According to Shanti Ekambaram, President of Consumer Banking, Kotak Mahindra Bank Ltd., the banking system in India has adequate liquidity and can seemingly not comply with US Banking Crisis. Indian banking sector seems resilient to world market volatility, says Ekambaram.
Ekambaram said that the Indian banking sector seems to be largely resistant to the current market volatility seen within the United States and Europe. In an interview with CNBC, the skilled defined that India’s banking system is structured in a different way from these within the US and Europe, making it much less weak to the identical sorts of dangers.
What makes Indian banking much less risky?
Ekambaram then went on to elucidate that Indian banks have largely invested in government bonds, that are topic to caps on how a lot will be held to maturity. This, together with the truth that a lot of the deposits in India are retail and the length of the deposits is comparatively quick, makes Indian banks much less prone to the sort of dangers seen in different nations.
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She added that the Indian banking sector has seen robust credit score development for the previous 18 to 24 months, with banks deploying funds into credit score. This, together with the federal government’s dedication to spending on capital expenditure, is predicted to spur development and hold the sector secure.
Does India stand utterly shielded?
Ekambaram, nonetheless, did be aware that there are some elements that might influence the sector. These elements embrace macros and liquidity within the banking system. Thus, she said that the general outlook for Indian banks stays constructive. The macro in India is at present in cheap form, and the federal government’s dedication to capital expenditure is predicted to help development.
Overall, the top of client banking at Kotak believes that the Indian banking sector is trying very completely different from what has been seen occurring within the U.S. and European Union, and is extra resilient to world market volatility.
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