“The next phase of India’s growth story
will be driven by technology “
Deepak Parekh HDFC Chairman
Technology has been changing for
centuries but we find that today the rate of change is faster. India’s growth
story is the story of technology from the IT sector to the Pharmaceutical
sector we have become a global player in technology. Yet if we look deeply into
the major fields of new technology areas they are not being produced or started
in India. We have become the second hand user of these systems but not the
originators of these. Taking the example of Facebook, the social networking
site valued at over 400 billion US dollars India is the largest consumer base of
the social network but we are not the creators and developers of the system .In
defense sector we see India lacking the technical know-how and expertise to
provide crucial components for our submarines and missiles we import 70 percent
of all our military hardware. If we look closely at our famed IT and Pharmaceutical
sector we find that in the IT sector we are mostly BPO s and Third party
software developers .No major operating system or crucial software’s are being
developed in India. On looking into the Pharmaceutical sector we find the
R&D lacking and the major production is only of cheap biosimilars or
generic medicines only a few original medicines are manufactured and conceived
in India. This can be said of all the major technology based industries in India.
Nations
have been growing with the help of engineering and technology, especially if we
consider China Japan and the four Asian Tigers. We ourselves must follow their
path to nurture the technological prowess of our country.
In case
of traditional banking the banks don't seem to be proactive in nurturing
different technology ecosystems whether it was the IT boom or Pharmaceutical
growth the major drivers were VCs and other investors. For the coming decades
we may be going towards an era of completely branch free banking with the
advent of digital technology .Prime Minister Modi’s Digital India Mission as
well as the BharatNet are a part of this larger technological transformation
that is about to hit India .In this the banks can play a proactive role in
making the technological growth of India possible. In this noble task State Bank of India would
play a major role. Being the largest bank in the country with 22 percentage
share in the banking sector of India and with a huge reach SBI is in the unique
position to develop and grow the technological frontier in India
How
SBI can take this challenge?
Traditionally
bank financing is done on the basis of projects. These projects are in sectors
that are diversified and projects financed or corporate loans provided. For the
future SBI could make a separate Technology/Engineering Vertical or Subsidiary
that takes care of the financial needs of the entire span of the sector from
manufacturing to IT and Telecommunications .In this the expertise of the bank
in lending to these fields would be collected and focused lending would take
place .This is very important as we require the sector to be free from the classification of the being SME or
MSME or large corporate and look at them with eyes of whether they are technology
focused companies or not . An all India technology network that is connected
with the reach SBI has with different education institutions and research labs
would be required to make a systematic approach in this area.
Loans
that are treated separately would have a better oversight and direction crucial
to the sector. A proactive management of the assets in the sector where SBI can
become a link for all the sector different players in the technology sector
thus providing valuable resources to help different players while being
relevant in the market .This is the basic step required .The second step that
the bank would have to do is to force technological changes in India. Take for
example the agricultural sector which doesn't have the full reach of technology
that the world has achieved .The bank has to make this the priority in
agricultural lending. In the field of rural development emphasis on technology
would help the nation and the bank at the same time. The NGO’s and Self-help groups
which is the bank already has a relationship can be tapped. A combined vision
towards all lending in this sector is required. Other banks would follow soon SBI’s
lead.
Ultimately
the bank should transform into a technology driven organization that moves forward
for a better India. Other corporate areas where the bank lends it money can be
also directed to follow this prescription of making the Individual sector move
towards technology and growth. The expertise that the bank would grow could be
carried over to other than banks and a great revolution towards digital
technology where SBI would be leading figure. Future possibilities are not
limited to the sector but will have a cascading effect on all the different
sectors and will make India into a “Developed Superpower”.
Prashant Tirkey
