This will help to support the growing credit need of the economy as India strives to be Viksit Bharat by 2047, it said.
The report titled Reforms, Efficiency, and Productivity of Indian Banking Sector in the Last Decade, pointed out that though the concentration in the Indian banking industry is low, but the market share of the banks varies significantly, starting from 20 per cent to below 1 per cent.
India’s banking sector underwent a massive turnaround post 2014 from high NPAs and losses to robust health and record profitability with a series of reforms undertaken, it said.
It is interesting to noted that the performance of public sector banks were better compared to private banks during the last 12 years, the report said.
Technological innovations have already peaked in FY23 and the new breed of Artificial Intelligence (AI) and Machine Learning (ML) begets more innovations for banks in future currently unfolding, it said.
The efforts made by the Government and RBI to bring efficiency and productivity in the Indian banking sector have achieved the objective, the report said.
However, the takeover of the weaker banks impacted the efficiency and productivity of the acquiring banks, it noted.
According to the report, in future, bank digitization paired with artificial intelligence (AI) will increase efficiency by autonomous, self-optimizing ecosystems.
