India comprises a vast, dynamic and diverse financial industry. The pace of growth and expansion is constant as new competitors enter the market, as well as existing financial services grow continuously. The Indian financial services industry comprises commercial banks, NBFCs, pension and mutual funds, insurance companies and many other small but significant financial services. Although there is a diversity, commercial banks form the majority of the Indian financial services industry, making it a flourishing banking sector. In fact, over 60% of the assets within the financial system of the country are held by the banking sector.
However, the Indian government is constantly bringing in newer reforms and regulations for the growth and development of the finance industry. India has made an impact globally and is known to be one of the most significant capital markets today. With the government and the Reserve Bank of India (RBI) introducing various schemes and measures for small, micro and medium enterprises, the scale of the industry has grown considerably. The Credit Guarantee Fund Scheme for Small and Micro Enterprises and the Micro Units Development and Refinance Agency are two of the many exceptional and profitable measures introduced by the government and the RBI.
The total values as of 2017 have risen in almost every sector including Merger and Acquisitions, Private Equity, Venture Capital Investments, Mutual Funds, New Fund Order and Life Insurance. Moreover, the Bharat Interface for Money, inaugurated by Shri Narendra Modi, Prime Minister of India, has reached 10 million downloads, indicating the widespread popularity of the application. Adding to the ever increasing digital payment platform in India, Amazon India has received approval from the RBI to launch their independent digital payment wallet. Additionally, JM Financial Ltd. is set to launch an affordable housing finance company that will offer home loans for the low and middle income group. These are just two of the numerous indicators of the expanding financial services sector in India. Other giants such as Samsung, Facebook and Fino Paytech have also contributed largely to the financial sector.
In addition to the private companies,many favorable government initiatives have immensely altered and enhanced the Indian financial sector. The Union Budget 2017-18 has announced some significant reforms such as introduction of the bill to curb illicit deposit schemes, abolition of the Foreign Investment Promotion Board in 2017-18 and many more similar strong, powerful and effective moves to improve the financial sector in India. The Atal Pension Yojana that was received favourably has reached a 5.3-million subscriber base. Also, the government has allowed 100% foreign direct investment in cash and ATM management companies. The Securities Exchange Board of India (SEBI) is working towards offering new, cost effective hedging tools to farmers and other markets by allowing the security exchanges to launch contracts in the commodity market.
The Indian asset management industry has become one of the fastest growing in the whole world.Systematic investment plans (SIPs) under the mutual fund schemes reached a record high value of INR 4,584 crores as of May 2017. Since 2004, the gross domestic savings as a percentage of the gross domestic product has remained above 30%. At present, the growth of the financial sector in India is estimated to be at around 8.5% annually. With a stable growth rate of the financial and monetary policies, the financial services sector as a whole has seen some great rises and profits. Within the financial industry of India, the venture capital sector is amongst the most active and influential sectors. This only reflects on the global impact of the Indian financial sector and the ever-increasing options.
India is definitely one of the most dynamic and diverse global economies today. Banking and insurance are the strongest pillars of the Indian financial sector, along with other sectors that add to the flourishing market. The relaxed foreign investment rules have been greatly welcomed and received positively by the insurance sector. It is likely that many companies will now offer new plans that would increase the stakes in joint ventures with companies in India.
The Indian financial sector is definitely making waves in the global financial market today. The sector is recognised to be one of the most significant in the world and the fact that more and more global companies are showing interest in the Indian market is a proof of it. The Indian financial services sector is at an all-time high, and the new reforms, policies and opportunities by the government as well as the private sector further assure that the sector is only going to grow more.