The publication "Destination India - Banking Opportunities - Entry Strategy and the Road Ahead" aims to establish that India is an attractive destination for conducting business, with a strong focus on the Banking Sector. The report gives an overview of the Indian economy, showcasing the growth trajectory of India, thereby ascertaining India as an attractive destination.
The key findings of the report are as follows:
- India is ready to experience an average real Gross Domestic Product (GDP) growth of 5.8% between 2007-50 and it is likely to grow to almost 90% of the size of the US economy by 2050, while in the short-term, the GDP growth is projected to be 8.2% in FY11 and 9% in FY12.
- Over the last five years, India has ranked amongst the top three FDI destinations, taking its place after China and the United States.
- The rural population of India remains significantly under-penetrated, and it is essential to leverage technology to reach this unbanked population.
- In emerging markets, banking reaches about 37%of the population, compared to a 50% penetration rate for mobile phones. For every 10,000 people, these countries have one bank branch and one ATM—but 5,100 mobile phones.
- RBI has emphasised the need to focus on spreading the reach of banking services to the unbanked population of India. Statistics state that only 37% of bank branches of Scheduled Commercial Banks are in rural areas with only around 40% of the population holding bank accounts.
- The 2010 Union Budget has stated that the RBI is considering giving some additional banking licenses to private sector players to extend geographic coverage and providing improved access to banking services. In line with this, the RBI on August 11, 2010 released the much awaited discussion paper on ‘Entry of New Banks in the Private Sector’. The discussion paper seeks views / comments of banks, non-banking financial institutions, industrial houses, other institutions and the public at large by September 30, 2010.
- PricewaterhouseCoopers can help new entrants into the banking sector at various stages in establishing the rationale for market entry, establishment of presence and assistance in branch enablement.