MUMBAI: Veteran banker KV Kamath is now the chairman of Jio Financial Services, helping guide its expansion in a crowded market. Kamath, credited with turning ICICI from a staid development financial institution into an aggressive retail powerhouse, remains upbeat on India and technology. Excerpts:
On PM Modi's appeal for conservation
PM Modi's appeal to defer gold purchases and conserve fuel is seen as a call to prepare for difficult times. Kamath said, "The 25-year growth trajectory towards Viksit Bharat remains intact. The underlying drivers—investment in infrastructure, urban transformation and the adoption of new technologies—continue to be firmly in place. These are structural in nature and are not easily derailed."
He added that it is prudent for the government to assess emerging headwinds in a changing global environment and calibrate the response. "The impact of current disruptions on Indian citizens is relatively contained when compared with those in several other economies. In this context, conservation assumes importance at two levels. One is efficiency in usage, and the other is the prudent management of foreign exchange."
Kamath noted that India's macroeconomic strength provides comfort and ensures the growth trajectory is not unsettled. "There will, of course, be near-term challenges, and these may persist until global conditions stabilise. However, they are unlikely to materially disrupt the broader growth path."
On banking reforms
Regarding the government's plans for a high-level committee on banking reforms, Kamath highlighted five key areas. First, sustaining the current strength of the banking system, which he described as exceptionally clean. "Net non-performing assets, by and large, are less than 50 basis points. Mostly in the 25-35 bps level. You can't ask for better."
Second, banks need to look at growth and raise capital efficiently. Third, technology, especially AI, will redefine banking. Fourth is inclusion, and fifth, the role of institutions like banks, NBFCs, and new age players will evolve, requiring a defined architecture for efficiency and stability.
On fintech challenges
Asked if banks are fleet-footed enough to take on fintechs, Kamath said banks are built on legacy systems, but new waves like cloud, open source, SaaS, and now agentic AI require institutions to be native in their approach. "Good news for India is, we have young people who can understand this. We have the people who can implement this and frontline people who can handle it."
On future retail demand
Reflecting on the shift from white-collar jobs, Kamath said, "We used to say for every white-collar job created, there are four other jobs created. My view is that because of where we are on our journey, we may have a change in the mix of jobs. We may not have the white-collar jobs we had 25 years ago, but the growth path will require a whole lot of skills where you may wear a blue jumpsuit and not necessarily a tie to go to work."
On private investment
Regarding the debate on private investment not picking up, Kamath said corporate investments need to be tracked through balance sheets, not bank lending. "A reasonably small company might have a profit of Rs 300-400 crore a quarter. Adding back depreciation, they are generating Rs 2,000 crore themselves. They don't need to go to a bank for a loan to expand. Unless it's a massive greenfield project like a steel plant, they fund through cash flows. The real number to look at is the increase in Gross Fixed Assets and Capital Work in Progress year-over-year for all of corporate India."
