Page 52 - Banking Finance January 2024

ARTICLE

of interest rates, it is quite possible that P2P platforms may revolutionized the industry leading to the rise of frictionless
diversify their products into education loans and mortgage credit. Peer to peer lending is likely to create a disruption
loans in future. in future and may bring transformation. It has the potential
to change the way of lending. Putting in place the measures
Capitalizing on the accessibility, convenience, innovation and to protect Investor money is a key challenge which may be
tech driven solutions experienced P2P platforms may create addressed through applying risk mitigating strategies and
disruption in the industry and resultantly eat out the market awareness among all.
share of banks specifically in personal and MSME segments
as many customers prefer easy, fast and unsecured loans Platforms need to strengthen their internal system along
setting aside the interest rate as ticket size is smaller and with highest levels of corporate governance while investors
these loans are granted for shorter duration. have to manage the risks effectively. Government and
regulator play a crucial role to promote the digital lending
Rather than competing with P2P platforms banks may by adopting self regulation or least regulation strategies in
consider collaborating with them. Collaborating with a P2P initial phases. Banks may become partners to be a part of
platform will provide banks opportunity to serve the big growth story while individuals and small businesses being the
chunk of underserved segment at lower cost. This will help biggest beneficiaries of frictionless and easily accessible
the banks strengthen their balance sheets and improve credit.
bottom lines. Legislation and regulatory guidelines play a
key role in this partnership. References:
https://www.lendenclub.com
For example, UK banks must refer the borrower to an https://www.investopedia.com
alternative lender which they have returned or rejected as https://en.wikipedia.org
per the legislation. Banks may utilize the tested algorithms https://www.i2ifunding.com
and proven technologies of P2P platforms to serve small https://www.etmoney.com
businesses wherein they may get credit in a day. Banks may
https://www.lendbox.in
also explore a new revenue source by selling pool of high
https://www.rbi.org.in
yielding loans of P2P platforms to the investors.
https://mobikwik.com
Conclusion (Note: Views expressed in the article are of the author and

Evolving needs of customers and technology has not of the bank)

India GDP can touch $5-trillion by 2026: Panagariya

Economist Arvind Panagariya said there are good prospects that India will become the world's third economy by the
end of 2026, sooner than nearly all current predictions. "During the past two decades, India has grown at an annual
average rate of 10.22 per cent in current dollars. At this rate, India's GDP in current dollars will reach $5 trillion in
2026 and $5.5 trillion in 2027," said Panagariya, who was earlier Vice Chairman of NITI Aayog and is now an Eco-
nomics professor at Columbia University. India is now the world's fifth-largest economy after the USA, China, Japan
and Germany.

PFRDA allows NPS subscribers to contribute via UPI QR code

Pension fund regulator PFRDA allowed National Pension System (NPS) subscribers to deposit their contributions di-
rectly under the DRemit process through the Unified Payments Interface (UPI) QR code. This advancement aims to
simplify the contribution process, making it more accessible and efficient for NPS participants, the Pension Fund
Regulatory and Development Authority (PFRDA) said in a statement. The National Pension System (NPS) has long
been a reliable savings avenue for those looking to secure their financial futures, it said.

46 | 2024 | JANUARY | BANKING FINANCE