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Indian Banking History
Indian Banking History
The Indian banking industry has its foundations in the 18th century, and has had a
bumpy evolutionary growth path since then. The industry in recent times has
recognized the importance of private and foreign players in a competitive scenario
and has moved towards greater liberalization.
In todays scenario, Current and Saving accounts (CASA) is the banks lifeline for
profitable growth, but during FY2013 high interest rate choked them of such
deposits, slowing expansion to a five-year low of 7%. Credit growth of the
Scheduled Commercial Banks (SCBs) slowed down to 18.10% on FY2013, which
was 22.90% in FY2011 on account of the slowdown of the general economy. It is
expected that the credit growth in FY2014 will be in the range of 16-18% as there
is increasing demand for working capital loans and refinancing of forex loans by
Indian corporate. RBI has stated in its Research Report that- The growth of total
deposits of the (SCBs) stood at14.92% on FY2013 Vs 18.31% in FY2012. The
deposit growth is expected to moderate to 14-17% over FY2014-2016 with stable
Net Interest Margins (NIM). NIM of SCBs in FY2013 was 2.90% on average.
In the present competitive scenario, Private Banks are targeting the faster growing
retail loans and also improving the growth rate in fee income by increasing
transaction fees, whereas Public Sector Banks are targeting to push for higher
recoveries and upgrades in Non-Performing Loans (NPL) and also improving their
deposits mix by reducing the share of bulk deposits.