Indian banks have, on the whole, suffered from liquidity constraints. These include: high capital requirements, and hence, mismatch in short term funding vis-à-vis long-term lending. Even during periods of economic slack, such mismatches could pose difficulties for the fund-based needs of large funding requirements from corporate clients.
Low-cost access to funds remains a challenge in this area.
Opportunities in Corporate Banking
1. Digital Transformation and Fintech Partnerships Fintech has further allowed innovation and digital transformation in corporate banking. It is the collaboration of Fintech companies with the banks that design digital methods of payment, automate lending and increase data analytics. Some of the innovations that lead to digital transformation are block chain, AI, and machine learning, which allow for the efficient management of risks and speed up transactions, creating quality customer experience. In fact, digital banking is no longer a preference but must for corporates. Thus, the best-placed in this larger share of captures would be the better-placed banks who apply such technologies.