Home / Business and Economy / Parekh: Banking Faces Slowdown, Not Systemic Threats
Parekh: Banking Faces Slowdown, Not Systemic Threats
5 May
Summary
- No major systemic risks for India's finance sector identified.
- Loan growth is expected to experience a short-term slowdown.
- Retail investors are shifting towards mutual funds over deposits.
India's banking and financial services sector is currently free from major systemic risks stemming from global geopolitical uncertainties, according to industry veteran Deepak Parekh. He predicts a temporary deceleration in loan growth, a common occurrence during such periods of global instability.
Parallelling this, Real Estate Investment Trusts (REITs) are experiencing notable growth across India, indicating a vibrant real estate investment landscape. However, the insurance sector continues to show low penetration rates, presenting opportunities for expansion.
Deposit mobilization has seen a moderation, as retail investors are increasingly directing their funds towards mutual funds. The evolving impact of artificial intelligence on the financial services industry is also a significant ongoing development.
