Troubled India rumoured to have world’s third largest banking sector

KPMG said this could happen by 2025.

A report by KPMG said India’s banking sector could become the fifth largest in the world by 2020, The report, prepared in association with the Confederation of Indian Industry, also foresees a compound annual growth rate for bank credit of 17% in medium-term leading

The KPMG-CII report said Indian banking is expected to become fifth largest by 2020 and third largest by 2025. It noted that India has a relatively lower domestic credit to GDP percentage ratio that provides great growth opportunities for its banking sector.

The KPMG-CII report said policymakers need to provide a facilitating policy framework and infrastructure support to ensure meaningful financial inclusion. There also has to be collaboration among service providers with financial institutions partnering with telecom, technology, and consumer product providers to create an enabling environment.

There are currently only two Indian banks among the world’s top 100: State Bank of India, the country's largest lender, is 38th strongest based on asset size, while ICICI Bank, India's largest private sector bank, is number 99.