A employee cuts metallic inside a workshop manufacturing metallic pipes in Mumbai. File
| Photo Credit: Reuters
India’s financial growth prospects ought to remain sturdy over the medium time period, with GDP increasing 6-7.1% yearly in fiscal years 2024-2026, S&P Global Ratings stated on November 16.
In a report titled ‘Global Banks Country-By-Country Outlook 2024’, S&P stated the banking sector’s weak loans will decline to 3-3.5% of gross advances by March 31, 2025, on the again of structural enchancment, together with wholesome company stability sheets, tighter underwriting requirements and improved risk-management practices.
Interest charges in India are unlikely to rise materially, and this could restrict the chance for the banking business, it added.
“Unsecured personal loans have grown rapidly and could contribute to incremental NPLs. We believe underwriting standards for retail loans generally remain healthy and overall level of delinquencies remains within acceptable limits for this product category,” S&P Primary Credit Analyst Deepali Seth Chhabria stated.
The report stated that world uncertainties may have a lesser influence on the Indian economic system.
Slower world growth and exterior demand will weigh on financial exercise and will gas additional inflation. However, on condition that India is domestically oriented, the company expects the financial growth to be much less affected, it added.
“Economic growth momentum to continue. India’s economic growth prospects should remain strong over the medium term, with GDP expanding 6-7.1% annually in fiscal years 2024-2026,” S&P stated.
India’s actual GDP rose 7.8% year-on-year within the June quarter, up from 6.1% within the March quarter.
The Reserve Bank of India has forecast a 6.5% financial growth for the 2023-24 and 2024-25 fiscal years.
The report additional stated that the State Bank of India and the main private-sector banks have largely addressed their asset-quality challenges.
Many public-sector banks nonetheless carry comparatively excessive volumes of weak belongings, which can end in increased credit score losses and hit profitability; their efficiency lags that of the business.
