by Nimesh Karwanyun, Head – Global Transaction Banking, India, BNP Paribas
The degree of economic volatility in India is less than in many other markets in the world today, in part thanks to the support of the huge domestic economy, with GDP growth predicted to be at around 8%. Within this current environment in India, what are the cash management challenges and opportunities for corporates?
Historically, if you think of cash management in India, most people will immediately think of paper-based instruments and processes. While this perception is based in fact, things are changing. Between March 2009 and March 2011, there has actually been a 19% drop in the use of paper-based instruments for cash management in India. Approximately 40% of total settlement in the country is done electronically. And while 60% is still paper-based, this number is made up of a huge volume of cheques.
A lot of the momentum behind the move to automation is coming from large corporates, who are trying to move to electronic settlement for their payments and collections. As a response to this need, banks such as BNP Paribas India are also pushing in this direction, investing much more in solutions and technology required for electronic settlement, while at the same time continuing to provide solutions for paper-based cash management as well.