Disruptive_Ideas_in_Banking_And_Fintech_Building_The_Worlds_Largest_Banks_in_India_A_Strategic_perspective_Abridged_Presentation.pdf

Ashish Puntambekar
Strategic Planner & Digital Innovator
Updated version : 9th Dec 2022
Rev 02
First prepared in Dec 2020 for the
Indo American Chamber of Commerce
Disruptive Ideas in Banking
The Digital Hyperdrive Strategy
Strategic Perspectives on creating the Worlds
Largest Banks in India
Indo - American Chamber of Commerce
Om Sangrahaya Namaha
Om Vishwaksenaya Namaha

Ashish Puntambekar, Strategic Planner
Ashish Puntambekar
Former Vice President of Strategic Planning
Reliance Industries Ltd.
https://www.linkedin.com/in/ashishpuntambekar/
Email : akpuntambekar108@gmail.com
Ph : 9867612368
Disruptive Ideas In Banking
The Digital Hyperdrive Strategy
Strategic Perspectives on creating the Worlds Largest Banks in
India
2

Protected by Indian Copyright
The ideas contained in this presentation are of a Strategic Nature and concern a
possible future direction of the Indian Financial sector.
Presentation is being released to a Linkedin audience of 30,000 leaders on 12th Dec
2022.
Please be sure to mention your source while using the ideas contained herein as
this is original work, not so far published by anyone else in the Industry and
specifically concerning India’s financial sector.
3

Fundamental Insight
The author’s review of strategies adopted by Global Banks over the last 162 years suggests
that as a Country’s GDP expands by 2X - 3X , its Banks get a unique opportunity to grow
exponentially into the worlds largest financial institutions.
This has been demonstrated repeatedly, starting with the US, Europe, Japan and most recently
in China, where some smart banks, totally aligned themselves with their Govt’s GDP multiplication
targets to achieve massive expansion of their balance sheets within a relatively short period.
4

In May 2014, when the NDA Govt. assumed office, the Indian Financial Sector was in a shambles with over INR 14 Lakh crores in bad loans. Some
estimated the bad loans number to be as large as INR 19 Lakh crores.
The IL & FS crisis of 2018, created additional challenges that affected the NBFC sector which in turn resulted in serious liquidity problems in
Indian financial markets.
By Feb 2020, things had become better but then Covid 19 struck and the bad loan problem again became an issue. Bad loans as of March 2021 were
estimated at INR 8.35 Lakh crores.
By March 2021, India’s banks had written off INR 10.85 Lakh crores of bad loans. The loan recovery rate was at an abysmal 13 % and many banks
have still not set their houses in order.
Still, in December 2022, Banks in India are in much better shape than they have been in decades.
This presentation focuses on painting a future vision for the Indian Banking and Financial sector. To imagine this future, the author has studied the
Growth strategies deployed by Banks around the world for the last 162 years.
Therefore the strategies that are being proposed here, to achieve Exponential Growth of India’s Banking industry have worked repeatedly the US,
Europe, Japan and most recently in China.
As the presentation clearly demonstrates, Fintech will help to greatly reduce costs and massively increase coverage, but since Fintech also leads to
margin compression, due to increased competition, it may not increase the size of bank balance sheets very much. Instead, India’s largest Banks by
2032 will be those which align themselves with the NDA Govt.’s National GDP multiplication plan (US $ 7.5 Trillion economy by 2032). The
presentation also shares the precise innovation strategies that will help India’s banks to grow through Innovation Labs, strategic digital
partnerships (the MIT model), Lighthouse projects plus a Financing strategy & a Risk management plan all of which are totally aligned with the
Governments GDP Multiplication plan. We shall call this combination of aligned strategies to increase bank balance sheets as ”The Digital Hyperdrive “.
Executive Summary
5

Presentation in Six Parts
The complete presentation consists of six parts. This abridged version, for a general
audience, consists of parts I, II, III & IV.
Parts V (Lighthouse projects) and Part VI (Strategic Financing & Risk Management
Plan), that constitute the digital hyperdrive strategy, will be shared later with select
audiences which will be executing the strategy.
6

New Strategic Construct for India’s Banking Industry
 Learning exponential growth strategies which have worked over the last
162 years, from US, European, Japanese & Chinese banks
 Maximizing the use of Fintech to reduce costs for banks and massively
increase coverage, while understanding Fintech’s margin compression
effects that may limit its ability to expand bank balance sheets
7

PART I
Digital Fintech to improve financial inclusion
8

Financial Inclusion Under Digital India (2014 – 2022)
SL. No. Parameter 2014 July 2022 Remarks
Huge Progress made in 5 years
1. Un-banked population 567 million 110 million 460 Million new Bank accounts created and
massive resources collected under PMJDY
scheme
2. Additional resources in formal
banking system in PMJDY accounts
Rs. 1.75 Lakh Crores
3. Ministry schemes under direct debit
transfer
63 ministries
488 schemes
Large number of Govt. schemes have gone
completely online
4. Mobile wallet transactions
( one type of digital transaction )
11.96 million 4.0 Billion * * FY 2021. A 33344 % increase in mobile
wallet transactions
Problems yet to be solved
1. Enrolling 110 Million additional people under PMJDY
2. Large number of dormant accounts ( 86.9 Million ) under PMJDY
3. Setting up of new accounts needs to be made easier to reach the really marginalized groups ( More innovation required )
4. Lack of skills amongst stakeholders to use digital services
5. Very high preference for using cash in transactions
6. Unaffordability of digital equipment ( mobile telephones ) , Less utilization among women etc
Sources : https://bfsi.economictimes.indiatimes.com/news/policy/financial-inclusion-a-key-driver-of-economic-growth-rbi/73291980
https://www.epw.in/engage/article/financial-inclusion-and-digital-india-critical
Huge progress has been made , yet challenges remain https://timesofindia.indiatimes.com/business/india-business/psu-banks-to-open-about-300-branches-in-unbanked-areas-by-dec-2022/articleshow/93983803.cms 9

Nature of Technology led Disruption in Banking Services
Clayton Christensen Framework
Time
Time
Performance
Different
Measure
of
Performance
Performance that
the customer
Can utilize
Low End Disruption
in the same market
New Market Disruption
 Traditional Banks are under Attack from various
Fintech business models :
Startups Services
Paytm & Paytm
Money
Digital wallet, Payments bank, Investments,
Trading platform and Ecommerce
Phone Pe UPI based payments : billing, recharges,
ecommerce
MobiKwik Digital wallets, Wealth management &
Insurance
ETMoney Zero commission, direct Mutual funds &
instant loans
PolicyBazaar Insurance aggregator, growing 100 % YOY,
100 million customers
LendingKart NBFC, Focused on MSME landing. Uses data
analytics to disburse loans faster than banks
LoanTap Instant flexible loans to underserved
millennials
Entrants like ETMoney have grown at over 48 % while the Mutual Fund industry grew at 7 % between July 2021
and July 2022. It currently has over 10 million users in 1400+ cities and has an AUM of over INR 30,000 crores. 10

Accelerating Financial Inclusion – Basic Design Concepts
Web 2.0 / Enterprise 2.0
Within India’s Banks
Mass Customization
Reach
Vs.
Customer Experience
Digitization of Products
& Services
Data Analytics, Pattern
Recognition,
AI & Big data
Business Model Innovation
Process Innovation
IT innovations Business innovations
Accelerated financial inclusion
possibilities through better
customer experience
Product / Service
Innovation
2 1
Innovative Digital Marketing
11

Setting up Fintech Design Groups within Banks : Designing at Two levels (Digital Technology Stack
& Creative Banking Products)
Digital Finance
Product Strategy
Design Research
Platform &
Product
Definition
Iteration Execution
 Business Objectives
 Business Strategy
 Business Model &
Combinations
Digital Platform & Product Management Platform &
Product Development
DESIGN RESEARCH INTERACTION DESIGN VISUAL DESIGN
 Design sessions :
Technology stack,
Functional Product,
Sales & Marketing
teams
 Market Research
- Competitive Analysis
- Product Market Fit
 User Research
- User interviews to
determine Pain points,
Expectations &
Business Opportunities
 Stakeholder interviews
- Enterprise users
operational needs
Turning business
insights into
Platform & Product
requirements
 Open source Stack
 User Personas
& Archetypes
 Feature definition
 User flows : Steps
users will take to
accomplish tasks
 Optimizing the
Technology
stack to support
various business
models
 Creation of
preliminary
mockups and
wireframes
 Prototyping
 Testing
After framework for
the Platform &
the Digital Product
has been established
and requirements
Finalized :
 System design
 Visual design
 Production
Once Digital Technology Stacks & Banking products are put into the Market, they can be improved upon
by returning to the loop
12

Using Design and Innovation to Accelerate Financial Inclusion
Simplify, Simplify, Simplify
13

Mapping financial inclusion objectives - to Design tools
Financial Inclusion objectives to be achieved
1. Adding an additional 190 million new customers
2. Energizing 76 million dormant accounts
3. Reaching the very poor & marginalized groups
4. Skilling consumers to use digital services
5. Reducing preference for cash
6. Increasing usage among women
7. Reducing the cost of digital equipment & mobile phones
8. Providing more secure financial systems
Design tools used
1. Business model design
2. Designing innovative digital products
and processes (Banking, Insurance etc)
3. Designing innovative digital marketing
campaigns
4. Innovative skilling programs
14

Increasing Financial Inclusion – Design Lab Approach to Simplify Adoption & Use
 Design of innovative digital products in
banking, Insurance etc.
 Process innovation
 Design of innovative business models
to improve inclusion
 Innovative messaging using various channels
to influence social norms & behaviours
 Incentivizing stakeholders, optimizing untapped
and undertapped opportunities
 Continuous consumer training
Inter-disciplinary design sessions can fast track financial inclusion through rapid prototyping and testing of
innovative solutions 15

Pros and Cons of a Fintech Strategy :
Pros and Cons of a Fintech Strategy
A Fintech Strategy to expand financial Inclusion, therefore, by itself, cannot create chart breaking, balance sheet
growth, unless banks expand internationally on a large scale. So, what else can India’s banks do ?
Pros
 Reduces operating costs and increases efficiencies on a large scale
 Allows a Bank to reach and serve millions of new customers and achieve the very
important goal of Financial inclusion, across geographies
 Allows a wide array of innovative business models
Cons
 Increased competition results in wafer thin Margins for all players
 Starts a race to the bottom on Margins
 While financial inclusion is excellent for the country and for removing
poverty, it does not move the needle on increasing the size of Bank
balance sheets because the customers being added have little disposable income
16

PART II
Digital Innovation Across Industry Value Chains
17

 Help the Bank set up a Creative Design Group
within the Bank to improve Asset Quality
 Competencies to be developed within client
/ Bank to help client businesses :
 Business model design
 Incisive Analytics capability
 Negotiation design capability
 Creative contract re-design
 Creative re-imagination of borrower businesses
 Creation of Strategic Design group within the
Bank :
 This Specialist group of strategic planners & Digital strategists
will brainstorm with Key people within Borrower organizations
 Help re-imagine and re-wire borrower’s business across industry
value chains and help restore them to financial health
Innovation Lab Approach (Example 1) : Helping Banks improve Asset quality / Recover value from NPAs
Strategic design driven approach will help reduce Bank NPA’s by Re-imagining Borrowers Businesses.
These design sessions can also help maintain Asset quality at the bank 18

Innovation Lab Approach (Example 2) : Deutsche Bank In-house Consulting Group & Innovation Labs
In-house Consulting Network
Sources : https://inhouse-consulting.de/en/deutsche-bank-management-consulting/
https://www.gfmag.com/magazine/june-2020/best-innovation-labs-2020
https://www.fintechmagazine.com/venture-capital/top-10-fintech-innovation-labs-or-3-deutsche-bank-innovation-labs
 Deutsche has a management consulting team which
competes directly with top external consultancies to advise
the senior Management of the Bank.
 Their Multi – industry expertise, also enables them to create
wealth for the Bank’s corporate clients with business models
that operate across industry value chains.
 The innovation Lab on the other hand is a problem solving
group of Deutsche’s most creative people.
 The bank has five innovation labs in the US, Europe and Asia,
that work with startups to identify, evaluate and enable the
adoption of emerging technologies in support of Deutsche
Bank’s overall digital strategy.
Deutsche Bank Innovation Lab
Deutsche’s inhouse consulting team advises Corporate
clients such as Nestle, Thyssenkrupp and Merck,
thereby bringing in additional business for their
Corporate banking group
19

Innovation Lab Approach (Example 3) : Goldman Sachs – Innovation Lab (Brain Trust)
A Brain Trust Lookalike, will power the Digital Hyperdrive described later in this presentation
20
 Goldman experienced a major shock when trading revenue
fell by 32%, or $18 billion in 2016-17.
 To set things right, Goldman set up an Innovation Lab,
(unofficially called the Brain Trust) to focus on providing advice
and consulting to client companies.
 The Innovation Lab makes use of their most unique asset,
highly-experienced and skilled personnel who are leaders in
global finance in almost every sector, including Climate
finance. The lab uses Digital strategies in the sense that
the business models they deploy operate across industry
value chains, to create unique Net Zero projects (for example).
 The Brain Trust operates as a secretive group within Goldman
Sachs, to power the company’s turnaround.
 The Lab works with clients like SoftBank Group and Berkshire
Hathaway among others to provide deal making and
consulting services.
Source : https://www.boldbusiness.com/society/goldman-sachs-innovation-lab/
Goldman expects its innovation
Lab to generate US $ 5 billion in
revenues annually through deal
making and consulting services,
that deploy digital concepts.

PART III
Proven Growth Strategies (US, Europe, Japan & China)
Learnings from the last 162 years of global banking history.
21

How The Worlds Largest Banks Were Built
1860 – the present
US, Europe, Japan & China
22

Rank Company Country Sales Profits Assets
Market
Capitalization
# 1 Berkshire Hathaway United States 276.1 89.8 958.8 741.5
# 2 ICBC Bank China 208.1 54.0 5518.5 214.4
# 3 Saudi Aramco Saudi Arabia 400.4 105.3 576.04 2292.1
# 4 JPMorgan Chase United States 124.5 42.12 3954.7 374.45
# 5 China Construction Bank China 202.07 46.89 4746.9 181.32
# 6 Amazon United States 469.8 33.36 420.55 1468.4
# 7 Apple United States 378.7 100.56 381.19 2640.32
# 8 Agricultural Bank of China China 181.42 37.38 4561.05 133.38
# 9 Bank of America United States 96.83 31 3238.22 303.1
# 10 Toyota Motor Japan 281.75 28.15 552.46 237.73
These were the Worlds 10 Largest Corporations in 2022
FIVE of the top TEN largest Global Corporations are Banks. THREE of them are Chinese Banks
Source : https://www.forbes.com/lists/global2000/?sh=419a06585ac0
All numbers in US $ Billion
23

US, Europe, Japan & China ( 1860 – The Present ) - For massive Growth, Banks Aligned with Govt. policy
Clayton Christensen Framework
Time
Time
Performance
Different
Measure
of
Performance
Performance that
the customer
Can utilize
Low End Disruption
in the same market
New Market Disruption
Government / Public Utility Banking Reference Frame
Consumer Banking Reference Frame
The following Banks saw massive growth by aligning with
their National Government Policies :
 JP Morgan
 Citibank
 Bank of America
 Deutsche bank
 Rotschild
 Barclays
 Mitsubishi UFJ Financial Group
 Sumitomo Mitsui Financial Group

 Mizuho Financial Group
 China Development Bank
 Industrial & Commercial bank of China
 Peoples Bank of China
 Agriculture bank of China
 Shanghai Pudong Development Bank
Banks saw massive growth by shifting their strategies from Consumer banking to Govt. financing 24

A Picture is worth a Thousand Words
Lets see how banks have grown through special initiatives
that earned them Fee based revenues
25

Concept 1
The Logic of Alignment with National Growth Strategy
26

Concept 1 … Participation in Govt. Projects to earn fee based revenues
Creating Entrepreneurial Banks With Global Aspirations … and Aligned to National Growth
Participating in Large Iconic Projects can be Very Profitable for banks
Transatlantic Cable ( 1866 )
Lead Financier : Citi Bank of New York
Panama Canal ( 1904 )
Lead Financier : J P Morgan
Northern Pacific Railroad ( 1866 )
JP Morgan $ 40 Million Bond Issue
27

Participating in Large Iconic Govt. Projects can be Very Profitable for banks
Financing The Marshall Plan
For Reconstruction of
European Cities ( 1948 )
Citibank …
UAE Banks
Financing Dubai Projects
The Euro Tunnel … between
the UK and France ( 1986 )
UK Banks : Natwest, Midland Bank
French Banks: BNP, Credit Lyonnaise,
Bank indo suez
28

Participating in Large Iconic Govt. Projects can be Very Profitable for banks
Three Gorges Dam, China ( 2006 )
China Development Bank …
China … One Belt One Road
China Development Bank, Industrial
& Commercial bank of China
Shanghai Pudong Intl Airport
China Nuclear Power Plants
China’s Large Wind Power Programme
Peoples Bank of China, Agriculture bank
of China, Shanghai Pudong Development
Bank
29

How Mega Banks have been Created in Waves : 1860 to The Present
Period Banks in Countries /
Regions
Banks Examples of Initiatives that resulted in
Massive growth (including innovation in
Banking technology)
1860 – 1929 United States, Europe This period saw the rapid rise of American
and European Banks: Citibank, JP Morgan,
Bank of America, Wells Fargo, Goldman
Sachs, Rothschild, Deutsche Bank, Crédit
Agricole, Barclays etc
Citibank and JP Morgan financed the
Transatlantic cable, US Railroads, The Panama
Canal etc. Rothschilds financed the battle of
Waterloo
1945 – 1960 United States, Europe Citibank, JP Morgan, Bank of America,
Goldman Sachs, Deutsche Bank, Crédit
Agricole, Barclays etc
US Banks like Citi and JP Morgan financed the
Marshall Plan for the re-construction of Europe.
Infrastructure construction in the US & Europe
and the introduction of Technology and new
banking products
1961 – 1992 United States, Europe and
Japan
This period saw the rapid rise of Japanese
Banks due to the Keiretsu system : Dai-Ichi
Kangyo Bank, Sumitomo Bank, Fuji Bank,
Mitsubishi Bank & Sanwa Bank
The Japanese Ministry of International Trade
and Industry (MITI) directed Japan’s rise. The
Keiretsu system brought together Industry, the
Japanese General Trading Companies and
Japanese Banks resulting in a few Japanese
banks becoming the largest in the world.
2000 – 2022 China China Development Bank, Industrial &
Commercial bank of China, Peoples Bank of
China, Agriculture bank of China, Shanghai
Pudong Development Bank
Massive Infrastructure Investment by the
Chinese Govt. has resulted in 3 Chinese
financial institutions being among the Top 10
global Corporations.
Sources : https://www.moneyunder30.com/the-history-of-americas-largest-banks
Megabanks have been created in Waves as Bank managements Aligned themselves to New opportunities
https://en.wikipedia.org/wiki/List_of_oldest_banks_in_continuous_operation https://www.nippon.com/en/in-depth/a04003/ https://www.latimes.com/archives/la-xpm-1989-06-15-fi-2564-story.html
30

Concept 2
Strategic Partnerships & Joint Ventures
31

Concept 2 … Strategic Partnerships & Joint Ventures
Creating Entrepreneurial Banks With Global Aspirations … Strategic partnerships
Strategic Partnerships & Joint Ventures have been critical :
1. Governments : at the National & State levels
2. Industry Partners : Developers, Industrial houses, Trading Companies
3. Other Banks and Global Financial Institutions
32

Concept 3
Betting on New Business Models & Futuristic Technologies
33

Founded 1812 … 200 years of innovation
Uniform Cargo Containers ( 1956 ) Passenger Jet ( 1958 )
Concept 3 … Betting on New Business Models & Futuristic Technologies
Creating Entrepreneurial Banks … Traditional Venture Funding Model
Foreign Exchange Network ( 1897 )
34

The ATM ( 1977 ) The Space Shuttle ( 1995 )
Concept 3 … Betting on New Business Models & Future Technologies
35

Smart Banking ( 2010 ) Google Wallet ( 2011 )
Concept 3 … Betting on New Business Models & Future Technologies
Blockchain & NFTs
within the Metaverse
(2021-22)
36

Understanding the Opportunity for India’s Banks
37

Rank Company Country Sales Net Profit Total Assets
Market
Capitalization
# 1 Reliance Industries India 84.74 8.22 181.78 214.11
# 2 Tata Consulting Services India 23.25 4.66 17.09 146.15
# 3 HDFC Bank India 16.48 4.62 218.28 110.31
# 4 Hindustan Unilever India 6.36 1.07 8.55 77.58
# 5 ICICI Bank India 11.57 3.21 212.59 78.67
# 6 Infosys India 14.75 2.68 14.16 80.10
# 7 State Bank of India India 35.17 4.51 650.27 66.74
# 8 Bharti Airtel India 14.14 1.08 43.81 58.50
# 9 Bajaj Finance India 3.83 0.85 25.77 47.86
# 10 HDFC India 16.48 2.91 117.20 59.13
Source : https://economictimes.indiatimes.com/markets/stocks/news/seven-of-top-10-firms-lose-rs-1-16-lakh-cr-in-mcap-reliance-worst-hit/articleshow/94595733.cms
Updated March 2022 values from www.Screener.in , US $ / INR value as of 10th Dec ‘ 2022 (82.44 INR / USD)
All numbers in US $ Billion
These are the 10 Largest Corporations in India in 2022
There are FIVE Financial Institutions in the Top 10 Indian Companies. But their sizes are relatively Small
compared to Global Peers. Our Banks are also relatively small.
38

Govt. of India growth targets for the Indian Economy :
 US $ 5.0 Trillion by 2025
 US $ 7.5 Trillion by 2032
India’s Banks need to see the huge opportunity in Aligning with the Government’s GDP Expansion plan
39

Catalysing demand - by looking beyond the Bad Loans problem & the Covid 19 Crisis
 To stimulate demand, Govt. of India’s has announced an ambitious
Infrastructure plan :
 Rs. 100 Lakh crore in a National Infrastructure Pipeline
 Rs. 25 Lakh crore investment in Agriculture
 Proposed Renewable Energy Expansion :
 450 GW by 2030 ( US $ 221 Billion )
 Proposed Investment of US $ 300 Billion in Oil & Gas by 2030 in :
 Oil Refineries
 LNG Terminals
 Oil & Gas Pipelines
 Petrochemical Complexes
India’s Banks need to see the huge US $ 1.5 Trillion opportunity in Aligning with the Government’s
Investment plan
US $ 1516 Billion
40

PART IV
Net Zero Portfolio Imperative for India’s Financial Institutions and Banks
Setting up a domestic Net Zero Banking Alliance to achieve National de-carbonization targets by 2070
41

US SEC Move on Carbon Emissions : A Global Re - pricing of Carbon may soon become a reality
Source : Tony Seba, Rethink X
 For Banks, it is easier to plan abatement pathways for GHG protocol Scope 1 and
Scope 2 emissions. (GHG = Green House Gas)
 Scope 3 emissions result from a bank’s loans and investments across sectors.
These however present wicked problems for Banks.
 US SEC Federal Rule : In early 2022, The U.S. Securities and Exchange Commission
proposed a new federal rule requiring all publicly traded companies, including
Banks to disclose climate risks and carbon emissions resulting from their
operations.
 This regulation would directly link financing to emissions in a way that’s never
been done before. The implications of this move by the US SEC may be global :
 International Banks are likely to work towards reducing their carbon exposure,
which means new products and new terms to finance low carbon projects
around the world.
 From now on, an asset’s carbon profile will become as relevant as its credit risk
to guide bank terms.
 This may result in a Re-pricing of Interest rates for Dirty Vs Clean Industries,
with Brown premiums and Green discounts. This will amount to pricing Carbon
in a new way.
Credit May Get Cheaper for the following
Industries on a Global basis
A Global Re - pricing of Credit could have huge implications for Banks in India
as the Indian Economy expands to US $ 5 Trillion GDP.
42

Why is it Imperative for India’s Banks to commit to a Net Zero Portfolio Target ?
Prime Minister Modi has committed India to the following five climate targets
at the COP 26 summit in Glasgow, in November 2021 :
 India to get 50% of its energy from renewable resources by 2030
 Reduce total projected carbon emissions by one billion tonnes by 2030
 Achieve 500 gigawatts (GW) of non-fossil electricity capacity by 2030
 Reduce emissions intensity of GDP by 45% by 2030
 Achieve a net zero emissions target for the entire economy - by 2070
India’s Banks have a critical strategic role to play by helping to Raise and
channelize $1 Trillion (INR 80 Lakh crores) in climate Finance from Global
and domestic markets into projects.
These targets cannot be achieved without India’s Banks doing the heavy
Lifting by deploying Financial innovation and other means. 43

India’s Banks & Climate Change – Current Position
Source : https://bfsi.economictimes.indiatimes.com/news/banking/indias-big-banks-score-poorly-on-climate-challenge/90509360
According to the Think Tank “ Climate Risk Horizons “, India’s Banks have performed poorly on Climate Change :
1. Banks in general, are totally unprepared for the financial impacts of Climate change
2. Most of India’s banks have not even begun factoring in Climate change into their Business Strategies
3. None of the 34 banks surveyed, have a long term Net Zero target year, with an implementation plan
covering Scope 1, Scope 2 and most importantly Scope 3 emissions.
4. Only 2 banks (Yes Bank and HDFC Bank) have set definite targets for Scope 1 and Scope 2 emissions, while State Bank
of India has only a long term target for a carbon neutral year.
5. Out of the 34 banks surveyed in India, 26 do not disclose even the most basic environmental indicators
6. As far as their lending goes, most banks have no clear plan to finance projects that mitigate Climate Change impacts
It needs to be understood that without the Participation of Financial Institutions, No National Net Zero target can be
achieved. India’s Banks therefore need to act fast, given that there is expected to be a 2.8 % annual hit on Indian GDP
by 2050 due to Climate change, according to the World Bank. 44

The Net Zero Banking Alliance – A United Nations Initiative to Align Banks to De – carbonization goals
The Net Zero Banking Alliance (NZBA) is a Network of
Global Banks set up to Combat Climate Change :
 The world’s 60 biggest banks — 13 of which are in
the U.S. — have provided $ 4.6 trillion in financing
to fossil fuel companies since the Paris climate deal
in 2015.
 NBZA was set up based on the realization that the
Banking Industry is key to the Energy Transition and
without the banks, Climate change mitigation
& decarbonization cannot happen.
 The NZBA currently consists of 108 Banks with
US $ 68 Trillion in assets under management.
 No Indian Bank as yet, is a member of the NBZA.
Rank Bank Country
Sustainable
revenue
ratio
Total sustainable
revenue ( $million)
1 Vancity Credit Union Canada 34.13% $ 171,312
2 SpareBank 1
Ostlandet
Norway 23.04% $ 104,496
3 Amalgamated Bank USA 19.47% $ 39,462
4 Intesa Sanpaolo Italy 6.72% $ 3,677,508
5 Commerzbank Germany 6.54% $ 1,001,049
6 JB Financial Group South Korea 5.21% $ 132,942
7 Investec Group South Africa 5.04% $ 157,082
8 DBS Bank Singapore 3.77% $ 694,701
9 BMO Financial Group Canada 3.59% $ 877,683
10 Citibank USA 3.03% $ 2,177,718
Source: Corporate Knights/The Banker
Top 10 banks by Revenues earned from sustainable lending and investments
Banks and Financial Institutions in India need to
Learn from their Counterparts in other countries
that have benefited from a Net Zero Strategy.
(See table alongside) 45

How Can Banks build a Net Zero Portfolio of Assets to deliver on India’s COP 26 Commitments ?
Banks will need to change their business
models and priorities by :
 Lending to climate change mitigation
projects that can achieve the largest
emission reductions.
 Focus on projects that can increase
Financial inclusion and quality of life
without harming the environment.
Prioritize lending to sectors that can
Maximixe Carbon reductions :
1. Energy 56.7 %
2. Transportation 16.2 %
3. Food 18.0 %
TOTAL 90.90 %
India’s Banks will need to build
teams that understand
climate change technologies
and advanced business models
that enable those technologies
at scale. 46

India’s Banks – A Possible “ Climate Change ” Agenda
India’s Financial institutions could adopt the following strategies to combat Climate Change :
1. Lend to de-carbonization projects / technology companies in the following
areas that represent 90 % of Carbon emissions :
1. Energy 56.7 %
2. Transportation 16.2 %
3. Food * 18.0 %
TOTAL 90.90 %
2. Set up specialist “climate project investment divisions” that :
 Lend capital to innovative Climate change mitigation projects
 Invest Venture capital in innovative de-carbonization
& Energy transition technologies & initiatives
Strategizing investments in climate change
mitigation initiatives
Energy, Transport and Food are key sectors for Banks to Focus on, for India to achieve Net Zero by 2070 or earlier.
* This applies more in the context
of western meat eating societies
but is still very relevant to India.
3. Lend to Lighthouse Sustainability Projects of Corporates, with proper
financial risk mitigation measures in place **.
** See Parts V & VI of the presentation on Banking to the Indo – American Chambers of Commerce, by the author.
Over US $ 500 Billion will be channeled
through India’s Banks into Energy,
Transportation and breakthrough food
technologies over the next 5 – 6 years.
47

Action items for India’s Financial Institutions & Banks
 Set up a domestic Net Zero Banking Alliance (NZBA-India) and
partner with foreign banks who have successfully built Large Net Zero
portfolios.
 Align the Banks strategy totally with National Growth goals and the
National Net Zero targets.
 Set up the following specialized teams within your financial institution :
 Climate Finance team
 Deep Cleantech team
 Business team – To design Industry 4.0 business models
 Sensitize borrowers & clients to ESG Frameworks and help them to
develop specialized skills (1) Design of ESG improvement projects
(2) ESG frameworks & compliance. This consulting service could
generate additional revenue for the bank and reduce NPAs.
Actively working to build Net Zero Portfolio’s will be profitable for India’s Financial institutions and help
them access Capital Internationally at lower interest rates (Green Discounts) as CO2 gets Re-priced.
48

PART V
Lighthouse Projects
To bring scale to India’s Banks and Expand their balance sheets
Digital Hyperdrive
Component 1
49

12 Slide Presentation on possible Lighthouse Projects to expand Bank Balance Sheets by 5X – 7X
will be shared with select audiences that will be executing the strategy.
Confidential
50
Application of the
Brain Trust concept
(see slide 20)

PART VI
Strategic Financing & Risk Management Plan to Support the Growth of India’s Banks
51
Digital Hyperdrive
Component 2

20 Slide Presentation on Financing Strategy & Risk Management to support the Growth of Indian Banking
will be shared with select audiences which will be executing the strategy.
Confidential
52
Application of the
Brain Trust concept
(see slide 20)

India’s Banks : Which of these are the “ Dark horses ” ?
Which of these Banks are thinking in terms of the opportunities that arise while expanding the
economy from US $ 3 Trillion currently to US $ 7.5 Trillion by 2032 ? 53

Climate Finance & Energy Sector Innovator
Ashish is the Financial designer & business concept specialist of Project 42 (a large environmental project, designed to solve the winter smog problem in north India due to open
field burning of rice paddy straw). He is also currently Head of Clean Energy, Green Finance & Digital Advisory at X36 Falcon, a strategic design company.
An expert in Energy markets and derivatives trading, he has deep insights relating to the design of financial products and business model innovation in the Energy & Clean Tech
Industry (Hydrogen and Electric Mobility) which have earned him a good following internationally. He is an expert invitee at the Asian Development Bank (ADB) where his work on
Urban Equity Withdrawal backed Green Bonds & other innovative financial products has been presented. He is also an invitee speaker on TEDx to talk about ideas that can triple
the size of the Indian economy by 2030.
Apart from Project 42, he has designed several Energy transition & Decarbonization projects across CO2 abatement (CO2-EOR), smart city – wind hybrids and smart city - green
hydrogen (GH2) hybrids.
Strategic National Projects
Ashish has conceptualized several strategic projects and has done the detailed business and financial planning for four projects which are either under execution or active
consideration by the Indian Government :
1. The National Infrastructure Pipeline (Now known as Gati Shakti)
2. The Defence Industrial Corridor (under Execution)
3. The East Coast Energy Corridor (under consideration)
4. The Vivekanand Secondary Education & Skills Development Megaproject (Proposed)
5. Digital Hyperdrive concept to vastly expand the size of Bank balance sheets to create Mega Financial institutions in India (Proposed)
GATI SHAKTI : Ashish conceptualized the Construct India Mission that received official sponsorship from the Ministry of Commerce in 2018. This was later named the National
Infrastructure pipeline. An innovative Financing plan to raise INR 87 Lakh crores (independent of Central or State budgets) for Gati Shakti projects has been presented to the
Ministry of Finance for consideration recently. This financing plan has the potential to create over 36 million new jobs in India by 2027.
Ashish Puntambekar has over 20 years of experience working with some of the finest talent globally in the Energy and Infrastructure sectors and specifically
in the areas of strategic planning, clean energy project design and climate finance where he is a specialist.
Before starting out as a private consultant advising foreign investment funds on portfolio strategies across Energy, Fintech and Digital technologies, he
served as Vice President of Strategic Planning & Quantitative Research for Six different businesses at Reliance Industries for over 6 years. He has been the convener of
Reliance’s International Business Advisory Board (IAB) with Harvard Economists, Former G - 7 Finance Ministers, Foreign Ambassadors and Defence Analysts as members.
Ashish Puntambekar
54

55
Govt. Letters
Construct India Mission
Now GATI SHAKTI
Defence Industrial Corridor
55

Thank You For Your Attention
Ashish Puntambekar
Flat 602, Tower 7
Sea Breeze CHS
Sector 16, Nerul ( West )
Navi Mumbai - 400706
Ph : 91- 9867612368
Email : akpuntambekar108@gmail.com
ashish@x36falcon.com
56

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