The 4th edition of the FE Modern BFSI Summit convened top financial minds to chart the future of a $5 trillion economy. From the RBI Governor’s policy outlook to deep dives on AI, capital flows, and digital banking, the summit unpacked key shifts shaping India's financial and regulatory landscape.
The governor signalled that further rate cuts will face a higher bar as inflation cools, even as he cautioned that it's not over yet. (Source: financialexpress)
In a year defined by digital flux, regulatory recalibration, and India’s $5 trillion economic ambition, the fourth edition of Financial Express Digital’s Modern BFSI Summit brought the country’s financial nerve centre to Mumbai’s ITC Grand Central. With the likes of RBI Governor Sanjay Malhotra, DFS Secretary M. Nagaraju, and HDFC veteran Deepak Parekh setting the tone, the summit sparked high-voltage conversations on AI-driven finance, rate cuts, regulations, capital allocations, talent, growth investing, insurance, and more.
The discussion began with a fireside chat with RBI Governor Sanjay Malhotra ahead of the upcoming Monetary Policy Committee (MPC) meeting on August 6. The governor signalled that further rate cuts will face a higher bar as inflation cools, even as he cautioned that it's not over yet. Despite a 100 bps rate cut since February, Malhotra noted, “It does not mean a reversal of the easing policy—there still can be a cut.”
He noted that “the battle against inflation is won, but the war continues,” with the RBI projecting inflation at 3.7% for the year, though analysts expect lower figures. Malhotra highlighted that transmission of the 50 bps rate cut by June was swift, and the RBI has “enough ammunition” if needed.
Defending the 100 bps CRR cut, he said it wasn't only about liquidity, but also about reducing intermediation costs to benefit both savers and borrowers. Malhotra stressed that price stability remains the RBI’s core mandate, aligned with supporting growth.
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On regulatory reforms, the RBI is consolidating over 8,000 circulars into 33 thematic areas, aiming for one master circular. A regulatory review cell will periodically streamline outdated rules. The central bank is also reducing compliance burden and adopting a consultative, impact-driven regulation framework.
Regarding UPI, Malhotra affirmed its sustainability as a public good, with government support covering costs. He also ruled out any review of promoter shareholding limits in banks, emphasising that “no individual person should exercise undue control.” On de-dollarisation, he said, “The dollar will be here for a long time.
Building on the RBI Governor Sanjay Malhotra’s insights on regulatory evolution and institutional readiness, Dr Prabina Rajib, Director of BIMTECH, in a fireside chat, outlined how education must evolve to meet the demands of a tech-driven financial era.
She emphasised that classroom learning must go beyond textbooks to develop professionals capable of leading innovation with integrity in today’s volatile regulatory and digital environment. By revamping the PGDM curriculum to include fintech, insurtech, business analytics, and ESG risks, she said BIMTECH ensures that students stay aligned with the real-world shifts shaping the BFSI sector. The institute’s strategic collaborations with global platforms like Bloomberg also provide hands-on exposure and instil the global perspective essential for contemporary financial leadership, Dr Rajib noted.
Following her remarks on talent and education, Deepak Parekh, Chairman of HDFC AMC and former Chairman of HDFC Ltd, focused attention on a pressing structural gap -- the lack of housing for India’s middle class.
Parekh said that housing markets are now getting skewed towards premium and high-end luxury sectors, dismissing claims of low demand for affordable and middle-income homes as “absolutely incorrect.” He attributed the slowdown instead to supply shortages. With India’s middle class projected to reach 750 million by 2030, Parekh called this segment a major opportunity. He expressed hope for a more stable second half of the fiscal year, anticipating stronger urban demand even as rural consumption may stay muted.
On NBFCs, he said banking support should improve as regulatory concerns ease. Highlighting what makes financial institutions future-ready, Parekh said it begins with trust and prudence, and is built further through customer-centricity, resilience, and the advantage of moving early.
In the next session on Unlocking Growth: Innovations & Capital for a $5 Trillion India, Gopal Srinivasan, Chairman & MD of TVS Capital Funds, and Navneet Munot, MD & CEO of HDFC AMC, explored the intersection of capital, innovation, and investor transformation.
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Srinivasan asserted that India’s growth story is not constrained by capital availability but by the scale of investment required. “Private equity alone needs about Rs 2.5 trillion a year. We estimate that we need about Rs 10 trillion annually on a steady basis,” he said. He called India “the most severely under-pensioned country in the world,” stressing the need to grow long-term domestic pools of capital to ensure financial security.
Highlighting a gap in deep tech, he added, “We have incredible process and regulatory innovation, but very limited technological innovation.” He emphasised the importance of fostering true risk capital to fuel innovation, stating that India’s punishing attitude toward failure stifles bold bets. “People only talk about the one company that failed in your portfolio, never about the 11 that delivered 30 per cent returns.”
Munot credited Jan Dhan Yojana as a transformative reform, integrating a billion people into the financial system. “Now the journey is from Jan Dhan to Jan Nivesh—transforming a nation of savers into a nation of investors.”
Srinivasan concluded with optimism: “In five to 10 years, we’ll see tech companies worth Rs 1 to Rs 4 lakh crore funded by domestic capital,” urging a “Kshatriya mindset with Baniya behaviour” for sustained excellence.
Next up was another fireside chat with Financial Services Secretary M. Nagaraju, who urged banks to step up credit growth to meet India’s ambitious economic goals and suggested a potential review of foreign direct investment (FDI) rules in banking to ease capital access.
“We also actually need to look at reviewing the current FDI rules in the banking sector to enable Indian banks to raise more capital…more patient capital,” he said, hinting at revisiting the 15 per cent single-entity cap and higher FDI limits.
While credit offtake rose 9.5 per cent year-on-year as of June 27—lagging deposit growth—Nagaraju stressed the importance of expanding lending to MSMEs and other productive sectors. He also called for diversified funding strategies, including conventional equity markets, issuance of Basel III-compliant AT1 bonds, tier 2 instruments, green bonds, sustainability-linked loans and foreign debt markets to fund domestic credit expansion.
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Despite a record-high capital adequacy ratio of 17.2 per cent as of March 2025, Nagaraju said credit deployment hasn’t kept pace with economic requirements. To support India’s aspiration of becoming a $30-trillion economy by 2047, he said bank credit to the private non-financial sector must rise from 56 per cent of GDP to around 130 per cent.
He also called for enhanced digital capabilities, ESG resilience, and operational productivity, alongside continued PSB consolidation “wherever the synergies are.” Currently, only SBI and HDFC rank among the top 100 global banks, which he said is not enough, drawing comparison to lenders in China and the US.
“Access to capital from all sources needs to be looked at… we need globally competitive large banks,” he said.
The final session before lunch titled Global Capital Allocations for the Bright Spot on the Planet focused on India’s growing attractiveness for global and domestic capital, and the structural shifts needed to sustain that momentum. Aparna Thyagarajan, Chief General Manager, SEBI, highlighted the role of Alternative Investment Funds (AIFs) in financing projects underserved by traditional avenues, such as infrastructure, startups, and long-term debt.
“I think AIFs play significant role in fostering innovation in ensuring that startups get that capital which is much required at the early stage of their life cycle and how we can channel both domestic institutional capital and foreign capital from investors who can take these risks (of investing in startups) and move them towards a product which is again well suited in terms of the risk appetite,” she said.
Soumya Rajan, Founder and CEO, Waterfield Advisors, said AIFs have seen a 5x growth in five years, reaching $130 billion in assets. With India’s ultra-HNI base growing rapidly, she sees private credit rising from 2–5 per cent to nearly 20 per cent of portfolios in three years. Rajan also noted the need for inclusive growth. “If we want to power ahead towards being that $5 trillion, then we have to make sure it's also inclusive.” Moreover, with 30 per cent of wealth expected to be owned by women by 2030, she believes strategic philanthropy in health, education, skilling, and climate will be driven in part by women-led wealth.
V. Laxmikanth, Managing Partner, Pavestone Capital, emphasised that India must build global brand recall in sectors like space tech and biosciences to compete in deep tech. “Building some investment thesis and brand around space tech and bioscience is going to be important,” he said.
Lastly, Nilesh Shah, MD & CEO, Kotak AMC, called for nurturing Indian talent and a stronger rule of law. “If our talent keeps on going abroad, they will benefit other countries, not India,” he warned.
The post-lunch discussion began with a fireside chat on Growth Investing: A Bridge Between Equity Markets and Mutual Funds, with Prateek Agrawal, MD & CEO of Motilal Oswal AMC, who underscored mutual funds as tax-efficient investment vehicles that deliver competitive returns. “Our portfolios are positioned super sharply for spaces which we believe will grow strongly for several years,” he said, adding that mutual funds are the most tax-efficient vehicles in India.
He also noted the value of early-stage investments: entering unlisted companies a year or two before IPOs can offer superior outcomes, albeit with higher risk, due to better valuations and the premium on liquidity.
Building on Agrawal’s thoughts on the tax efficiency and superior outcome potential of sharply positioned mutual fund portfolios, Amisha Vora, Chairperson and MD, PL Capital Group, in the next fireside chat on Growth Strategies & Investment Pathways: The Changing Landscape, highlighted the long-term strength of equity markets. “Amid all events that have happened in past, markets on a 25-year CAGR basis have still given us returns which no other instrument can do. So, I think it is very important that SIP as a class helps,” she said.
Vora also emphasised on passive investing, which mirrors indices, pointing out that “80 per cent of large-cap schemes underperform the benchmark.” However, she noted an evolution in active fund strategies, where managers now take bolder calls away from benchmarks to generate alpha, even at the cost of higher volatility, highlighting a shift in growth investing dynamics.
The next fireside chat with Paytm’s Madhur Deora and Balancehero India’s Chief Risk Officer, Sayantan Ghosh focused on AI-powered finance. The discussion explored how AI is redefining efficiency, risk, and customer engagement. Deora cautioned against fearing AI, saying, “If you are going to fear AI, you're going to be obsolete. If you're going to lean in, then you are going to be AI-ready.” He noted that while it’s still early to predict what AI will disrupt or enable, it is clear that it “dramatically increases the speed of change” and accelerates everything we expect of the future.
He emphasised that intuitive interfaces now allow professionals to fully leverage AI. Ghosh, on the other hand, added that AI’s impact must be evaluated through specific use cases, stressing the need for “contextualised, function-specific” deployment, such as improving customer query resolution.
“AI use case has to be specific. For example, am I able to solve more customer queries with AI than I was able to do before? AI use has to be a very contextualised and function-specific,” he noted.
Building on above discussion around AI integration in finance, the next panel delved into how India’s banking and financial sector is navigating digital transformation, both in terms of infrastructure and mindset.
Sivaram Kowta, President of Digital Banking at Zeta India, said that “digital as a channel” has become widely accepted. Many banks are replacing physical branches with digital touchpoints to source and service customers more efficiently. However, he pointed out that “digital as a mindset” still has a long way to go. Despite conversations around AI and alternate data, underwriting remains largely dependent on traditional metrics like CIBIL scores and customer history.
“If a new-to-credit, new-to-bank customer shows up, the probability that they would get the right amount of credit is probably very low in single digits,” he noted. Even though innovations like video KYC exist, its success rate still hovers around 50–60%, and scepticism persists inside banks. “Digital as a business requires us to change our mindset completely,” Kowta stressed.
Richa Roy, Partner at Cyril Amarchand Mangaldas, highlighted that India’s digital economy currently accounts for 11% of GDP, with ambitions to scale it to 20% by 2030. She said this growth will be largely “powered by digital banking,” but cautioned about the rising risks, including algorithmic bias, explainability, and fraud.
"Sam Alman recently said that banks are still using voice authentication as the sole means of authentication and AI has completely upended that because it can replicate voice authentication very well. So that's throwing a challenge for banks as well as regulators,” said Roy.
Manish Gupta, Head of Global Enterprise Sales at AdaniConneX, emphasised the importance of edge computing infrastructure in enabling real-time AI analytics across geographies. “You have to be closer to the consumer” in tier 2 and 3 cities, he said, adding that proximity is essential for effective and secure AI deployment.
“It's not only about generation of data, it's about analytics also to be closer to the consumer for which the edge network and the edge infrastructure in terms of hosting AI tools becomes very imperative,” said Gupta.
The panel discussion was followed by three sessions -- a fireside chat with Sohini Rajola, Executive Director – Growth, NPCI on future-ready innovations; a panel discussion on cyber security, and a concluding fireside chat on the way forward for the insurance sector in a polycrisis world with Satyanandan Atyam, Chief Risk Officer, TATA AIG General Insurance.
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