was speaking at an event organized by the brokerage Motilal OswalChowdhary further said that businesses like Unified Payments Interface (UPI) are loss-making and also short of cash flows, and wondered how their valuations keep rising.
Entities like Google Pay and Walmart-backed PhonePe are investing money in such products because they have some other business to do. The way forward for such businesses is to either act as a distributor and collect fees, or compete with banks by joining similar businesses, he said.
Chowdhary said the RBI has made it clear that it will regulate these players if they want to become non-bank finance companies and enter the lending game, adding that such companies will not do so. “Today, the problem with technology is that there are companies that are being funded through venture capital, which can then spend the money to acquire customers, making huge losses and losing more value in the process. Banks or other institutions that have been around forever can’t afford to play that game,” he said.
Chowdhary summarized, “My view is that at the end of the day, they (UPI apps) have gained market share, banks have been a little behind, but if they want to make money… cash flow needs to show up eventually.” Is.”
He also expressed confidence about the quality of retail assets for large lenders investing in the technology, but warned that NBFCs and some state-run lenders could be on a risky path with this.
He added that we are in a prolonged period of sustained high-debt growth cycle and it is only the global factors that are worrying.
Speaking at the same event, HDFC’s Keki Mistry said its growth will accelerate only after the mortgage major’s merger HDFC bank Because of their distributive powers.
He said that only 2 percent of the more than 7 crore HDFC Bank customers are HDFC customers, while currently only 2,000 out of 7,000 branches sell their home loans.