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YES BANK marches on as a technology company in the business of banking

Rana Kapoor, MD and CEO, YES BANK, speaks about the bank's future-ready technology initiatives that are fully geared to bring the future of banking to the present

Recent achievements of the Bank

YES BANK is the 4th Largest Private Sector Bank in India. Now in its 15th year of operations, YES BANK is well poised to capture mindshare and market share at an increasing pace. YES BANK has strong performing businesses across Corporate, MSME and Retail, which coupled with healthy Capital position and resilient Asset Quality, equips it to continue to post strong growth and healthy profit delivery.
As the Bank continues its robust growth in the next phase, our focus will be on growing YES BANK's Retail banking division along with a strong growth in the corporate segment. We aim to achieve a healthy retail loan book - a 40 per cent of our overall lending portfolio - by 2020.
In the last three years (FY14 to FY17), YES BANK's profit has grown  at a CAGR of 27 per cent to INR 33.3 billion. Moreover, in FY17, YES BANK contributed 7 per cent of the entire Banking sector profits which further increased to 10 per cent in H1FY18 making it the 4th most profitable bank in H1FY18 (Source Capital line, include all Private and Public Sector SCBs).
The YES BANK brand was recently recognised as the 22nd Most Valuable Indian Brand by WPP BrandZ report 2018 with the brand value of $2.62 billion.
In FY18, YES BANK also announced listing of its debut $600 million MTN bond on INDIAINX, largest ever debut made by any Indian bank on the index. The Bank also forged an agreement with the European Investment Bank to co-finance $400-million funding for renewable power generation in the country.
The Bank has also furthered its technological innovations, data analytics prowess in particular, in addition to enhancing the knowledge quotient of its Human Resource capital. By investing in people while creating robust digital ecosystems such as Payments (market leader in UPI merchant payments), API, AEPS and Blockchain technologies and Fintech through long-term partnerships, YES BANK is poised to be the cutting edge Digital Bank in India.

Expectation for the banking sector in the coming years

India is in a state of consolidation with strong transitional undercurrents at various cross sections of the economy. It has peaked in the BFSI sector and the health of the sector and the economy are expected to only improve post the progressive changes taking place. The overall economic outlook is positive.  
The asset quality problem in the Indian banking industry, mostly a manifestation of past adverse macros, policy inconsistencies, and inadequate risk appraisal, has now plateaued in my opinion and will only go down from here. In addition to creation of critical institutional architecture in the form of CRILIC and IBC, the NCLT has started to deliver on asset quality resolution with unprecedented speed in judgments seen in FY19.
Further, with pick-up in economic activity, specifically growth in infrastructure, surfacing of GST benefits, phasing out of the effects of demonetisation, the extent of leverage will reduce, which should also help in cyclical reduction in systemic NPLs.
Also, India's burgeoning young population puts India in a sweet spot with one of highest penetration of digital technologies in the world with swift adoption rates bolstering commerce, communication and the financial ecosystem greatly.
It's also important to note that despite a healthy and robust roadmap, a significant portion of India's population still remains un-banked or under-banked and without access to financial investment instruments like insurance, mutual funds and others. This challenge can be overcome through adoption and effective use of technology solutions like Data Analytics, Blockchain and Artificial Intelligence (AI).

Overseas operations and presence in the UAE

The India-UAE bilateral relationship has progressed impressively with India emerging as the largest trade partner of the UAE over the last decade. In fact, India is one of the fastest growing economies in the world today and quite naturally the opportunities between India and the UAE are getting catalysed. The next phase of India's growth engine will be powered by the MSMEs (micro, small and medium enterprises), which will increasingly need cross-border partners and banks can act as great conduits to help open new markets for them, especially in the current context of India-UAE food corridor.
The UAE is universally recognised as one of the foremost international financial centres globally, with bilateral trade expected to cross $100 billion. Also, it is one of the key global wealth management hubs, and therefore YES BANK's Abu Dhabi Representative office complements our Asia strategy perfectly. The Abu Dhabi Representative office acts as a great platform for servicing YES BANK's existing global client base.

Products and services for NRIs

As a proud homegrown Indian Bank, YES BANK is proud to offer superior products and services to NRI customers across a wide range of product offerings such as NRE (Non-Resident External), NRO (Non-Resident Ordinary), FCNR (Foreign Currency Non-Resident) and RFC (Returning Foreign Currency - for returning NRIs) to channelise their repatriable and non-repatriable income. Along with the best-in-class rates for Savings and Deposit accounts, numerous benefits are provided to the NRIs across the entire gamut of financial needs, viz. online remittance channels through Wire Transfer and YES Remit - YES BANK's Easy, Fast and Secured Online Money Transfer option to India, various insurance and investment products coupled with state-of-the-art digital solutions such as Net Banking, Mobile Banking, YES Robot and YES Secure facilitating banking requirements within India in a secure environment.  

Technological innovations

YES BANK has always been ahead of the curve in terms of process, product and service innovations and is also accelerating these through pertinent digital interventions. We strongly believe that YES BANK is a 'Technology company in the business of banking'. From launching chatbots for customer connect and using blockchain for transactions, to being one of the first banks to implement UPI for enabling digital payments and deploying Robots in the mid, back and front offices, YES BANK has already taken a lead in this sphere.
YES BANK has particularly seen significant movement in the payments partnership space. Today the Bank commands ~50 per cent market share in UPI - the merchant transaction space driven by creating payment ecosystems.
The Bank has also won multiple national and international recognitions, and has recently been adjudged the Global Winner in Payments category at 'The Banker - Technology Projects Awards, 2018'.
Going forward, we believe with growth of connected systems - Big Data and AI - ML, among others - should galvanise significant progress in the Fintech space and YES BANK's 'Future-Ready' technology initiatives are fully geared to bring the future of banking to the present.

Prospects for the Indian economy in 2019-20

The year 2019-20, in my opinion, will be the year when India's strong domestic fundamentals will insulate it from a global environment fraught with uncertainty and volatility. Structural reforms that were set in motion over the last two to three years such as GST, Digitalisation, Insolvency and Bankruptcy Code, and Ease of Doing Business, are now stabilising and I see these beginning to unleash positive impulses in the economy over the course of 2019-20, with strong economic multipliers.
As we move towards 2019-20, the general election outcome will unfold early on in the year. I expect the elected government to reiterate the medium-term objectives of maximising growth and employment, and shape the next set of policy reforms to achieve them.