India's Financial Services need to grow 20X to achieve $30 trn GDP by 2047: BCG-FICCI-IBA report - World News Network

Mumbai (Maharashtra) [India], September 5 (ANI): A 20-fold increase in the financial services sector is needed for India’s goal to achieve a USD 30 trillion GDP by 2047, according to a report titled “Banking for a Viksit Bharat,” released by Boston Consulting Group (BCG) in association with FICCI and the Indian Banks’ Association.
The report estimates that banks will need a capital base of USD 4 trillion, with one-third of this needing to be fresh capital deployment.
Despite the robust current state of India’s banking system–characterized by high profitability, strong capital adequacy, and low non-performing assets (NPAs)–the sector faces challenges and opportunities to sustain its growth and support national economic ambitions.
Ruchin Goyal, Managing Director and Senior Partner at BCG, and Co-author of the report, said, “India’s banking system is in a strong position today, acting as an ideal launchpad for the Viksit Bharat mission. It will have to build for the next 2 decades through structural shifts–growing deposits, enhancing asset quality, and improving productivity, while advancing digital capabilities and future competencies.”.
MV Rao, Chairman at Indian Banks’ Association, and Co-author of the report, said, “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.”
He added, “This growth will be aided by the full potential of our workforce, which must be harnessed using digitization and emerging technologies like GenAI.”
Jyoti Vij, Director General at FICCI, and Co-author of the report, said, “India’s Digital Public Infrastructure has laid the foundation for a strong and resilient financial infrastructure and accelerated the pace of digitization.”
She added, “It is now about taking capabilities to the next level and building for the next two decades–resilience, climate and cyber security need to be strengthened, with a centralised, real-time network and specialised talent. The banking sector’s success is instrumental in making India a developed nation.”.
There is a shift from physical to financial assets and informal to formal borrowing channels. Despite this, financial assets and borrowings remain under-penetrated, presenting significant growth opportunities. Banks need to innovate deposit products and enhance customer awareness.
The growth in retail lending, particularly unsecured lending, has driven financial inclusion but presents challenges. With a large population outside the formal workforce, banks must reimagine operating models and underwriting capabilities to better serve this segment.
Rising costs and slow income growth necessitate a bold reimagining of the operating model. Banks need to address the ‘sticky’ legacy cost structure and increase IT investments to enhance productivity.
Despite high rankings in digital maturity, Indian banks need continued investment to bridge gaps in digital opportunities, especially in product fulfilment and money insights.
The sector must embrace next-generation technologies and tackle increasing cyber risks. A shift in operating models is necessary to address climate risk and leverage a USD 2.5 trillion financing opportunity. (ANI)

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