Growth opportunities in the banking system are phenomenal: Keki Mistry
Keki Mistry, Former VC & CEO, HDFC, says “there is a massive potential to grow, not just for mortgages, but for every single financial service product. If you look at retail credit to GDP in India, we are at around 18%. If you look at credit card penetration in India, it is extremely low by global standards. So whichever way, whichever product you look at, the growth opportunities in the banking system are phenomenal.”
Banking is a bit of a cyclical business, where do you think we are in this cycle? Are we past the peak or at least very close to the peak? What is your analysis?
Keki Mistry: I do not think we are anywhere even remotely close to the peak. The growth opportunities which are there for the economy as a whole and the banking sector is obviously part of the economy is phenomenal. I do not think any country in the world today has the potential to grow the way India has the potential to grow. We have demonstrated that consecutively year after year.
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The penetration level of any kind of financial product in India is amongst the lowest in the world, amongst the lowest, if not the lowest. For example, mortgages today are about 11% of GDP. You compare that with an economy like the US or UK or any of the European countries, they are all well over 40%. Some are 50%, some are 60%, some are 70%, India is only 11%. Even some of the emerging markets are in the 20s. By comparison, we are very underpenetrated.
India has a young population, two thirds of our population is
