Economic Meltdown-Its Impact on Indian Banking Industry

The Economic Meltdown was general economic decline observed in world markets around the end of the first decade of 21st century. Around the world stock markets had fallen, large financial institutions had collapsed or been bought out, and governments even the wealthiest nations have had to come up with rescue packages to bail out their financial systems. Current statistics demonstrates with the purpose of practically all the globe economies had been stirred by the recession though the large industrialized economies may have reached bottom and are now commencing towards resurgence. Banking Industry of India is inherently strong, operationally assorted and demonstrates competence and flexibility besides being sensitive to India's economic aims of developing a market oriented, industrious and viable economy. The amount of banking assets in India totalled US$ 1.8 trillion in FY 13 and is estimated to touch US$ 28.5 trillion in FY 25. Bank deposits have grown at a compound annual growth rate (CAGR) of 21.2 per cent over FY 06–13. In FY 13, total deposits were US$ 1, 274.3 billion. The revenue of Indian banks increased from US$ 11.8 billion to US$ 46.9 billion over the period 2001–2010. Profit after tax also arrived at US$ 12 billion from US$ 1.4 billion in this period. In the era of globalization, it would be rather idealistic to ascertain any industry in desolation, unaffected by the changes in the larger economic scenario. Financial crisis and economic recessions may likely curtail demand for banking services and the supply of quality banking services. The present paper will focus on the impact of economic meltdown on Indian banking industry, the underlying opportunities for the future growth and will also try to analyze some practical solutions to the problem.