Foreign banks can go deep; there is no dearth of space: Care Ratings
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MUMBAI: A cross-country study of banking systems shows that India's credit depth remains significantly lower than that of advanced economies, making a case for foreign banks to expand operations and establish regional centres to capture long-term credit growth opportunities, Care Ratings said in a report that analyses credit and deposits growth to GDP and CD ratios of India vs other countries like China, USA, UK, Japan Germany and France. Credit to GDP The study shows that the UK, France and China report high bank credit-to-GDP ratios, indicating extensive corporate, household and cross-border lending. Germany and Japan also display elevated credit penetration, consistent with bank-centric financial systems. On the other hand, the credit-to-GDP ratio in the US is relatively low due to the dominant role of bond markets, securitisation and non-bank financial intermediaries, according to the report. India's moderate ratio of 53% indi...