Defining contours of India offers new challenge to banking system

NEW DELHI : Deputy Governor of RBI S S Mundra has said the defining contours of the new India demography, urbanisation, digitisation, industrialisation, education offers a new challenge to the banking system in the country.     While on the one hand the numbers present sustained opportunity for the banks in terms of new stream of customers, it also presents challenges, Mr Mundra said .     At its current pace of growth, the Indian population is predicted to exceed China by 2025. Further, while China’s working-age population may peak around 2015 and shrink for a decade and a half thereafter, 68 per cent of Indias population would be within the working age range (15-64) until 2030, he said.

Life expectancy is also slated to increase to about 70 years by 2030.

These challenges are in the form of diverse behaviour patterns that customers in different age groups display.   Urban population is estimated to rise to 631 million recording an annual increase of 2.6 per cent as against an annual rise of 1.1 per cent in the overall population by 2030.   The internet penetration has seen a sharp growth over the last year, however, the extent of internet penetration at 20 per cent pales in comparison to other developing countries like China (46%), Brazil (53%) and Russia (59%); let alone the developed nations like US, UK and Japan where the number is in excess of 85 per cent, he said.

As the number of internet users in the country grows, the banks would be able to better utilise this medium as a delivery channel, Mr Mundra said.

(AGENCIES)

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