Banking & Finance

The Banking, financial services and insurance sector include companies that provide a range of financial products or services.

Last updated: May 11, 2022

The financial services sector is led by the banking industry with commercial banks representing more than 64% of total assets.

US$380bn

total value of assets managed by India's mutual fund sector in FY 19.

US$30.7bn

first-year premium posted by India's life insurance firms in FY 19.

Online

transactions have registered fastest uptake in India.

4th

largest private wealth market globally by 2028.

140mn

middle-income and 21mn high-income households to be added by 2030, which will drive demand and growth.

7%

average GDP growth in the last five years, based on strong structural reforms.

56%

of family-owned businesses in India open to PE funding, as opposed to 39% globally.

US$74bn

worth of digital payments processed in India in 2020 is expected to grow at a CAGR of 16.7% till 2024.

Consolidations

of +25 public-sector banks and insurance firms to streamline the sector.

150%

CAGR estimated in India's mobile wallet industry to reach US$4.4 billion by 2022.

Fastest

growing FinTech markets in the world. India is ranked the highest globally in FinTech adoption along with China.

Goods and Services Tax

The new and improved tax structure is strengthening the national financial system through 'One Nation, One Tax, One Market'.
Insolvency and Bankruptcy Code (Amended)

India’s Insolvency and Bankruptcy Code (IBC) promises to efficiently resolve non-performing assets (NPAs) at Indian banks.
Pradhan Mantri Jan Dhan Yojana

Pradhan Mantri Jan-Dhan Yojana (PMJDY) is National Mission for Financial Inclusion to ensure access to financial services, namely, Banking/ Savings & Deposit Accounts, Remittance, Credit, Insurance, Pension in an affordable manner.
Framework for Resolution of Stressed Assets

The RBI’s ‘Revised Framework for the Resolution of Stressed Assets’ has supplanted previous directives put in place, to bring the regulator’s policy in conformity with the IBC.

The Finance Bill 2020

To give effect to the financial proposals of the Central Government for the financial year 2020-2021.

Guidelines for Stand Up India Scheme

The objective of the Stand Up India scheme is to facilitate bank loans worth between US$ 13,458 and US$ 134 thousand to at least one Scheduled Caste (SC) or Scheduled Tribe (ST) borrower and at least one woman borrower per bank branch for setting up a greenfield enterprise. 
Special Liquidity Scheme for NBFCs/HFCs

The Union Cabinet has given its approval to the proposal of the Ministry of Finance to launch a new Special Liquidity Scheme for Non-Banking Financial Companies (NBFCs) and Housing Finance Companies (HFCs) to improve liquidity position of the NBFCs/HFCs.
Pradhan Mantri Suraksha Bima Yojana (PMSBY)

In light of the fact that a large proportion of the population have no accidental insurance cover, the Pradhan Mantri Suraksha Bima Yojana (PMJJBY) is aimed at covering the uncovered population at an highly affordable premium of just Rs.12 per year.

The International Financial Services Centres Authority Bill, 2019

An Act to provide for the establishment of an Authority to develop and regulate the financial services market in the International Financial Services Centres in India and for matters connected therewith or incidental thereto.
The Finance Bill 2019

A bill to give effect to the financial proposals of the Central Government for the financial year 2019 2020.
Partial Credit Guarantee Scheme (PCGS)

The Union Cabinet, has approved the Sovereign portfolio guarantee of up to 20% of first loss for purchase of Bonds or Commercial Papers (CPs) with a rating of AA and below (including unrated paper with original/ initial maturity of up to one year) issued by NBFCs/ MFCs/Micro Finance Institutions (MFIs) by Public Sector Banks (PSBs) through an extension of the Partial Credit Guarantee Scheme (PCGS).
Policy for Digital Economy

The Government has recently introduced National Policy on Electronics (NPE) and National Policy on Software Products (NPSP) in 2019 for the growing digital economy.

Amendments to the Securities and Exchange Board of India (International Financial Services Centres) Guidelines, 2015

As per the circular released on July 9, 2020 , section 4 (1) of SEBI (IFSC) Guidelines, 2015 has been revised. to protect the interests of all stakeholders.
Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) (Second Amendment) Regulations, 2020

The Insolvency and Bankruptcy Code, 2016 enables a corporate person to initiate voluntary liquidation process if it has no debt or it will be able to pay its debts fully from the proceeds of the assets.
Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Fourth Amendment) Regulations, 2020

The Insolvency and Bankruptcy Code, 2016 (Code) envisages appointment of an authorised representative (AR) by the Adjudicating Authority to represent financial creditors in a class, like allottees under a real estate project, in the committee of creditors.

The Banking Regulation (Amendment) Bill, 2020

The Bill, when implemented, will include cooperative banks under the regulatory arm of the RBI.

The Insolvency and Bankruptcy Code (Second Amendment) Act, 2020

Given the impact of COVID-19 on businesses, the amendment disallows insolvency litigation against entities or creditors for a six month to one year period starting March 2020.

The Bilateral Netting of Qualified Financial Contracts Bill, 2020

The provisions of the bill allow for real-time risk assessment as opposed to notional assessment for bilateral contracts.

Resolution of the Monetary Policy Committee , October 2020

The Monetary Policy Committee resolved to maintain the repo rate at 4.0% through the liquidity adjustment facility. Efforts are to be directed towards the maintaining of inflation within a targeted range in order to facilitate economic recovery given the COVID-19 pandemic.
Guidelines on Regulation of Payment Aggregators and Payment Gateways

As per the November 17, 2020 update, the guidelines include regulatory frameworks and recommended technology for Payment Aggregators (PAs) and Payment Gateways (PGs).

Extension of the Emergency Credit Line Guarantee Scheme

The Emergency Credit Line Guarantee Scheme (ECLGS) has been extended till November 30, 2020, allowing entities including business enterprises and MUDRA borrowers to avail loans.

Guidelines on Regulation of Payment Aggregators and Payment Gateways

Effective from April 2020, the guidelines will be implemented under Section 18 and Section 10(2) of the Payment and Settlement Systems Act, 2007.

Reserve Bank of India

022-22610301

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The Reserve Bank of India is India's central banking institution, which controls the issuance and supply of the Indian rupee.

Securities and Exchange Board of India

+91-22-26449950 / 40459950

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The Securities and Exchange Board of India is the regulator for the securities market in India.

Directorate of Enforcement

24611989, 24692055

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Directorate of Enforcement is a specialized financial investigation agency under the Department of Revenue, Ministry of Finance, Government of India.

Insurance Regulatory and Development Authority of India

(040) 20204000

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The Insurance Regulatory and Development Authority of India is an autonomous, statutory body tasked with regulating and promoting the insurance and re-insurance industries in India.

Pension Fund Regulatory and Development Authority

011-26517501,011-26517503,011-26517097

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The Pension Fund Regulatory and Development Authority, a statutory body, is the pension regulator of India.

Ministry of Finance

investment opportunities

  • PE and VC investments have been steadily growing in India, driven by local entrepreneurship.
  • Asset Reconstruction Companies are making the most from the resolution of stressed assets.
  • Banking and Insurance companies are seeing growing interest with rising financial inclusion.
  • Successes of startups and mutual funds have opened new avenues of investment opportunities.
  • Rapid infrastructure and real estate developments across India, have opened up scope for major investments.
Useful Links:

key investors

India has a well-oiled enterprise promoting machinery that is backed by strong legislative, judiciary, executive and capital establishments

Asian Development Bank's largest grantee in 2018 at around US$3bn was India.

Blackstone Group, a US-based private equity firm, has picked up assets in India.

Canada Pension Plan Investment Board has invested in a variety of assets in India.

US investment bank Goldman Sachs Group has invested in a variety of Indian assets.

GIC, the sovereign wealth fund of Singapore, has invested in several Indian assets.

ENABLING ENVIRONMENT

India has a well-oiled enterprise promoting machinery that is backed by strong legislative, judiciary, executive, and capital establishments

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