Classification of Indian Banking Industry and Development

Classification of Indian Banking Industry and Development

The Indian banking Industry plays a significant role in developing the economic system of India. It is one of the most dominant segments of India in the financial sector. Banking is the path of citizens that help in encouraging, saving and investing for the proper growth and development. The Indian banking always believes in innovation from the beginning of the Industry. It believes in Growth, Business, Policy, Innovation, and technology. The five strategies that bring the dynamic environment in the banking sector are Evolving Regulation, Customer Centricity, Alternative Channels, Changing Industry Structure, Increasing role of technology. These five strategies bring the best profit to the Indian financial system during the 1990s. The banking system has a lot of power and therefore aspirants show their dedication towards the banking system. 

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Banking Sector in India has grown significantly over the years and has been a key driver for Business growth

• The growing demand of Banking is based on the majority of its population. Over 60.3 percent of the population are under the working age (15-59).
• High disposable income on account of domestic savings rate of 30.8 percent (FY13).
• Huge under penetration with only 58.7 percent of households in the banking network.
• The mix of public, private and foreign banks imparting stability and growth Strong network of NBFCs complementing banks.
• Banking sector recorded double digit growth in excess of 15% in each of the last t five years.
• Increasing use of alternative channels, such as ATMs, mobile and internet banking.
• Technology-enabled innovative delivery channels using branches and technology.
• Innovative banking products such as teaser loans have led to increased public interest.
• Frequent capital infusion in public sector banks by the Government of India.
• Sound regulatory framework, at par with developed countries.
• Calibrated regulatory approach Incentivizing long-term bonds for infrastructure projects and affordable housing.

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Strength and Opportunities in Banking Industry:

• Strong regulatory framework and domestic demand making the sector relatively immune to global financial systems
• Strong macroeconomic fundamentals.
• Sound and domestic demand.
• High domestic savings rate.
• Large pool of educated personnel.
• Mix of public and private sector banks complementing each other.
• Return on assets for the Banking Industry has been relatively more stable and higher in terms of
• business growth & return to the various stakeholders.
• Large number of graduates who could be trained to be employable for banks
• Huge demand for banking services
• Supporting policy and regulatory framework
• Gradual liberalization of the sector
• Opportunity for domestic banks to learn from the rural banking practices of foreign banks
• Coverage in terms of population is bound to increase with Banking business projected to
• increase – Financial Inclusion especially in semi urban and rural location will rise through focused
• large scale financial inclusion programmes.
• Differentiated banking licenses will be given making room for more players. This would mean
• more niche players in payment bank & small bank space
• Emergence of specialize streams – Risk management, Treasury, Technology, Marketing, Sales,
• Recovery – Leading to a higher demand for a skilled workforce

Hence, these are the strengths and opportunities of the Banking Industry. Every year aspirants are waiting for the banking exam due to the higher growth, demand, and popularity of the banking sector. Hence, join the best IBPS clerk coaching in Kolkata that provides all the relevant information of banking and helps in preparing for the interview final selection process.

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