Page 9 - Banking Finance October 2024

RBI CORNER

Banks Ramp up tech hiring management company (AMC) is ex- cation Loan Scheme to OCI
pected to inspire other banks to ex- cardholders. According to the RBI, OCI
as RBI Pushes for en- plore the sector, particularly smaller cardholders living outside India are
hanced Risk Management banks aiming to capitalize on the only eligible for education loans if they
As the RBI places greater emphasis on country's growing equity culture. Ana- are studying within the country.
financial sector stability, Indian banks lysts, including Param Subramanian The clarification also addressed con-
are increasing technology hires and IT from Nomura, suggest that this move cerns about whether such loans should
spending to address cybersecurity con- could set a precedent for more banks be treated under the Liberalised Re-
to enter the AMC business, offering a
cerns and adopt AI-driven solutions. mittance Scheme (LRS), which allows
The banking and financial services sec- fresh opportunity to generate fee in- resident individuals to remit up to
tor is expected to see a 12.2% increase come and boost profitability. $250,000 per financial year for current
in IT spending in 2024, focusing on ar- Previously, the RBI allowed HDFC Bank or capital account transactions. Banks
eas like advanced analytics, machine and ICICI Bank to increase their stakes had raised these questions to ensure
learning, and automation technologies. in insurance subsidiaries, signalling a proper treatment of education loans
provided to OCI cardholders.
Kapil Joshi, Deputy CEO at Quess IT trend that could extend to other finan-
cial sectors. Experts believe this regu-
Staffing, noted a significant uptick in RBI plans to revamp cur-
demand for cloud migration and latory shift could encourage banks to
cybersecurity professionals, while staff- create subsidiaries in areas like asset rency management infra
ing firm Teamlease projected a 6-8% management, which could enhance The Reserve Bank plans to comprehen-
growth in tech hiring within the bank- their long-term profitability. sively revamp its currency management
ing, financial services, and insurance infrastructure over the next 4-5 years,
(BFSI) sector in the coming year. The RBI Clarifies Education mainly to ensure adequate storage and
focus will be on recruiting tech-savvy Loan Eligibility for OCI handling capacity to cater to the future
talent to meet these emerging needs. cash needs of the growing economy.
Cardholders The creation of greenfield currency
More banks likely to enter The RBI has clarified that Overseas Citi- management centres, the introduction
AMC business after RBI zens of India (OCI) cardholders residing of warehouse automation, the instal-
lation of security and surveillance sys-
in India are eligible for education loans
nod to Indusind to study abroad. This clarification was tems, an inventory management sys-
India's regulatory decision to allow provided after banks sought guidance tem, and a centralised command cen-
IndusInd Bank to establish an asset on the applicability of the Model Edu- tre are being mooted to modernise
the existing infrastructure, according
to an RBI document.
India's Growth Potential Estimated at 7.5% or More:
The expected timeline for the whole
RBI Governor project is 4-5 years, according to the

RBI Governor Shaktikanta Das has stated that India's long-term growth po- expression of interest (EoI) issued by
the Reserve Bank of India (RBI) for
tential is around 7.5% or more, exceeding the central bank's current fore-
procurement of consultancy and
cast of 7.2% for the financial year. Speaking at the Bretton Woods
project management services for the
Committee's Future of Finance Forum in Singapore, Das emphasized that
this potential growth rate reflects the economy's ability to expand modernisation of currency manage-
ment infrastructure.
sustainably without triggering inflation.
"Despite moderation in the growth rate
Das attributed slower growth in the first quarter to reduced government of NIC (Notes In Circulation) in the last
spending during the national election period. However, he expects growth three years, analysis indicates that the
to pick up, projecting inflation to moderate from 5.4% in 2023-24 to 4.5%
growth will continue to be positive over
in 2024-25, and 4.1% in 2025-26. He also warned of the global risks posed
the foreseeable future though the pace
by persistent inflation, especially with some central banks maintaining re- thereof is expected to be slower over
strictive monetary policies to counter inflationary pressures. the next decade," the document said.

BANKING FINANCE | OCTOBER | 2024 | 9