Financial services sector must grow 20x for India to reach US$ 30 trillion GDP, says report

India’s ambition to achieve a US$ 30 trillion GDP by 2047 will require a 20-fold expansion in the financial services sector, with banks playing a pivotal role, according to a Boston Consulting Group (BCG) report released in collaboration with FICCI and the Indian Banks' Association. The report, titled "Banking for a Viksit Bharat," highlights the need for banks to anchor this growth in India’s predominantly bank-led economy, necessitating a US$ 4 trillion capital base, one-third of which will need fresh capital. Despite this challenge, India’s banking system is currently well-positioned with high profitability, robust capital adequacy, and low non-performing assets (NPAs).

The report stresses that transforming the financial sector over the next two decades will require structural shifts, including growing deposits, enhancing asset quality, and advancing digital capabilities. Chairman of the Indian Banks' Association, Mr. MV Rao, emphasized the importance of innovation in deposit strategies to drive inclusion and credit growth. Additionally, leveraging digitization and emerging technologies like GenAI will be crucial. Director General at FICCI, Ms. Jyoti Vij, pointed out that while India’s Digital Public Infrastructure provides a strong foundation, future efforts must focus on strengthening climate and cybersecurity resilience, real-time networks, and specialized talent to ensure the success of the banking sector in making India a developed nation.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.