Trade Analytics
Banking
Total banking assets in India is expected to cross US$ 28.5 trillion in FY25.

Indian Banking Industry Analysis

Latest update: December, 2016

Healthy Growth of Banking Sector - Credit

  • 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.
  • In March FY16, total credit extended surged to US$ 1,016 billion.
  • Demand has grown for both corporate and retail loans; particularly the services, real estate, consumer durables and agriculture allied sectors have led the growth in credit.

Healthy Growth of Banking Sector - Deposits

  • During FY06–16, deposits grew at a CAGR of 11.47 per cent and reached 1.46 trillion in FY16.
  • Strong growth in savings amid rising disposable income levels are the major factors influencing deposit growth.
  • Deposits under Pradhan Mantri Jan Dhan Yojana (PMJDY), have also increased. As of October 2016, US$ 6,755.5 million were deposited, while 249.8 million accounts were opened.

 

Last Updated: December, 2016

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.

As on September 2016, the outstanding credit to NBFCs stood at US$ 55.27 billion, growing at 25 per cent on year-on-year basis. Bank credit to non-banking finance companies (NBFCs) has touched the highest in three years.

Indian banks are increasingly focusing on adopting integrated approach to risk management. Banks have already embraced the international banking supervision accord of Basel II. According to RBI, majority of the banks already meet capital requirements of Basel III, which has a deadline of March 31, 2019. Most of the banks have put in place the framework for asset-liability match, credit and derivatives risk management.

Deposits under Pradhan Mantri Jan Dhan Yojana (PMJDY) are growing. As on November 09, 2016, US$ 6,971.68 million were deposited, while 255.1 million accounts were opened.

Rising incomes are expected to enhance the need for banking services in rural areas and therefore drive the growth of the sector; programmes like MNREGA have helped in increasing rural income aided by the recent Jan Dhan Yojana. The Reserve Bank of India (RBI) has relaxed its branch licensing policy, thereby allowing banks (which meet certain financial parameters) to set-up new branches in tier-2 to tier-6 centers, without prior approval from RBI. It has emphasised the need to focus on spreading the reach of banking services to the un-banked population of India.

Sectoral Presentation (December, 2016)

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Banking India

Growth in money supply over past few years (US$ billion)
Gross NPAs to Gross Advances in India

 

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