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Tuesday, August 28, 2012

70,000 more bank branches to come up by end of decade: Deepak Parekh

With banking sector poised for exponential growth, the number of bank branches are expected to double and 70,000 more branches will be added by the end of this decade, eminent banker Deepak Parekh has said.

The prospects for the Indian banking sector are very promising, he said at an investors conference yesterday.

Noting that banking sector would see exponential growth by the end of this decade, Parekh said that with a growing bankable population by 2020, the number of bank branches are expected to double from 2010 levels.

"This means 70,000 more branches will be added. Similarly, there will be a five-fold increase in the number of ATMs. India has a very low per capita ATM penetration of one ATM for every 15,000 people," said Parekh, who is Chairman of financial services major HDFC.

In comparison, China has one ATM for every 2,000 people. According to Parekh, there is enough retail business potential for all existing banks, new banks, NBFCs, micro finance companies and other players.

"Banks with strong retail customer relationships benefit from lower cost of deposits and this provides a stable source of funding.

"Secondly, banks that have a strong retail customer orientation have the ability to cross sell products and this helps them generate fee income," he said.

Parekh also said that consumer credit penetration in the country is extremely low at 8 per cent of the national GDP whereas it is 19 per cent in China and 25 per cent in Japan.

Among others, HDFC has presence in banking, mutual fund and insurance segments.

Source: EconomicTimes


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