DFIs and the Agenda for Development: Expanding ......and finance – making FinTech as the vital cog...
Transcript of DFIs and the Agenda for Development: Expanding ......and finance – making FinTech as the vital cog...
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DFIs and the Agenda for Development:
Expanding Possibilities
November 03, 2016
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Presentation Outline
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Role of DFIs
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DFIs across countries set up as public or quasi-public financial intermediaries with the principal objective of:
§ identifying and filling the gaps in a country’s financial sector
and capital markets; essentially addressing market
inefficiencies
§ providing dedicated long-term finance for activities or sectors
crucial for overall development of the economy
§ providing technical/ managerial expertise to new projects as
well as for expansion/ modernization of existing projects.
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Role of DFIs
DFIs have been playing a key role in:
§ promoting industrial and infrastructure development across
countries besides developing financial architecture in some
countries.
§ building an institutional structure for entrepreneurship
development, credit delivery and capital market
development
§ investing in under-served projects and under-capitalized
sectors to ensure sustainable and balanced growth and
development.
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Current trends in Development Finance
Ø The role of DFIs has expanded over the years from
Development Financing to Financing
Development.
Ø Many DFIs have now embarked on the path of
universal banking.
Ø However, DFIs continue to fulfill its policy
mandate of nation-building in a financially
sustainable manner.
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Challenges Faced
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Challenges faced
Ø Technological innovations – digital disruptions, crypto
currencies etc.
Ø Emerging competitors – Commercial banks/ FinTech/ NBFCS/
Payment Banks etc.
Ø Shifts in consumer behavior - rising customer expectations
Ø Changing regulatory and legal framework – changes in the
macro prudential approach, capital adequacy requirements etc.
Ø Changes on a macro-economic level
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Opportunities
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Opportunities
Ø Transforming the organization's business strategy to
stay relevant in the age of disruption
Ø Embracing technological developments in the
organization structure
Ø Specifically in a developing country context, pursuing
the goal of financial inclusion by ensuring last mile
connectivity
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Opportunities
ØEnabling
entrepreneurial
development,
skill building
and innovation
by assisting
government
schemes like
Make in India,
Start-up India,
Stand Up India,
Digital India,
etc.
ØProduct and
service
innovation
catering to the
shifting
consumer
demographics
and rising
customer
expectations
ØIncorporating
sustainability
and business
responsibility
as core
principles of
functioning
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Remaining sustainable in the age of disruption
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Remaining sustainable in the age of disruption
Ø Staying relevant by:
§ Being nimble footed and innovative
§ Adapting to the latest technology in the arena of banking
and finance – making FinTech as the vital cog in driving
the business model
§ Expanding the Bank’s footprint and bringing superior
banking services to the masses, ensuring accessibility
and convenience
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Remaining sustainable in the age of disruption
Ø Developing internal competencies and external
relationships:
§ Partnering various financial institutions and industry
bodies within the country as well as outside for promoting
cross-border investment and financing.
§ Optimizing governance structure
§ Enhancing internal efficiency by focusing on capacity-
building
§ Nurturing a dynamic work environment
§ Robust risk management system
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Remaining sustainable in the age of disruption
Ø Invest in sustainable and profitable businesses by:
§ Sustainable Financing - growing green debt capital market
by issuing green bonds and encouraging renewable and
clean energy financing§ Adhering to the Environmental,
Social and Governance (ESG)
standards while lending to
minimize adverse impact on the
environment and society at
large.
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Remaining sustainable in the age of disruption
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Ø Re-aligning business models with the changing needs of the
global economy while:
§ Pursuing a customer-focused strategy of sustained innovation
§ Raising capital to support the transaction costs of new
products and services.
§ Continuing to invest in medium and long term projects for
overall infrastructure development and higher social returns.
§ Supporting government initiatives, assisting in capital
formation thereby contributing to the nation’s developmental
goals.
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Innovate or Perish
The organizations that will survive today’s economic environment and succeed in tomorrow’s are those who will continuously innovate.
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Thank You