Indian Banking Sector Poised for Growth Amid Economic Ambitions
Banking Sector's Role in Economic Growth
Amitabh Chaudhry, the Managing Director and CEO of Axis Bank, emphasized that the Indian banking sector is crucial for achieving the nation's goal of becoming a $10 trillion economy and realizing the vision of 'Viksit Bharat 2047.' He noted that despite global challenges, the domestic financial system is thriving. Chaudhry stated, “The government is committed to achieving its Viksit Bharat objectives by 2047, which necessitates a specific economic growth rate. The banking system must support this growth to ensure the economy reaches its targets.”
During his address at the ETNow.in Business Conclave and Awards 2026, he highlighted that the Indian banking sector is entering a robust growth phase, boasting its strongest balance sheet in a decade. He pointed out that key indicators such as Gross Non-Performing Loans (NPLs), Net NPLs, and Provision Coverage Ratios are at their best levels in ten years, with a notable increase in Return on Assets (ROA) across the sector.
Chaudhry revealed that in the fiscal year 2024-25, scheduled commercial banks in India generated nearly Rs 4 lakh crore in profits. After accounting for dividend distributions, the internal capital formation led to a net worth increase of around Rs 3 lakh crore. He mentioned that with a leverage ratio of seven to eight times, the banking system is well-positioned to facilitate significant credit growth without the need for additional capital.
Chaudhry estimated the current credit base to be approximately Rs 185 lakh crore, asserting that the banking system is capable of supporting a 15% growth rate, which is essential for maintaining the financial infrastructure as industrial and consumer demands increase. He stated, “With an estimated Rs 185 lakh crore, adding 15% is feasible for the banking system. However, it’s not solely about capital; effective processes, technology, and skilled personnel are also necessary. Banks have been investing in infrastructure and cybersecurity consistently, supported by regulatory encouragement.”
Regarding the health of Non-Banking Financial Companies (NBFCs), Chaudhry noted that the Reserve Bank of India has fostered the growth of this sector. He remarked that many NBFCs are expanding rapidly, outpacing traditional banks and serving as a vital support for credit growth. He expressed confidence in the financial system's ability to sustain the anticipated economic growth, stating, “Yes, I believe it is ready.”
The ETNow.in Business Conclave & Awards 2026 was held in the context of India's dynamic economic environment, as the nation remains one of the fastest-growing major economies globally. The focus on policy has increasingly shifted towards innovation, infrastructure enhancement, digital transformation, and sustainability, with discussions centered on how these elements can foster long-term growth across various sectors. The conclave gathered policymakers, industry leaders, investors, and entrepreneurs to discuss economic priorities, sectoral opportunities, and the policy frameworks shaping India’s growth path.