No digital divide

Note ban, a big change

Demonetization was the biggest disruption in the banking sector that led to digital transactions hitting a peak of Rs 19 lakh crore in March 2017, then it tapered down to Rs 16 lakh crore in May. Just before the note ban, the digital transactions were Rs 11 lakh crore. If internet connectivity improves and the smart cities provide the necessary wi-fi coverage then it could propel digital payments

Boost to transparency

The goods and services tax will increase cost for banks. High levels of compliance will make their business expensive; they may pass on the cost to the customer. The silver lining, however, is that a lot of payments from the unorganised sector to the organised sector would improve transparency, widen tax base and may be, in the long run, lower taxes

War on bad loans

The NPA Ordinance was a big upheaval for the sector. The government for the first time gave Reserve Bank of India more teeth to resolve the bad debt problem. RBI and banks are now trying to resolve about Rs 2 lakh crore of debt which constitutes a quarter of the total bad debt with banks. Insolvency and Bankruptcy Code 2016 may change the way businesses are run. Be accountable or the company will be stripped off its promoters.