India's non-banking financial sector grew by 10%; declined globally by 3 %
The non-banking financial institutions are typically those that do not possess a full banking license and thus, cannot accept public deposits. These entities usually focus on lending and financing activities.
India's non-banking financial sector registered a growth of 10 per cent however globally the sector declined by 3 per cent, highlights a report by SBI.
The non-banking financial institutions are typically those that do not possess a full banking license and thus, cannot accept public deposits. These entities usually focus on lending and financing activities.
"Globally, the size of the non-bank financial intermediation (NBFI) sector declined by 3 per cent in 2022, which is the first notable decrease since. However, Economic Function 2 (EF2) entities i.e., entities undertaking lending activities, which are akin to NBFCs in India, exhibited a growth of around 10 per cent which is the highest among all five economic categories of the NBFI sector" said the report.
The report highlighted India as the third-largest entities in the non-banking financial sector, following the United States and the United Kingdom.
Over the past decade, the Indian banking system has demonstrated remarkable resilience, overcoming numerous challenges posed by both domestic and international economic environments.
The report said that the improvement in asset quality and the strong macroeconomic fundamentals have played a crucial role in improving the Indian banking sector.
It highlighted that the Indian government and regulatory bodies have focused on creating a level playing field for financial institutions. This has involved initiatives such as the creation of strong banks through mergers and capital infusion, improving governance practices, expanding the reach and quality of financial services, and enhancing the adoption of digital banking.
During the pandemic, the government maintained the financial sector's stability through substantial capital and liquidity buffers. This resilience is credited to the proactive measures taken by the Reserve Bank of India (RBI).
The report also highlighted RBI's efforts in strengthening the financial system included enforcing the regulatory measures that ensured the sector remained well-cushioned against economic shocks. These measures have not only helped in maintaining stability but also in fostering growth and innovation within the sector.
Recently India's digital banking landscape has also seen significant advancements. The push towards digital banking has been a major contributor to the sector's growth. This transition to digital platforms has expanded access to financial services, making them more inclusive and efficient.
Moreover, the report said that the government and regulatory bodies have prioritized customer protection, ensuring that the interests of the public are safeguarded amidst the digital transformation.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.
RECOMMENDED STORIES
Senior Citizen Latest FD Rates: Know what major banks like SBI, PNB, Canara Bank, HDFC Bank, ICICI Bank are providing on fixed deposits
Gratuity Calculator: Rs 38,000 as last-drawn basic salary, 5 years and 5 months of service; what will be gratuity amount?
Retirement Planning: In how many years your Rs 25K monthly SIP investment will grow to Rs 8.8 cr | See calculations
Top 5 Small Cap Mutual Funds with best SIP returns in 1 year: See how Rs 25,000 monthly investment has grown in each scheme
Top 7 SBI Mutual Funds With Best SIP Returns in 1 Year: Rs 25,000 monthly SIP investment in No.1 fund has jumped to Rs 3,58,404
SBI 5-Year FD vs MIS: Which can offer higher returns on a Rs 2,00,000 investment over 5 years? See calculations
02:00 PM IST