Reinvention continuous process that banks are adopting well: Top bankers

The bankers highlighted that lenders must stay agile and continuously reinvent themselves to stay relevant in a rapidly changing environment

India’s top bankers on Wednesday said that the country’s banking sector is entering a new phase of opportunity, driven by regulatory reforms, rising foreign investor confidence, and a revival in credit demand.

 

In a panel discussion with Business Standard Resident Editor (New Delhi) Vikas Dhoot at the Business Standard BFSI Insight Summit 2025 in Mumbai, IndusInd Bank Managing Director & Chief Executive Officer Rajiv Anand, Federal Bank MD & CEO KVS Manian, and Yes Bank MD & CEO Prashant Kumar agreed that lenders must stay agile and continuously reinvent themselves to stay relevant in a rapidly changing environment.

Banking model evolving

Federal Bank’s Manian agreed, saying the sector must keep adapting. “Rethinking the banking model is not a one-time exercise. The cycle of change is faster than ever,” he said. “With debt markets deepening and new reforms coming in, banks need to build expertise beyond traditional lending, especially in areas like project and capital market financing.”

   

Anand highlighted that the role of banks has expanded far beyond traditional corporate lending. He added that banks now play a larger role in services such as payments, trade finance, forex, and cash management. 

 

“Banks know where the opportunities are. They just need to be nimble and ready to serve different customer segments,” said Kumar. “Corporate credit demand is already picking up this quarter, and banks are well placed to meet that.”

Regulatory reforms seen as timely

The bankers also welcomed the recent wave of regulatory actions from the Reserve Bank of India (RBI) and Securities and Exchange Board of India (Sebi). Anand pointed out that the RBI's latest reforms, "the most in a decade," are aimed at improving liquidity management and easing operations for lenders. The RBI introduced 22 regulatory measures in its October monetary policy meeting.

 

Kumar described the current moment as a "wave of reforms", saying the timing aligns perfectly with rising foreign investor confidence in India’s banking space. “This is the right moment, with regulatory support and investor trust coming together, for Indian banking to build on its maturity and stability,” he said.

 

Manian said that to achieve India's 7-8 per cent gross domestic product (GDP) target, credit growth must touch 13-14 per cent, which will require close coordination between banks, regulators, and the finance ministry. “Growth depends on all three moving in sync,” he said.

M&A financing and consolidation

On the RBI’s new rules for merger and acquisition (M&A) financing, Anand said the move will allow domestic banks to capture opportunities that were previously going offshore. “We can now participate in onshore acquisitions. That’s a big positive,” he said.

 

Manian noted that M&A financing will require banks to develop deeper expertise. “It’s not vanilla lending, it demands understanding of deal structures and risks,” he said. “Banks with investment banking capabilities will have an edge.”

 

Meanwhile, all three bankers agreed that consolidation, particularly among mid-sized private banks, could create a stronger, more resilient sector. Manian said India may eventually be home to eight to ten large banks, evenly split between public and private players. “That’s the direction we’re headed. The mid-sized banks have a clear opportunity to scale up,” he said.

 

Kumar added that growing foreign investment in Indian banks would support this transformation.“Foreign capital will help mid-sized banks grow into large ones. That’s essential for meeting the country’s development needs,” he said.  Catch all coverage of the Business Standard BFSI Summit 2025 Day 1 here