The India Commercial Banking Report Provides Independent Forecasts and Competitive Intelligence on India's Commercial Banking Industry
DUBLIN, Ireland--(Business Wire)--
Research and Markets
(http://www.researchandmarkets.com/reports/c88904) has announced the
addition of "India Commercial Banking Report Q1 2008" to their
offering.
From Q108 we will be calculating the Commercial Banking Business
Environment Rating (CBBER) for each of the countries surveyed by BMI.
This will permit a more systematic and comprehensive comparison of the
conditions within the banking industries of the various countries than
was possible in the past. For each country, it will also facilitate a
comparison of the conditions within the banking sector and conditions
prevailing in other sectors.
India's overall CBBER, at 58.6, is towards the middle of the
countries in the Asia Pacific region that are surveyed by BMI.
However, this is largely due to the comparatively high at 76.3 score
on the heavily weighted banking market elements of the limits to
potential returns element. This, in turn, is reflective of the sheer
scale and entrenched position of the Indian banking system rather than
its high level of development.
In particular, the banking market elements of the limits to
potential returns have a much higher score than the country elements
(76.3 versus 33.2). In particular, the low levels of GDP per capita
are a very significant constraint on returns within the banking
sector. This is not to say that there are not also very significant
constraints limiting the realization of returns within the banking
sector itself. Indeed, in the
CBBER rating for India the banking market elements of the risks to
the realisation of returns are less than the than the country risk
rating (53.3 versus 60.2). That is, although the banking sector is
well positioned within the economy in general, it, rather than the
economy more generally, is also the primary locus of risks to its own
further development. This is because, although well regulated and
protected, India's banking system remains comparatively backward,
relying upon paper-based payment systems, and hampered by a cumbersome
legal system.
Despite an anticipated moderation in India's growth momentum, we
see upside risks to our 8.2% growth forecast for FY2007/08. Weak
infrastructure will continue to impose restraints on the country's
growth potential in the long term, while the recent global credit
crunch will see the central bank maintain a tight policy bias.
On the whole it appears as though economic growth will begin to
moderate in the coming quarters. This is because we expect a tight
monetary policy to eventually impact on demand, while the risk of a
sharper deceleration will present itself if the US subprime crisis
persists. That said, given last years robust growth rate of 9.4% -
which will have a positive spill-over effect on the Indian economy -
we do acknowledge upside risks to our 8.2% growth forecast for
FY07/08.
Indian consumers have been resilient to the Reserve Bank of India
(RBI)'s rate hikes in large part due to a dramatic growth in incomes.
But despite a falling inflation rate (wholesale price inflation fell
below 4.00% for the first time in over a year, to 3.26% in the week to
September 29), we expect the central bank to maintain a strong
tightening bias, especially in light of the latest GDP data. In its
annual report released on August 30, the central bank forewarned of an
increase in price pressures, due to shortfalls in farm production and
infrastructure, which would spur inflation and curb growth.
Overall, growth momentum is still expected to remain notable,
despite the anticipated slowdown. If growth for the fiscal year does
reach the central banks forecast 8.5% expansion rate, this will only
be marginally below the 8.6% average achieved over the past four
years. Inflation remains the biggest threat to this outlook, and
supply-side factors, if not dealt with appropriately, will render
these growth rates unsustainable.
For more information, visit
http://www.researchandmarkets.com/reports/c88904
Research and Markets
Laura Wood, Senior Manager
press@researchandmarkets.com
Fax: +353 1 4100 980
Copyright Business Wire 2008
