To achieve $30 trillion GDP by ’47, finance services must grow 20 times: Report
India’s ambition to achieve USD 30 trillion GDP by 2047 will require 20 times growth in the financial services sector, with banks playing a pivotal role.
This will require $4 trillion of capital base in banks, one-third of which will have to be fresh capital deployment, states a report released by FICCI and IBA (Indian Banks Association) in association with BCG (Boston Consulting Group) during FIBAC 2024 in Mumbai.
To achieve the designated target, the report highlights five key structural themes that banks need to work on.
“Bank deposits are shifting to pension savings and capital market investments, while retail lending expands. Despite this, financial assets and borrowings remain under-penetrated, offering significant growth potential. Banks must innovate deposit products, enhance customer awareness, and adopt new operating models to sustain growth,”the report stated.
Similarly, since India has a large adult population outside the formal workforce (90%), and hence largely outside the ambit of formal financing channels. So, lenders will have to re-imagine the operating model.
The report further highlighted that banks will need to boldly reimagine their operating model. Lastly, climate risk presents both threats and a $2.5 tn financing opportunity for the banks.
