Banking Sector in India

According to RBI’s Scheduled Banks’ Statement, deposits of all scheduled banks collectively surged by a whopping Rs 2.04 lakh crore (US$ 2,452.00 billion) as on FY24.

Advantage India

Robust
Demand

* Indian Fintech industry currently is Rs. 9,61,593 crore (US$ 111 billion) and estimated to be at Rs. 36,47,123 crore (US$ 421 billion) by 2029. India has the third 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 July 2024, there were 602 banks actively using UPI. The total number of digital transactions during this period amounted to 15.08 billion, with a total value of Rs. 2,10,000 crore (US$ 25.27 billion).​

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: Apr, 2025

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