Riding on the back of an economic boom, the India banking industry is slated to become the third-largest in the world by 2025, after China and the US, a report released by Boston Consulting Group, Federation of Indian Chambers of Commerce and Industry and Indian Banks’ Association (IBA) has said. The Indian banking industry is currently the fourteenth-largest in the world.Banks investing aggressively in alternate channels such as mobile banking, online banking and ATMs, will emerge winners in the retail banking segment in medium-term, the report said.
Going forward, banks will have to strive for excellence on five indicators — branch sales and service, new channels, lean operations, organisation design and bad debt management, the report titled Being Five Star in Productivity — Roadmap for Excellence in Indian Banking has said .
“The global banking crisis in the recent past has highlighted the perils of irresponsible banking and through this theme of productivity excellence we wanted to focus on the tremendous scope for Indian banks to improve their productivity and consequently, their profitability,” said MD Mallya, deputy chairman of IBA and chairman and managing director, Bank of Baroda.
{{/usCountry}}“The global banking crisis in the recent past has highlighted the perils of irresponsible banking and through this theme of productivity excellence we wanted to focus on the tremendous scope for Indian banks to improve their productivity and consequently, their profitability,” said MD Mallya, deputy chairman of IBA and chairman and managing director, Bank of Baroda.
{{/usCountry}}“New channels will not only enhance the productivity but can be a source of new customer acquisition,” said Saurabh Tripathi, partner and director, BCG.
There is scope for improving productivity in the Indian banking sector. On an average, Indian banks deploy around 20% of its staff in back–office processing (it can be as high as 40% for some banks) against a global best of 10%, said the report.