Wednesday, March 22, 2023

SVB: No major impact seen from SVB crisis: CII chief – Usky News



New Delhi: CII President Sanjiv Bajaj, who is also the CMD of Bajaj Finserv, is of the view that svb The crisis will have a limited impact on India and suggests that the time has come for the RBI to chart its own interest rate trajectory regardless of other central banks. Excerpts:
How do you see the SVB issue affecting the Indian financial and startup sectors?
The US government has acted quickly to prevent any contagion effects while protecting all depositors, while also ensuring that taxpayer money is not used for this. This itself will give confidence to the market. In the near term, I believe that action has been taken and now suitable buyers will come on board. It also brings to the fore the question that excessive reliance on any single entity is not good in the long run and there is a need to build in some kind of resilience in any system so that we can avoid such shocks in future. As far as India is concerned, our startup ecosystem, some of them have deposits which are now safe. I don’t see any major effect.
Will there be domestic demand from the industry now? Which financial institutions led by Koli will fund the sector?
There is clearly an opportunity to do this and there are already many lenders in the private sector. Startups will continue to grow given the scale. It needs discussion to say what an efficient institutional mechanism you have created. For a very long time, we will need large amounts of foreign capital. So, how do you provide them a truly viable long term path to earn reasonable profits? In a developing country like India, we also need to channelize our household savings into productive long term objectives because if it goes only into gold and real estate, it tends to stall. If that money goes into safe financial products for a long period, it has a multiplier effect on the economy and the two biggest sectors are pension and insurance, which attract long-term money and can make long-term investments.
what is the opinion on angel tax issue?
The government has been very active in promoting the twin agenda of ease of doing business and encouraging foreign investment. We urge the government to reconsider the amendment to introduce angel tax on consideration received from non-residents in excess of the face value of shares as proposed in this year’s budget. This will encourage continuation of foreign inflows for startups.
now we have svb blow and Adani Issue. Do these shocks pose a risk economic recovery?
The Indian economy is large and diversified and will not be affected by any local challenges that may arise. It is also true that one cannot foresee and act upon every possible challenge that may arise. But the action of SVB either on behalf of the government or here, with the Adani group, their own action has shown that when a challenge comes, how quickly you address the challenge.
Is there a slowdown in demand?
Clearly growth is uneven. , , Rural development is slower than urban development. , , Our inflation is coming under good control. , , You don’t need to follow a general coordinated action.

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