Growth of service sectorIn Indian Economy

GROUP MEMBERS

• Piyush Upadhya

• Prafful Sapra

• Mayank Agrawal

Service sector

• The segment of the economy that provides services to its consumers. This includes a wide range of businesses including financial institutions, schools, transports and restaurants.

• Also known as "tertiary sector of industry," or "service industry/sector".

The various sectors that combine together to constitute service industry are

Trade Hotels and Restaurants Railways Other Transport &

Storage Communication (Post,

Telecom) Banking

Insurance Dwellings, Real Estate Business Services Public Administration;

Defense Personal Services Community Services

Contribution Of Service Sector In Indian Economy

Meaning of Banking

• The primary activity of banks is "accepting deposits, for the purpose of lending and investment, deposits of money”.

• The essence of banking is TRUST.

Importance of Banking

• Motivate people to save.• Channelize household savings into productive

capital• Facilitate productive use of surpluses to

generate• employment and promote economic welfare.• Provides risk free income to depositors.

SECTOR OVERVIEW

Banking Deposits 1.4 trillion

41%Unbanked Population in India

42.8India’s Banking Penetration Score

157Total Number of Schedule Commercial Banks in India

27.5%Banking Sector’s Share in Total BFSI Employment

$1.8 trillion Total Banking Assets

India’s banking sector plays a key role in economic growth and employment

• Aggregate deposits of all Scheduled Commercial Banks (SCBs), as a percentage of GDP increased from 61% in FY07 to 67% in FY13 , driven by increasing demand from retail customers.

• Credit to GDP increased from 45% in FY07 to53% in FY13 indicating the improved lending of SCBs to various industries, which has enhanced trade and economic development.

CONTRIBUTION TO GDP

• WithintheBanking,FinancialservicesandInsurance(BFSI)sector,financialintermediariessuchasDSA’s,insuranceagents,mutualfundadvisors,etc.accountforthelargestshare(65–70%)ofemployment.

• Bankingstandssecondintermsofemployment(averageshareof28%).Thebankingsectorisprojectedtocreateupto2millionnewjobsinthenext5-10years,drivenbyissuanceofnewlicensesandeffortstoexpandfinancialservicesintoruralareas.

NUMBER OF BRANCHES –BY BANK TYPE

• Over all employment levels in the Indian banking system increased at a CAGR of 3.5% during the FY09-FY13 period . The main drivers of these employment trends have been the private sector banks which witnessed a growth of 8.7% CAGR in their number of employees during the same period

• On the other hand, public sector banks (PSBs) great CAGR of 2.3% while the foreign banks saw aced line of-3.8% in the employment levels.

SEGMENTATION & OFFERINGS

• LOAN PRODUCTS

1. Auto & personal loans

2. CV & construction equipment finance

3. Credit/debit cards

4. Loans against gold

5. Agri & tractor and education loans6. RETAIL

• DEPOSIT PRODUCTS

1. Savings accounts

2. Current accounts

3. Fixed / recurring deposits

4. Corporate salary accounts

OTHER OFFERINGS

Depository accounts

Mutual fund, insurance and gold sales

Private banking

NRI, bill payment & foreign exchange (forex) services

POS terminals

RETAIL BANKING

WHOLESALE BANKING

COMMERCIAL BANKING

Working capital & term loans

Bill collection

Wholesale deposits

Forex & derivatives

Letters of Credit & Guarantees

TRANSACTIONAL BANKING

•Cash management

•Custodial and clearing bank services

•Correspondent banking

•Tax collections

•IPO underwriting

INVESTMENT BANKING

Debt capital markets

Equity capital markets

Project finance

M&A and advisory

Growth in banking sector

• RISING FOCUS ON MOBILE BANKING

• SHIFT TO FEE-BASED BUSINESS MODEL

• ADOPTION OF DIGITAL TECHNOLOGIES

• FOCUS ON EMERGING SECTORS & RURAL MARKETS

• Deposits: TheRBI'sestimateofthebankingsystem'sdeposits’growthforFY14is14%.Depositsareexpectedtogrowduetoriseininterestrateonsavingsbankdepositswhichinturnwouldencouragehouseholdsavings,RBI’seffortstoattractNRIdepositsamongothers.

• Credit off-take : AspertheRBI’sestimates,bankcreditisestimatedtogrow15%inFY14.Theincreaseincreditcouldbeattributedtodemandforshort-termloans,workingcapital,andretailsegments.

• New branches : Bankswillcontinuetofocusonexpandingtheirnetwork.AccordingtoGartnerresearch,about2,000newbrancheswouldbeaddedinIndiabytheendof2014.Thiswouldresultinincreasedemploymentinthesector.

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