India’s banking sector is set to drive substantial credit growth in the next few years, as the economy continues to expand, according to Zarin Daruwala, CEO of Standard Chartered Bank, India & South Asia.
Speaking at the India Business Leader Awards (IBLA) Jury Meet, Daruwala forecast credit growth to reach 15% over the next few years, emphasising the pivotal role of banking in catalysing the country’s economic aspirations.
“The banking sector typically grows at double the GDP rate, and with India’s economic growth accelerating, we can expect credit growth to hit around 15% in the near future,” Daruwala stated. She credited reforms such as the Insolvency and Bankruptcy Code (IBC) for improving the sector’s resilience, especially in managing non-performing assets (NPAs) and enhancing cybersecurity measures.
Over the past two decades, India’s banking sector has undergone a dramatic transformation, moving from an era without debit or credit cards to the age of UPI (Unified Payments Interface) and digital banking. This technological evolution has not only streamlined financial services but also played a crucial role in building resilience within the sector.
“The resilience of the banking sector in recent years has been commendable,” Daruwala said, pointing to the sector’s ability to navigate challenges like NPAs and the increasing sophistication of cybersecurity threats. “This strength will continue to support India’s economic growth, acting as a large multiplier for infrastructure and capital expenditure.”
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Alongside banking, Daruwala lauded the growth of India’s digital and services sectors, noting that these two engines have been instrumental in the country’s economic success. Digitisation, in particular, has been a game changer, democratising financial services and bridging gaps in accessibility across the country.
“If you look at digitisation, it has truly democratised financial services, making them more accessible to everyone,” Daruwala remarked. “UPI and other digital platforms have revolutionised the way India conducts financial transactions, making it more inclusive and efficient.”
Daruwala also underscored the importance of India’s growing share in global services exports, which currently stands at 4.2%. With further digitisation and an enhanced focus on the services sector, India has the potential to capture 6% or more of global services exports in the near future. “If India can increase its share in global services exports, it will bring more stability to the rupee-dollar exchange rate,” she explained.
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As India advances towards becoming a global economic powerhouse, the combination of a resilient banking sector, ongoing digitalisation, and a thriving services sector will be key to sustaining growth and meeting the country’s ambitious targets.