Banking Sector in India

As of 2022, more than 80% of the Indian population has a bank account in comparison to 17% in 2009.

Advantage India

Robust
Demand

*Indian Fintech industry is estimated to be at US$ 150 billion by 2025. India has the 3rd largest FinTech ecosystem globally.​

* BCG predicts that the proportion of digital payments will grow to 65% by 2026.​

*That demand seems particularly strong when it comes to the critical need of protecting consumer data, where incumbent banks have a trust advantage. Some super apps may also turn to banks for access to banking licenses and to meet other regulatory requirements.​

Robust Demand Icon

Innovation in
Services

*In the recent period, technological innovations have led to marked improvements in efficiency, productivity, quality, inclusion and competitiveness in the extension of financial services, especially in the area of digital lending. ​

*Digitalization of Agri-finance was conceptualized jointly by the Reserve Bank and the Reserve Bank Innovation Hub (RBIH). This will enable delivery of Kisan Credit Card (KCC) loans in a fully digital and hassle-free manner. ​

*In Union Budget 2023, the KYC process will be streamlined by using a 'risk-based' strategy rather than a 'one size fits all' approach. ​

*In September 2023, Hitachi Payment Services launched India's first-ever UPI-ATM with NPCI.​

Opportunities in MRO

Business
Fundamentals

*The Indian banking industry has been on an upward trajectory aided by strong economic growth, rising disposable incomes, increasing consumerism and easier access to credit.

*Digital modes of payments have grown by leaps and bounds over the last few years.

*As on April 2024, there were 581 banks actively using UPI. The total number of digital transactions during this period amounted to 15.08 billion, with a total value of US$ 25.27 billion (Rs. 2.1 trillion).​

Policy Support

Policy
Support

* The RBI has launched a pilot to digitalize KCC lending in a bid for efficiency, higher cost savings, and reduction of TAT. This is expected to transform the flow of credit in the rural economy. ​

*In November 2022, RBI launched a pilot project on central bank digital currency (CBDC).​

*In Union Budget 2023, a national financial information registry would be constructed to serve as the central repository for financial and ancillary data.​

*In March 2023, India Post Payments Bank (IPPB), in collaboration with Airtel, announced the launch of WhatsApp Banking Services for IPPB customers in Delhi.​

Increasing Investments
Last updated: Jul, 2024

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