India’s ambition to achieve a $30 trillion GDP by 2047 will require a 20 times growth in the financial services sector, with banks playing a pivotal role, a report released by Boston Consulting Group (BCG) in association with FICCI and Indian Banks’ Association has said. The report titled “Banking for a Viksit Bharat” says that since India, is a predominantly bank-led economy, it will require the banking sector to play an anchor role while the other financial asset classes continue to grow much faster.
This will require $4 trillion of capital base in banks, one-third of which will have to be fresh capital deployment, the report said.
India’s banking system is in a strong position today – characterized by high profitability, robust capital adequacy, and low levels of non-performing assets (NPAs).
“The journey towards a $30 trillion economy by 2047 is an ambitious yet achievable goal for India, demanding a transformation in the financial services sector, with banks at the forefront,” said Ruchin Goyal, Managing Director and Senior Partner at BCG, and Co-author of the report. “India’s banking system is in a strong position today acting as an ideal launchpad for the Viksit Bharat mission.”
The report highlights that the financial sector will have to build for the next 2 decades through structural shifts – growing deposits, enhancing asset quality, and improving productivity, while advancing digital capabilities and future competencies.
“One of the primary objectives of the banking industry is to ensure financial inclusion, creating opportunities for every individual to grow and contribute to the nation’s progress,” said MV Rao, Chairman at Indian Banks’ Association, and Co-author of the report.
“To fuel inclusion and credit growth, we must continue to innovate and reimagine our deposit strategies, aligning them more closely with the evolving needs and preferences of our customers.”
The report adds that the growth will be aided by the full potential of India’s workforce which must be harnessed using digitization and emerging technologies like GenAI.
“India’s Digital Public Infrastructure has laid the foundation for a strong and resilient financial infrastructure and accelerated the pace of digitization,” said Jyoti Vij, Director General at FICCI, and Co-author of the report. “It is now about taking capabilities to the next level and building for the next two decades – Resilience, climate and cyber security needs to be strengthened, with centralized, real-time network and specialized talent. The banking sector’s success is instrumental in making India a developed nation.”
