Shyam Srinivasan, MD & CEO, Federal Bank, said that Indian economy is seeing a good period where the outlook is positive despite an uncertain external environment.
India, at present, is one of the fastest-growing economies in the world. In the current fiscal, especially between July and September of 2023, it grew at a pace of 7.6 per cent. If India maintains its current growth trajectory, it is projected to become the world’s third-largest economy by 2027. This significant advancement showcases India’s economic potential and highlights the country’s increasing influence on the global stage.
Talking about the current state of the economy, banking, and credit flow, Shyam Srinivasan, MD & CEO, Federal Bank, said that India is witnessing a Cinderella moment in terms of banking and economy. “It is a Cinderella moment for the economy and banking sector. Everything looks in a good place. The outlook is positive despite an uncertain external environment. This is indeed the best period in a long, long while.”
Talking about the challenges and growing non-performing assets about a decade ago, Srinivasan added: “At present, the banking sector is in a sweet spot. And it is not by accident, it is by design. Fundamentals have dramtically changed. However, all who are coming to invest or looking to invest in the India growth story, cannot ask for a better time. I feel it is the time where everything looks great for a good growth.”
The banking sector, especially the public sector banks, posted a decent set of numbers in the October-December quarter on the back of higher interest income, lower credit costs, and improved asset quality. The combined profit of 12 Indian public sector banks (PSBs) in Q3 FY24 jumped 3.84% to Rs 30,297 crore as compared to Rs 29,175 crore recorded in the same period last year.
For the first nine months of the FY24, PSBs have earned a cumulative profit of Rs 98,358 crore as compared to Rs 70,166 crore in the year-ago period, an increase of 40.17%. In Q1 and Q2 of the current fiscal year, public sector banks earned a cumulative profit of about Rs 34,418 crore and Rs 33,643 crore, respectively.
“Typically, a bank needs capital, good credit quality, and good governance. If you see all banks at present are well capitalised. The NPAs have come down to 3%. You can’t ask for a better opportunity than this. Besides, technology is supporting the whole space,” he added.
