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Last Updated: September 22, 2015
Jacques van den Broek
CEO, Randstad Holding
Latest update: September, 2015
• Credit off-take has been surging ahead over the past decade, aided by strong economic growth, rising disposable incomes, increasing consumerism and easier access to credit
• Total credit extended went up to US$ 1,089 billion by FY15
• Credit to non-food industries increased 9.75 per cent to US$ 1,073.4 billion in FY15, from the previous financial year
• Demand has grown for both corporate and retail loans
Last Updated: September, 2015
SECTORAL REPORT | August, 2015
As per the Reserve Bank of India (RBI), India’s banking sector is sufficiently capitalised and well-regulated. The financial and economic conditions in the country are far superior to any other country in the world. Credit, market and liquidity risk studies suggest that Indian banks are generally resilient and have withstood the global downturn well.
Indian banking industry is expected to witness better growth prospects in 2015 as a sense of optimism stems from the Government’s measures towards revitalizing the industrial growth in the country. In addition, RBI’s new measures may go a long way in helping the restructuring of the domestic banking industry.
The Indian banking system consists of 26 public sector banks, 20 private sector banks, 43 foreign banks, 56 regional rural banks, 1,589 urban cooperative banks and 93,550 rural cooperative banks, in addition to cooperative credit institutions. Public-sector banks control nearly 80 percent of the market, thereby leaving comparatively much smaller shares for its private peers.
As of August 5, 2015, 175 million accounts had been opened under Pradhanmantri Jan Dhan Yojna (PMJDY) and 154 million RuPay debit cards were issued. These new accounts have mustered deposits worth Rs 22,033 crore (US$ 3.31 billion).
Standard & Poor’s estimates that credit growth in India’s banking sector would improve to 12-13 per cent in FY16 from less than 10 per cent in the second half of CY14.
In the past few months, there have been many investments and developments in the Indian banking sector
There have been a lot of developments in the Indian banking sector.
The Indian economy is on the brink of a major transformation, with several policy initiatives set to be implemented shortly. Positive business sentiments, improved consumer confidence and more controlled inflation are likely to prop-up the country’s the economic growth. Enhanced spending on infrastructure, speedy implementation of projects and continuation of reforms are expected to provide further impetus to growth. All these factors suggest that India’s banking sector is also poised for robust growth as the rapidly growing business would turn to banks for their credit needs.
Also, the advancements in technology have brought the mobile and internet banking services to the fore. The banking sector is laying greater emphasis on providing improved services to their clients and also upgrading their technology infrastructure, in order to enhance the customer’s overall experience as well as give banks a competitive edge.
Many banks, including HDFC, ICICI and AXIS are exploring the option to launch contact-less credit and debit cards in the market shortly. The cards, which use near field communication (NFC) mechanism, will allow customers to transact without having to insert or swipe.
Exchange Rate Used: INR 1 = US$ 0.0150 as on September 8, 2015
References: Media Reports, Press releases, RBI Documents
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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