To achieve a $30 trillion GDP by 2047, India will need to expand its financial services sector 20-fold, with banks playing a crucial role, according to a report released on Thursday by Boston Consulting Group (BCG), in collaboration with FICCI and the Indian Banks’ Association.
The report outlines that future growth will require banks to have a $4 trillion capital base, with one-third needing to come from new capital investments.
“India’s banking system is in a strong position today, acting as an ideal launchpad for the ‘Viksit Bharat’ mission,” said Ruchin Goyal, managing director and senior partner at BCG.
He added that banks must focus on structural shifts over the next two decades, including growing deposits, enhancing asset quality, improving productivity, and advancing digital capabilities.
MV Rao, Chairman of the Indian Banks’ Association, emphasised the need for innovation: “To fuel inclusion and credit growth, we must continue to innovate and reimagine our deposit strategies, aligning them more closely with the evolving needs and preferences of our customers.”
The report highlights several key structural themes essential for the continued success of India’s banking sector. These include the future of household savings, addressing asset quality challenges, embracing a bold vision for productivity, investing in digital growth, and building future capabilities.
India’s Digital Public Infrastructure (DPI) has established a robust financial foundation and accelerated digitisation.
Jyoti Vij, Director General at FICCI, noted, “It is now about taking capabilities to the next level and building for the next two decades – resilience, climate and cyber security needs to be strengthened, with a centralised, real-time network and specialised talent.”
While the Indian banking system has made considerable progress in developing future-ready competencies, it must seize upcoming opportunities.
The report points out that resilience must extend beyond technology to encompass entire business processes and highlights the “GenAI paradox,” where banks struggle to scale initiatives beyond pilot stages.
It also stated that climate risk presents both challenges and a $2.5 trillion financing opportunity, requiring a shift in operating models. Additionally, increasing cyber risks necessitate a centralised, real-time network and specialised talent to address these threats.
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