India's Banking Sector Faces $4 Trillion Challenge to Meet 2047 Economic Ambitions

India's banking sector needs to raise $4 trillion to support its goal of becoming a developed economy by 2047. A report highlights the imperative for financial and banking assets to grow at a significantly faster pace than GDP. Financial assets must increase from $6.4 trillion to $120 trillion by 2047.

India's ambition to transform into a developed economy, 'Viksit Bharat,' by 2047 has placed an enormous demand on its banking sector, necessitating a capital infusion of USD 4 trillion over the next two decades. According to a recent report by HSBC Mutual Fund, this financial injection is crucial to sustain economic growth at a pace much superior to the country's GDP trajectory.

Currently, India's GDP stands at USD 3.4 trillion and is expected to balloon to USD 30 trillion by 2047. To accommodate this surge, financial assets, valued at USD 6.4 trillion in 2023, must expand to USD 120 trillion, while banking assets are projected to skyrocket from USD 3.1 trillion to an impressive USD 45 trillion.

The report emphasizes that a robust banking system is essential for fostering economic acceleration through credit provision, investment facilitation, and enhanced financial services. With the U.S., China, and Germany leading with significantly larger financial assets, India's financial sphere must undergo transformative growth to compete on the global stage and bolster its economic objectives.

(With inputs from agencies.)