Growing Fintech Industry a Problem for Traditional Lenders

The fact that on one side new-age Fintech businesses are growing by leaps and bounds and on the other side Indian banks are still struggling with a high number of NPAs is a sign of a possible paradigm shift.

Although traditional lenders are still on the dominating side, their progress has declined. According to McKinsey &Co.,the total amount of stressed assets that these banks are dealing with now has exceeded $96 billion. However, Fintech companies are apparently on the rise. Just last week Paytm announcedan $1.4 billion investment by SoftBank Group Corp. Similarly, Singapore’s sovereign wealth fund GIC Pte has increased its stake in Capital First Ltd. to 14 percent.

According to experts, only 20-21 public-sector banks in the country are strong enough to survive the wave. For the rest, they must step up their game.