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‘Don’t seek a loan when you’re desperate’

Apeejay Nerul alumnus and Federal Bank Associate Chinmay Sinha says financial inclusion helps unearth the economic potential of a country



Chinmay works in the Operations Department of Federal Bank and primarily handles corporate loans and advances. The banking operations department is responsible for executing and settling transactions initiated by the front-end teams while ensuring adherence to risk and regulatory guidelines. In a candid interview, the 22-year-old, who did his B.Com (Banking & Insurance) from SIES College of Arts Science and Commerce, Mumbai, talks about the importance of extracurricular activities, benefits of financial inclusion, things to keep in mind before securing a personal loan, and more. Edited excerpts:

What are the key skills you acquired in school?

I was decent in studies, but I used to actively participate in co-curricular activities be it declamation contests, skit competitions, debates, inter house Cricket tournaments and other sports activities. I was in class 3 when I started expressing myself and have never looked back since. I believe that various activities conducted by Apeejay Nerul had a huge bearing on sharpening my soft skills such as communication, teamwork, adaptability, critical observation, problem solving, conflict resolution, leadership, etc. It’s one of the prime reasons that I bagged a good offer at campus placement. You enhance your employability when you are confident and know how to articulate your thoughts in a clear and understandable way. I advise every student to realise the importance of extracurricular activities in school life.

How did you get into banking?

After class 10, I had opted for Science with Economics and soon I fell in love with Economics. Hence, I decided to pursue B.Com (Banking & Insurance). If you identify your strengths early on it helps you in career planning. Also, it’s vital to keep on learning new skills and build your resume to advance your career. Never get complacent. Talking about myself, I recently cleared the JAIIB exam. For bankers and finance professionals to stay ahead of the curve, the Indian Institute of Banking and Finance (IIBF) conducts the JAIIB exam. JAIIB stands for Junior Associate of Indian Institute of Bankers. This exam is generally conducted twice a year in the months of May and November. Candidates clearing the JAIIB exam easily get a promotion along with a hike in their salary. I am also planning to pursue an MBA degree.

According to you, why is financial inclusion important?

Financial inclusion means that individuals and businesses, regardless of their personal net worth or company size, have access to useful and affordable financial products and services. Financial inclusion enables the underprivileged population to have the ability and tools to manage and save their money and empower them with the skills and knowledge to make the right financial decisions. For instance, Pradhan Mantri Jan-Dhan Yojana (PMJDY) is National Mission for Financial Inclusion to ensure access to financial services, namely, basic savings & deposit accounts, remittance, credit, insurance, pension in an affordable manner. Overall, Financial inclusion helps unearth the economic potential of a country.

How do you see the future of banking in India?

The government of India is focusing on the merger of Public Sector Banks to manage the capital more efficiently. In 2021, it merged 10 Public Sector (PSU) Banks into 4 banks. The government is also actively looking to address the issue of Non-Performing Assets (NPAs) through the formation of ‘Bad bank’. A key proposal announced in the recent Budget, a ‘Bad Bank’ is a special type of financial institution that buys bad debtors of a bank at a mutually agreed value and attempts to recover the debts or associated securities by itself. The proposed ‘Bad bank’ has received all regulatory approvals, and lenders plan to transfer at least ₹50,000 crore of toxic assets to it by March. All in all, I see the Indian banking sector go from strength to strength in the coming time.

What are the important things to keep in mind before taking a personal loan?

Most of us don’t have enough money to meet all our needs, so we have little option but to borrow it. Hence, it’s important to follow a few rules before securing a loan. First, don’t seek a loan when you’re desperate. Otherwise, you’re at risk of agreeing to a source of funding with an exorbitant interest rate or unfair stipulations. Secondly, take a loan that you can easily repay and keep the tenure as short as possible. I have seen students take huge amounts of personal loans for studies or other purposes in the hope that once they secure a job they will repay the money with ease. However, things go downhill when they don’t secure a job. Thirdly, even if you do not have any plan of securing a loan in the near future, keep abreast with the new rules and changes in interest rates as you have no idea what the distant future has in store.

Dheeraj Sharma is Asst. Editor (Newsroom). He covers events, webinars, conducts interviews and brings you exciting news snippets. He has over 10 years' of experience in prominent media organizations. He takes pleasure in the small things in life and believes a healthy work-life balance is key to happiness. You can reach him at [email protected]