The banking industry of India has been comparatively much less affected from the global financial crisis which started in the US in the last quarter of 2008. Despite the collapse and nationalization of banks across the developed economies, banks in India seem to withstand the ongoing crisis on the strong fundamental base. The absence of complex financial products, regular intervention by central bank and so called “close banking culture” has buffered the Indian banking industry against the current financial turmoil.
According to a Senior Research Analyst at RNCOS, “Closed monitoring, strict credit disbursal norms, absence of inter-banking transactions and above all, low risk taking approach of consumers has saved the industry from collapse like their western counterparts. The regular adjustment of banking rates and closed monitoring by RBI has also helped the industry to largely absorb the financial shock from the west and has ensured the desired level of liquidity in the system. The only post-crisis after-effect which was seen on the industry is the defensive approach adopted by the banks in credit disbursal and close monitoring of the existing loan and advances given to industry.”
The degree of effect on the banking system will depend upon the exposure of the domestic financial institutions to foreign ones. Capital inflows from the west and foreign direct investment may witness increased impact, says the analyst. However, according to “Indian Banking Sector Forecast to 2012”, a new report by RNCOS, irrespective of the impact of the crisis, the banking industry assets base is expected to expand at a CAGR of around 24% through FY 2012.
“Indian Banking Sector Forecast to 2012” contains comprehensive research and rational analysis on various segments, like assets size, income level and number of cardholders, in the Indian banking industry. It also analyzes the current performance and growth opportunities, and helps clients to understand various products available in the market and their future scope. The future projections are made after analyzing the current market scenario, past trends and regulations laid by the central bank.
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RNCOS, incorporated in the year 2002, is an industry research firm. We are a team of industry experts who analyze data collected from credible sources. We provide industry insights and analysis that helps corporations to take timely and accurate business decision in today’s globally competitive environment.
