaS), institutions may risk becoming less visible.
To address these shifts, new regulatory approaches—such as hybrid regulation—and cross-jurisdictional supervision will be required, said Rajeshwar Rao.