'Private banks' loan growth to be double of PSBs till 2019'
Mumbai : Private sector bank credits will see a compound annual growth rate (CAGR) of 24 percent till fiscal 2019, as compared to 12 percent for the state-run ones, a joint study by industry chamber Assocham and ratings agency Crisil said on Tuesday.
 
"Advances of private banks are likely to grow at a compounded annual growth rate of 24 percent between fiscal years 2016 and 2019, materially ahead of 12 percent for public sector banks over the same four-year period," the report said.
 
"Private banks are expected to play an increasing role in banking sector's growth over the medium term, given their strong balance sheet, large presence in retail segment and strong, low-cost liability franchise," said the study titled "Indian banking sector: The changing landscape".
 
Bank credit growth, which remained muted at around eight percent in first half of the current fiscal, is expected to remain subdued at about 11 percent in the full fiscal as credit demand from corporate sector remains muted, it said.
 
"Near term growth will be driven by sectors like retail, agriculture, small and medium enterprises segments in private banks' advances," the report said.
 
"Private banks have developed an expertise and can offer quick end-to-end solutions to customers in these segments as they have invested significantly in developing branch network, retail franchise and technology platforms," it added.
 
Private banks have grown at a CAGR of 20 percent between fiscals 2010-2015 compared to 16 percent CAGR clocked by public sector banks (PSBs), Assocham said in a statement here.
 
"PSBs will be forced to focus on reorienting their business model and become more competitive and will need to increase focus on improving their performance instead of chasing growth," the report said.
 
It also said small and medium PSBs will face "greater challenges" and have to focus on developing regional expertise and small-ticket lending in retail and SMEs segments.
 
"PSBs will face strong competition from private banks in the low yield segments like mortgage, auto and from non-banking finance companies in the high yield segments like loan against property, used vehicles, personal loan, gold loan and others," it said.
 
Within private banks, growth is driven by new private banks, whose advances grew by 21 percent CAGR over fiscals 2010 and 2015, compared to 17 percent for old private regional banks, Assocham said.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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India set to grow fastest at 7.5 percent
Washington : Growing at the fastest pace, India is projected to grow at 7.5 percent in 2016 and 2017 fiscal as China slows to 6.3 percent in 2016 and 6.0 percent in 2017, according to the IMF.
 
The slower pace of China's growth primarily reflects weaker investment growth as the economy continues to rebalance, the International Monetary Fund said in its January update of the World Economic Outlook (WEO).
 
India and the rest of emerging Asia are generally projected to continue growing at a robust pace, although with some countries facing strong headwinds from China's economic rebalancing and global manufacturing weakness.
 
Growth prospects in parts of Asia have diminished somewhat as a result of the unexpectedly big external spillovers from China's growth transition, the WEO said.
 
In contrast, India, a major net commodity importer, continues to grow at the fastest pace among emerging economies.
 
Growth forecasts for most emerging market and developing economies reveal a slower pickup than previously predicted.
 
Still, growth is projected to increase from 4 percent in 2015- the lowest rate since the 2008-09 financial crisis- to 4.3 and 4.7 percent in 2016 and 2017, respectively.
 
Global growth, currently estimated at 3.1 percent in 2015, is projected at 3.4 percent in 2016 and 3.6 percent in 2017 with growth in advanced economies projected to rise by 0.2 percentage point in 2016 to 2.1 percent, and hold steady in 2017.
 
The pickup in global activity is projected to be more gradual than in the October 2015 WEO, especially in emerging market and developing economies.
 
In advanced economies, a modest and uneven recovery is expected to continue, with a gradual further narrowing of output gaps.
 
Risks to the global outlook remain tilted to the downside and relate to ongoing adjustments in the global economy: a generalized slowdown in emerging market economies, China's rebalancing, lower commodity prices, and the gradual exit from extraordinarily accommodative monetary conditions in the United States.
 
If these key challenges are not successfully managed, global growth could be derailed, the WEO warned.
 
In emerging market and developing economies, policymakers need to manage vulnerabilities and rebuild resilience against potential shocks while lifting growth and ensuring continued convergence toward advanced economy income levels, the WEO suggested.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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Selfie turns fatal for Rajasthan tourist
Jaipur : The craze for a selfie turned fatal for a 23-year-old tourist to the Mehrangarh Fort in Rajasthan's Jodhpur city on Tuesday, police said.
 
The man named Nikhil was trying to click a selfie on Tuesday evening when he fell down from the ramparts of the fort in Jodhpur, over 350 km from here.
 
"Nikhil had gone to the fort with his friends in the afternoon. While he was trying to click a selfie, he lost his balance and fell down near a temple from where he was rushed to the Mahatma Gandhi Hospital where he was declared dead," a police official told IANS over phone.
 
The deceased man's family has been informed, while police have launched an investigation.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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