Why Experience Still Matters: The Untapped Power of India’s Former Banking Talent

The retired banking community in India has a lot to feel proud of – having contributed to a sector that has recorded high performance and profitability, helped advance the country’s financial inclusion goals, surpassed global peers in digital transformation and is now on its way to becoming one of the top three domestic banking sectors in the world.

However, once retired, professionals from this dynamic industry do not have adequate avenues to utilize their core expertise. And the goldmine of financial wisdom at their disposal remains untapped.

Now, retired banking professionals have an opportunity to contribute to a sector that promises to be a key enabler in India’s aspiration to become the third largest economy in the world by 2028. The Micro, Small and Medium Enterprise (MSME) sector in India has been a huge growth driver, contributing to around 30 percent of India’s GDP, 45 percent of its manufacturing output and 48 percent of exports, and providing employment to around 11 crore people. However, the sector continues to face a large credit gap of Rs 20-25 lakh crore that threatens to stifle growth.

Former bankers have core expertise that MSMEs can tap to address challenges around fundraising. These professionals, many of whom have served the sector for more than 35 years, possess unmatched institutional knowledge, analytical insights, regulatory familiarity and diverse banking sectoral expertise that are more relevant today than ever. Such financial wisdom goes a long way in helping MSMEs navigate the complexities around accessing credit.

Bridging the MSME Credit Gap: What Needs to be Done

• Non-standard accounting practices: A strong accounting foundation, including standard book-keeping practices and the maintenance of financial records, needs to be in place for informed decision-making and boosting lender confidence.
• Lack of formalisation: Many MSMEs continue to operate in an informal manner. Effort must go into sensitising them about registering their business under Udyam, which will improve their chances of accessing funds.
• Lack of awareness of government schemes: Several government schemes are available to MSMEs to help unlock credit. They need expert guidance to make sense of the various provisions, exclusions and access criteria.
• Limited access to tailored advisory services: MSMEs, particularly those in tier two, tier three cities, lack quality, transparent and pocket-friendly advisory services. There is a need to democratize access through digital platforms, bringing potential borrowers and intermediaries together for tailored credit advisory.

The Role that Retired Bankers Can Play

• Demystify the complex process of accessing credit facilities: Retired bankers can help businesses identify the right scheme, right lender, or provision to improve the success rate of loan applications. The Government of India has introduced several schemes for MSMEs, such as the collateral-free scheme of Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE). From the Financial Year 2025-26, the credit limits under CGTMSE have been enhanced as well but business owners need guidance on these credit facilities.
• Draw up project finance plans: Project finance plans are like a pitch deck used to present the plan for which a company is seeking funds. A professionally drawn up project finance plan makes a good impression on lenders.
• Manage & mitigate risk: Former bankers can support in identifying, assessing, and mitigating financial risks for MSMEs in the short, mid and long term.
• Prepare critical documents for fundraising: Quantitative projections are an evaluation of the company’s finances and utilisation of resources. Former bankers can help MSMEs in preparing critical documents, such as the Credit Monitoring Arrangement report and projected financial statements that offer visibility to lenders into parameters, such as key ratios.
• Improve turnaround time: Reports such as a ready-to-use financial health report and scorecard summarise a company’s financial stability and growth prospects. Such professionally prepared documents provide lenders the insights they need and help hasten the decision-making process.

In the medium to long-term…

• Handhold to improve accounting practices and processes: With expert guidance, MSMEs can overhaul their accounting practices over time. Banking professionals bring in planning and foresight into these processes, which will reflect positively in future financial statements.
• Create awareness about regulatory matters: In an ever-evolving regulatory landscape, businesses struggle to stay abreast of new developments. The services of a professional who monitors and advises businesses from time to time go a long way in improving compliance.
• Help improve credit rating: Building a credit score requires long-term vision. Timely repayment and appropriate utilisation of credit are the key pillars to building a good credit profile. A repayment and utilisation plan helps minimise downgrading risks.
• Stay engaged for business growth and scale: A credit advisor’s role does not end when a funding mandate is fulfilled. It is important to nurture a long-term relationship between a company and its credit advisor so that its finance practices continue to evolve to keep pace with newer business needs.

Tech-driven Platform Bridging the Gap

India needs niche digital platforms that connect its large pool of retired bankers to its cash-starved, growth-focused MSMEs. BankersKlub is addressing this need by leveraging advanced technology and onboarding hundreds of former bankers with deep expertise in diverse core banking skills such as credit, compliance, treasury management, risk mitigation, financial planning etc.

• Smart matching of advisors to businesses: The use of AI algorithms to do a first-level match of an advisor’s skillset, area of interest and geo mapping to a funding mandate.
• Flexible arrangement: Offering advisors the flexibility to work on a hybrid model, with a mix of virtual and physical interactions, and a transparent, variable and consultancy fee-based model.
• Broad geographical reach: Connecting advisors to businesses across the country and providing them an opportunity to use their financial wisdom to solve real-world problems.
• Guaranteed business: Improving their own financial well-being with minimum guaranteed business to meet an advisor’s appetite for growth on the platform.

How Former Bankers Have Contributed

Take the case of a metal alloys trader in Delhi NCR. The startup promoter’s previous attempts to raise debt were unsuccessful due to an unfavourable credit risk assessment and cash flow issues. A retired AGM from a public sector bank on  BankersKlub’s platform leveraged his expertise in credit and funding to clear the company’s pending payment of unsecured loans from various NBFCs. On his recommendation, the promoter started implementing better internal processes. He also assisted in the preparation of a financial model with reasonable cash flow, which helped improve the company’s CIBIL scores. As a result, the company found success in consolidating its borrowings and its debt fund proposal of INR 5 crore.

A startup in the real estate and co-working space market in north India was struggling to raise INR 3 crore for its expansion. A low CIBIL score and the nature of its business, which is considered high-risk, were primary funding barriers. A retired general manager of a public sector bank with 20+ years of experience in facilitating debt funding for SMEs resolved the company’s credit score issues and helped in the takeover of an existing loan to another private bank with enhanced credit limit. His advisory also included improving the company’s financial projections and cash flow management. These changes reflected positively on its credit profile, enabling the company to meet its funding goals successfully.

Final Thoughts

The demand for banking advisory services is set to grow as the MSME sector powers ahead. With deep knowledge of internal and external rating processes and regulatory understanding, retired bankers can take the lead in bridging the country’s MSME credit gap. Aiding in that endeavour is a one-stop platform that reimagines traditional advisory models into a digitally integrated approach that streamlines access to products, services and capital.

Authored By:

Dr. Rajat Chopra, Founder & CEO, Bankersklub.