Banking & Financial Services

      India's banking and financial services sector is crucial for its economy, driven by significant credit and deposit growth, increasing banking penetration, and a strong adoption of technology. Key aspects include a mix of public and private banks, the expansion of Non-Banking Financial Companies (NBFCs), and government initiatives like PradhanMantri Jan Dhan Yojana (PMJDY) for financial inclusion. The sector offers various deposit accounts, facilitates lending, and is actively modernizing through digital transactions and data analytics. The Indian economy has experienced significant transformations in nearly every aspect of economic activity since liberalization in 1991. As a result, there have been several developments in the banking and financial services sector. It is encouraging to see that the Indian banking industry demonstrated amazing resiliency during the 2008 global financial crisis, and the nation emerged unscathed. Multinational and foreign banks have made significant inroads into the Indian banking market, giving customers a wide range of options.

Key Players & Structure

• Public and Private Banks: Both public and private sector banks operate in India, with private banks gaining significant market share in loans and deposits over the past decade.
• Non-Banking Financial Companies (NBFCs): These companies play a growing role in the sector, expanding their share of the market.
• Reserve Bank of India (RBI): The central bank regulates the banking sector and is involved in the functioning of various banks.

Growth & Market Trends

• Credit and Deposit Growth: The sector has seen a substantial increase in its loan and deposit base, supporting the economy.
• Increased Banking Penetration: Schemes like PMJDY have boosted access to financial services, particularly basic savings accounts.
• Shift in Credit Demand: Household credit demand is growing, leading to more retail loans within the overall credit system.
• Digital Transformation: The use of technology is accelerating, with a five-fold increase in the value of digital transactions over the last five years.

Services Offered

• Deposits: Banks offer various accounts, including savings accounts,fixed deposits, and specialized schemes like the Public Provident Fund (PPF) and Sukanya Samriddhi Account.
• Lending: Facilitating loans and credit facilities is a core banking function.
• Financial Inclusion: Government initiatives and services aim to ensure all households have access to basic banking facilities.

Government Initiatives

• Pradhan Mantri Jan Dhan Yojana (PMJDY): A national mission for financial inclusion to provide universal access to banking facilities.
• Pradhan Mantri Mudra Yojana (PMMY): A flagship scheme providing micro-credit to income-generating micro-enterprises.

      As a progressive, pro-growth chamber, MIICCIA is a fervent supporter of financial sector reforms and holds that, in order for the nation to maintain an inclusive and equitable growth trajectory, financial inclusion must be given top priority. In order to prevent inflation and create an atmosphere that is favorable for investment and expansion, prudent fiscal and monetary policy measures must be implemented.