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Banking: March 2013

March, 2013

Indian banks total asset size is recorded at US$ 1.5 trillion in FY12. Increase in working population and growing disposable incomes is propelling the demand for banking and related services.

Indian banks currently devote around 15 per cent of total spending on technology. Public sector banks account for over 73 per cent of interest income in the sector. Deposits have grown at a compound annual growth rate (CAGR) of 17.6 per cent over FY07-12; in FY12 total deposits stood at US$ 1,265.1 billion.

Rapid urbanisation, decreasing household size and easier availability of home loans has been driving demand for housing. Credit to housing sector grew at a CAGR of 10.5 per cent during FY08-12. Demand in the low and mid income segments exceeds supply three-to four-fold. The extension of interest subsidy to low cost home buyers has propelled demand for housing loan in the last few years.

Rising incomes are expected to enhance the need for banking services in rural areas and therefore drive the growth of the sector.

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