Despite crises, outlook remains positive for Indian banks

Despite crises, outlook remains positive for Indian banks

Dubai: Aditya Birla Sun Life Asset Management Company Ltd has maintained a positive outlook on the Indian banking sector despite growing uncertainties and recognised the potential risks associated with a global economic slowdown. The investment management company is confident that Indian banks will perform comparatively well during this phase and remain a bullish asset class, along with the automobile and infrastructure sectors. The banking and financial sectors remain highly desirable due to their well-capitalised balance sheets and potential for growth at 18-20 per cent, said A. Balasubramanian (Bala), Managing Director and CEO of Aditya Birla Sun Life Asset Management Ltd. “Credit growth has also been growing at 30 per cent. Household debt is under control, savings rates are rising, and inflation is more controlled compared to the global market,” said Bala. A higher share of retail deposits and lower asset liability management (ALM) gaps is the other key positive for Indian banks. From an NRI perspective, however, matters are status quo. “There is no change in the capital gains tax in India. “The way now you have to look at it is, India in any parameters much more stable, whether it is on interest rate movement or currency,” said Bala.