According to a PriceWaterhouseCoopers report titled Banking In 2050, India could become the third largest banking sector by 2050 after China and US, leaving Japan, UK and Germany behind.
According to the report, “India has particularly strong long-term growth potential.”
Harsh Bisht, leader (Banking and Capital Markets), PwC India said, “Post downturn, Indian banks have become more efficient due to tighter credit assessment and disbursals, cost efficient model, weeded out non profitable and highly risky portfolios and increased the CASA substantially resulting in lower cost of funds for the bank.”
Indian banks have improved their cost to income ratio by 6 per cent on an average, he added.
India’s largest private sector bank, ICICI Bank improved its cost to income ratio from 53 per cent in 2007 to 38 per cent in 2010, owing to shift in strategy from aggressive growth to cost rationalisation.
The report includes 22 countries segregating them into G7 (US, Japan, Germany, UK, France, Italy and Canada), E7 (China, India, Brazil, Russia, Mexico, Indonesia and Turkey), other developed economies (Australia, S Korea, and Spain), newly emerging economies (Argentina, Vietnam, Nigeria, Saudi Arabia and South Africa).
According to the report the financial crisis has brought about an acceleration in the shift of economic power from the developed to the emerging economies.
China could overtake US in 2023 and India could overtake Japan in 2033. India’s domestic banking assets are expected to grow to $38,484 in 2050 from $945.