It is generally agreed upon that a healthy and strong banking system is one of the prerequisites for the sustained economic growth of any country. The banks in India have been going through several major challenges over the past few years. The last two years, in fact, have been nothing short of a rollercoaster ride for the financial sector worldwide in general and the Indian banking sector in particular. Internationally, two major events made the world get up and take note: the British exit from the European Union or Brexit, and Donald Trump winning the US presidency. Closer at home, there was replacement of 500 and 1000 rupees currency notes in the country which led to long queues in front of the banks. The effects of all these are still getting felt in the country and beyond it.
Against this tumultuous background, the following are the top uptrends that have been observed in the Banking Industry of India.
- There are over one and a half dozen new entries in the banking landscape that is expected to change the financial scenario forever. Since the last year till today, there are ten small financial banks that are being opened in the country and eight payment banks are all set to join the fray. These new entries are expected to intensify the competition by not only covering the main centers but also the hinterlands of the country. They will launch new products at higher rates in order to woo the depositors and low interest rates to sell loans. For instance, an innovative initiative by a payment bank offers a free talk time of one minute per rupee deposited in the bank along with 7.25% interest on savings accounts.
- The State Bank of India, the largest lender of the country, has catapult itself in the big league of banking by merging five associate banks with it. The combined balance sheet is projected to be at least INR 37 trillion. Just three years back, according to the estimates of Bloomberg, the bank was number 52nd in the world in terms of assets. This year it is expected to be at number 45th. This large balance sheet will expand the bank’s bandwidth to offer loans and improve its risk-taking capabilities. In the similar context, it can be hoped that the government will look out for consolidation of other banks based on the success of the State Bank of India.
- The year will also let us know if the nightmare of bad loans has been left behind or not. RBI, the central banking authority of the country has asked the banks to clear out their balance sheets. The banks have got to work since the last year, and at present, the gross non-performing assets are much less than what they had been in the last quarter of the past year. If the trend continues as it is expected to be, you can hope to see a better picture this year. However, it is unlikely that all of the banks will be back in the pink of health.
- India has a microfinance industry worth INR 65, 000 crores. The said industry is expected to change the ways as it has been showing the signs for it ever since there was a ban on the high value notes. This is the kind of financial industry that mostly runs on cash, where over 85 percent of the loans disbursed and repaid has been done in cash. Thus, to survive and thrive, the industry is expected to go into alliances with other banks like payments, universal banks, and small finance banks. There will be digital wallet service providers to collect and disburse money through banking channels. People would need to travel to the nearest branch as the money would not be disbursed at the doorsteps anymore. But since the industry would not need any middlemen for disbursements or collection of payments, it will bring down loan prices. Thus, the additional cost incurred by the borrowers will be compensated.
The changes occurring are rapid but definite and the need of the hour is trained professionals who can not only keep up with the change but efficiently participate in it as well. TimesPro’s Post Graduate Diploma in Banking and Financial Services (PGDBM 2.0) program is designed to train and bring forth such dynamic individuals into the industry. The program is specially designed for the ones looking to foray into the banking and financial sector of work. The training program focuses on the key skills and practical know-how required for employability.
The creators of the course believe that in order to understand the ever-evolving world of banking and finance, a learner needs to go beyond the books. TimesPro’s PGDBM 2.0 program has been hence created in such a manner that it offers a great amalgamation of industry-centered theory with interactions, discussions, and seminars to make sure that the real-world knowledge is imbibed by the learners and relevant ideas are developed. After the completion of the program, the trained professionals are well-equipped and confident enough to make their mark in the widest range of jobs in banking, financial, and insurance sectors. If banking and finance is your area of interest, TimesPro’s PGDBM program is the definite stepping stone to your success.