VISION 2020 IN BANKING AND            FINANCE            Presenters: Seemoli , Pardha , Anant & Preeti
Mergers & Acquisitions• More BRIC nation companies will be on the  acquiring side• The highest volume of M&A transactions ...
Globalization    Upsurge of remote        banking       Adoption of     global standards     Walk-in-loans &     credit ra...
Financial Inclusion• AADHAR will cover the entire population by 2020• Urbanization & Predicted literacy rate close to 80%•...
Commodity Markets120                                                        Commodities Turnover100 80 60                 ...
• FIs & banks will be permitted to invest in the  commodities markets.• Bill to grant additional authority to the FMC has ...
FDIs & FIIs•   FII inflows US$ 13 billion into Indian stocks till September 2012•   FDI inflow Rs. 734,240.48 Crores (162,...
PRIVATE EQUITY                      RsRs               Rs     Rs          Rs
Structure of Global GDP(in current US $ Trillion)                              2000          2011       2016      2020    ...
Broad Macro-Economic Parameters -    Previous Plan and Targets for Twelfth Plan•The labor force in India is expected to in...
Regulatory Systems in the Indian         Financial Market• Maintain the current conservative system of regulation• Indian ...
Microfinance• Financial education• Product range, informed by understanding client  needs• Credit bureaus• Client protecti...
Fiscal and Monetary policy• FDI• Investments• Flexible Defence expenditure• Short term loans
Banking Regulations                 Financial Inclusion in the banking sector                 The HR challenge : Re-skil...
CAPITAL ACCOUNT 2020•   Planning Commission envisages Foreign Direct    Investments (FDI) to contribute 35% (21% now) to  ...
Insurance in India in 2020Cabinet approval of    IRDA support:                                          Exit opportunity t...
What it has in store for India?              Immediate employment potential: 10                          million          ...
Indian Pension market in 2020•   Pension sector reforms (PFRDA Bill) : Favored by    FICCI, ASSOCHAM and CII.•   Easing ru...
Land Reforms and Land Acquisition    And Rehabilitation Resettlements Bill•   Infrastructure development for GDP target of...
References •   Faster, Sustainable and More Inclusive Growth (Oct 11) •   —Report of the Committee on India Vision 2020 (2...
Vision 2020 banking & finance
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Vision 2020 banking & finance

  1. 1. VISION 2020 IN BANKING AND FINANCE Presenters: Seemoli , Pardha , Anant & Preeti
  2. 2. Mergers & Acquisitions• More BRIC nation companies will be on the acquiring side• The highest volume of M&A transactions in 2020 will be seen in ‘Energy & Utilities’ sector• Standardization of accounting policies worldwide facilitate M&A• Indian banks may buy stakes in banks abroad
  3. 3. Globalization Upsurge of remote banking Adoption of global standards Walk-in-loans & credit rating for each customer Technology would be the key to competitiveness
  4. 4. Financial Inclusion• AADHAR will cover the entire population by 2020• Urbanization & Predicted literacy rate close to 80%• 600 million new customers accounts• Rural areas to be covered by ATMs• More households investing in shares , debentures , mutual funds
  5. 5. Commodity Markets120 Commodities Turnover100 80 60 turnover Rs. Trillion 40 20 0 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
  6. 6. • FIs & banks will be permitted to invest in the commodities markets.• Bill to grant additional authority to the FMC has been pending enactment for several years now – it will be passed• It is a Futures market , by 2020 options will be introduced• Commodities markets to overtake capital markets
  7. 7. FDIs & FIIs• FII inflows US$ 13 billion into Indian stocks till September 2012• FDI inflow Rs. 734,240.48 Crores (162,305.99 US$ million)• The Centre for Monitoring Indian Economy (CMIE) projects that FII inflows second half of FY13 at US$ 11.2 billion• Major FIIs like JP Morgan, Morgan Stanley and Deutsche Bank are believed to drive the positive wave of foreign investments
  8. 8. PRIVATE EQUITY RsRs Rs Rs Rs
  9. 9. Structure of Global GDP(in current US $ Trillion) 2000 2011 2016 2020 2025World GDP 32.2 68.7 90.5 110.5 140.5Advanced Economies 25.7 44.4 53.3 61.1 71.7 (79.7%) (64.6%) (58.9%) (55.3%) (51.1%)Developing and Emerging 6.5 24.3 37.2 49.4 68.8 (20.3%) (35.4%) (41.1%) (44.7%) (48.9%)of which India 0.5 1.9 3.6 5.8 10.0 (1.5%) (2.8%) (4.0%) (5.2%) (7.1%)Industry 11th Plan 12th Plan(9.0%) 12th Plan(9.5%) (in %) (in %) (in %)Agriculture, Forestry & 3.2 4.0 4.2FishingConstruction 7.8 10.0 11.0Financing, Insurance, Real 10.7 10.0 10.5Estate &Business servicesTotal GDP 8.2 9.0 9.5
  10. 10. Broad Macro-Economic Parameters - Previous Plan and Targets for Twelfth Plan•The labor force in India is expected to increase by 32 per cent over thenext 20 years•The Interest rates may be decreased (to 8%) in order to encouragegrowth 11th Plan 12th Plan 12th Plan (Target 9.0%) (Target 9.5%)1 Investment Rate 36.4 38.7 41.42 Fixed Investment 30.9 33.5 35.53 Savings Rate 34.0 36.2 38.94 Current Account Balance -2.4 -2.5 -2.55 WPI Inflation Rate 6.0 4.5-5.0 5.0-5.5
  11. 11. Regulatory Systems in the Indian Financial Market• Maintain the current conservative system of regulation• Indian banks should conservatively trade in derivative market, not be influenced by US,UK banks• Should resolve problems such as increasing population, high unemployment rate• Should not let the debt level rise as much as US, Europe
  12. 12. Microfinance• Financial education• Product range, informed by understanding client needs• Credit bureaus• Client protection• More loans available for rural india
  13. 13. Fiscal and Monetary policy• FDI• Investments• Flexible Defence expenditure• Short term loans
  14. 14. Banking Regulations Financial Inclusion in the banking sector The HR challenge : Re-skilling, attracting and Challenges retaining Automation implications Mortgages to cross Rs 40 trillion by 2020 The number of branches to grow 2X,ATMs 5X Investment banking to grow ten fold. Opportunities Infrastructure financing : Rs 20 trillion on bank books Wealth management : 10X growth
  15. 15. CAPITAL ACCOUNT 2020• Planning Commission envisages Foreign Direct Investments (FDI) to contribute 35% (21% now) to gross capital formation.• FII inflows to get stronger in the second half of this fiscal.• Plan panel sets $100 billion target for pharma sector.
  16. 16. Insurance in India in 2020Cabinet approval of IRDA support: Exit opportunity to FDI cap hike to Secure Rs 40,000 promoters 49% crore India 2020: Converge Among top three Innovate Insurance in India in life insurance markets Penetrate 2020
  17. 17. What it has in store for India? Immediate employment potential: 10 million 30 percent mandatory procurement preferably from MSMEs Infrastructure development: rural development Technical expertise and better quality
  18. 18. Indian Pension market in 2020• Pension sector reforms (PFRDA Bill) : Favored by FICCI, ASSOCHAM and CII.• Easing rules for pension and insurance funds could help secure $1 trillion in investment up to 2017.• FDI could raise share of pension fund assets to GDP from the current 5% to close to 17%, meeting capital needs.
  19. 19. Land Reforms and Land Acquisition And Rehabilitation Resettlements Bill• Infrastructure development for GDP target of 5.5 trillion USD by 2020.: incentive to infrastructure financing• Bigger share of the rewards of urbanization and industrialization to landowners.• Balance between social and economic uses of land
  20. 20. References • Faster, Sustainable and More Inclusive Growth (Oct 11) • —Report of the Committee on India Vision 2020 (2002) • —Report of The Committee on Angel Investment & Early • Stage Venture Capital June 2012 • http://www.dnb.co.in/India2020economyoutlook/Macro_Ec onomic_Outlook2020.asp • www.perjacobsson.org/external/np/seminars/eng/.../fiscal/.../ heller.pdf • www.business-standard.com/india/...regulationfinancial- system/416450 • www.articles.economictimes.indiatimes.com • www.mpra.ub.uni- muenchen.de/4438/1/MPRA_paper_4438.pdf • http://socialenterprise.georgetown.edu/events-and- media/2011-3/the-future-of-microfinance-opportunities- challenges-for-financial-inclusion
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