NEW DELHI: The entry of Jio Financial Services (JFSL), a Reliance Industries group company, would only help boost credit growth in the country, says YS Chakravarti, CEO of Shriram Finance, the country’s second largest Non-banking Financial Company (NBFC). In an interaction with the New Indian Express, Chakravarti said he does not see JFSL’s entry into the loan business as competition, instead sees it as an opportunity for partnership.
“I wouldn’t call it competition because segment-wise it is different. The advantage today is that everybody is growing. You don’t see any NBFC that is not growing. The requirement of credit is so much that at different levels, there is room for a lot more lenders,” he says. Chakravarti says he has always advocated that banks, NBFCs and fintechs should work together as partners rather than competitors.
Shriram Transport Finance, Shriram City Union Finance, and Shriram Capital Limited (SCL) merged in November 2022 to form Shriram Finance Limited, country’s second-largest NBFC. Vehicle loans account for 70% of its loan portfolio of Rs 23.3 lakh crore, while the rest is accounted for by MSME, gold loan, farm equipment and personal loans.
The CEO says vehicle loans (commercial and passenger vehicles) would continue to be a major part of its loan book. However, in future he expects the composition to be in 60:40 ratio. Speaking about the RBI’s new initiative – Unified Lending Interface – he says ULI would largely be an information gathering platform.
“It is a platform where you can pool all the data in one place, your bureau score, your GST returns, your bank statement. The RBI governor is even talking about pooling land records. So, when you have all the data at one place, your life becomes easy. The data is much richer for you to make a decision, and for the customer also, the turnaround time will become faster. The customer doesn’t have to go door to door trying to get credit,” explains Chakravarti.
On higher regulatory scrutiny, Chakravarti stressed on the need for stringent regulations as NBFCs are working with public money.