India’s non-banking financial companies (NBFC) sector is now the third largest in the world, behind only two other countries – the US and the UK – in a report by SBI that highlights the growing strength of the country’s financial sector. NBFCs do not have a full banking licence and therefore cannot accept public deposits, reports IANS. These institutions focus on lending money to consumers and businesses, playing a key role in driving economic growth.
Indian banking sector becomes better
According to the news, the report states that over the past decade, the Indian banking system has demonstrated remarkable resilience, overcoming many challenges posed by both the domestic and international economic environment. It states that improved asset quality and strong macroeconomic fundamentals have played an important role in improving the Indian banking sector. It highlights that the Indian government and regulatory bodies have focused on creating a level playing field for financial institutions.
The results of these efforts were visible
This includes initiatives such as building stronger banks through mergers and capital infusions, improving governance practices, expanding the reach and quality of financial services, and increasing the adoption of digital banking. During the pandemic, the government maintained financial sector stability through adequate capital and liquidity buffers. This resilience is attributed to the proactive measures taken by the Reserve Bank of India (RBI). The report also points out that the Reserve Bank’s efforts to strengthen the financial system included implementing regulatory measures that ensured the sector was well protected from economic shocks.
Significant progress in digital banking too
These measures have not only helped maintain stability but also helped promote growth and innovation within the sector. India’s digital banking landscape has also seen significant progress recently. The move to digital banking has been a major contributor to the growth of the sector. This shift to digital platforms has expanded access to financial services, making them more inclusive and efficient. The report also highlights that the government and regulatory bodies have prioritised customer protection, ensuring that the public’s interests are protected amid the digital transformation.
Latest Business News