Indian Banking System: The Current State & Road Ahead Page | 1
The pace of development for the Indian banking industry has been tremendous over thepast decade. As the world reels from the global financial meltdown, India’s banking sectorhas been one of the very few to actually maintain resilience while continuing to providegrowth opportunities, a feat unlikely to be matched by other developed markets around theworld. FICCI conducted a survey on the Indian Banking Industry to assess the competitiveadvantage offered by the banking sector, as well as the policies and structures required tofurther stimulate the pace of growth.A majority of the respondents, almost 69% of them, felt that the
Indian bankingIndustry was in a very good to excellent shape
, with a further 25% feeling it was ingood shape and only 6.25% of the respondents feeling that the performance of theindustry was just average.This optimism is reflected in the fact that 53.33% of respondents were confident ina growth rate of 15-20% for the banking industry in 2009-10 and a greater than20% growth rate for 2014-15.
(Refer: Fig 1, Pg 5)
Some of the
of the Indian banking industry, which makes itresilient in the current economic climate as highlighted by our survey wereregulatory system (93.75%), economic growth (75%), and relative insulation fromexternal market (68.75%).On being asked to rate India on certain essential banking parameters (RegulatorySystems, Risk Assessment Systems, Technological System and Credit Quality) incomparison with other countries i.e. China, Japan, Brazil, Russia, Hong Kong,Singapore, UK and USA the following results emerged:
of Indian banks were rated better than China, Brazil,Russia, UK; at par with Japan, Singapore and Hong Kong where as all ourrespondents feel that we are above par or at par with USA.
(Refer: Fig 3, Pg7)
Respondents rated India’s
Risk management systems
more advanced thanChina, Brazil and Russia; 75% of the respondents feel that we are above or atpar with Japan, 55.55 % with Hong Kong, Singapore & UK and 62.5% withUSA.
(Refer: Fig 4, Pg 8)
of banks has been rated above par than China, Brazil, Russia,UK and USA but at par with Hong Kong and Singapore and 85.72% of therespondents feel that we are at least at par with Japan.
(Refer: Fig 5, Pg 8)