The banking sector is going through “trying times”, characterised by low credit growth, impairment of assets and low profitability, HR Khan, Deputy Governor of the Reserve Bank of India (RBI) said here on Sunday.
Addressing the inaugural ceremony of Bandhan Bank, he said credit growth dipped from 15 per cent in FY-14 to below 10 per cent last fiscal. Deposit growth has come down from 15 per cent to 11 per cent.
The asset quality, including non-performing assets and restructured loans, rose from 9 per cent (FY-14) to 10 per cent (FY-15). The return on equity stood at 9.88 per cent last fiscal (against 10 per cent in the year-ago-period).
“On top of that, Indian banks are to meet the global capital requirements. The government’s ₹75,000 crore capital infusion program will help towards that,” he added.
According to him, the banking space is set to become more competitive. Earlier this month, the RBI awarded in-principle approval to 11 entities to launch Payments banks. Khan said another round of licences will be granted to the small finance banks next month.