The financial sector reforms have brought about significant changes and had positive impact in the financial strength and the competitiveness of the Indian banking system. The prudential norms, accounting and disclosure standards, risk management practices, etc. are keeping pace with global standards, making the banking system resilient to global shocks.
Of late, the Indian Banks have undergone significant developments and investments. The sector presents huge opportunities and numerous challenges. Challenges include, financial inclusion, deregulation of interest rates on saving deposits, slow industrial growth, management of asset quality, increased stress on some sectors, transition to the International Financial Reporting System, implementation of Basel III and so on.
On the brighter side, the rising consumerism from the emerging ‘middle’ India and the higher purchasing power in rural India on account of rising employment provides opportunities for banks to look beyond the traditional customer segments. Further, over the last few years, the use of technology has been extensive in the Indian Banking Scenario and it has largely helped in implementation of Financial Inclusion and reaches the unbanked population in the country.
The CII-resurgentindia study provides a snapshot on the Indian Banking industry and details the challenges, opportunities and the growth drivers. Reforms in the Indian financial sector, the financial inclusion plan and the capital raising challenges for Indian banks are also dealt with.
The report was released at the CII Conference on Banking: Turbulence in the Industry – The Way Ahead organized by the Confederation of Indian Industry (Northern Region) on 21 December, 2013 at New Delhi.