Banks Brace for Loan Slowdown Amid Global Uncertainties, Says Deepak Parekh

Industry expert Deepak Parekh reassures on the resilience of the banking and financial services sector despite global uncertainties. Short-term slowdown in loan growth is anticipated, with focus on REITs, insurance, and technological impacts. He also underscores the importance of financial literacy and new policy directions post-elections.

Industry stalwart Deepak Parekh has assured stakeholders that the banking and financial services sector poses no major systemic risks amid current global geopolitical tensions. However, he warned of potential short-term slowdowns in loan growth.

Speaking at the CII BFSI Summit 2026, Parekh highlighted sectors like oil, aviation, hospitality, and logistics as more vulnerable to the prevailing global environment. He emphasized the increasing role of real estate investment trusts (REITs) in India, describing them as a bridge between developers wanting to monetise assets and occupiers preferring rental models.

He noted low insurance penetration in India, stressing the necessity for financial literacy. Parekh mentioned how retail investors diversifying into mutual funds are stabilizing the domestic financial system. He pointed out the ongoing evolution of technology, particularly AI, and observed active interest from foreign investors and Indian conglomerates in the financial services space, signifying potential growth.