Financial Services

With sound fundamentals and tremendous scope for growth, India has one of the most developed financial markets in the developing world. The sector, majorly divided into banking and non-banking segments, emerged stronger after the financial turmoil due to its strict adherence to conventional systems and effective supervision by the central authority.

The Indian financial services market has huge further potential because of factors like annual savings rates of more than 30 per cent, favourable demographic trends and growing demand from India’s 250 million-strong middle class.

Financial services industry is an ever evolving dynamically changing industry highly sensitive to the market scenarios. Regulatory changes, changing industry structure, inflation and interest rate changes have a large impact over this sector. The unpredictable conditions make this industry highly volatile but also present ample opportunity for companies to outperform others with organized smart moves.

India’s non-banking financial institutions have experienced sterling progress, strengthening the country’s journey towards inclusive growth. The Government’s initiatives have further fuelled sectoral growth, as NBFCs primarily cater to the financing needs of rural and semi-urban India. India’s securitisation market grew 15% in value terms during 2011-12, while number of transactions grew 32%, according to a report published by ICRA Ratings on Indian Securitisation Market during May 2012.

A recent study done by CRISIL emphasises that NBFCs are well positioned to establish a strong presence in the retail finance space. According to the study, NBFCs’ retail loan portfolio will rise to over Rs. 4 Lac Crores by the end of fiscal year 2012-13, by which time the segment will match the non-mortgage retail lending portfolio of banks.

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