Dun & Bradstreet, through its publication ‘BFSI Sector in India’ under the D&B ‘Sectoral Round Table Conferences’ series, aims to highlight the growth and performance of the BFSI sector over the past few years. The strong performance of the domestic economy has led and showcased the growth witnessed in the Indian BFSI sector.

The publication has brought forth insightful trends, which would be of particular interest:

• The consolidated balance sheet size of SCBs has increased five fold from Rs. 11103.58 bn as at end-March 31, 2000, to Rs.52,413.30 bn as at end-March 2009. The Return on Assets (RoA)of SCBs has increased from 0.39% in FY92 to 1.02% in FY09, indicating enhanced efficiency of banks in their assets deployment

• The overall CRAR of all SCBs improved to 13.2% at end-March 2009 from 13% at end-March 2008 and 12.3% at end March 2007, indicating a relatively higher growth rate in capital funds maintained by banks than risk-weighted assets
  
  
• The gross and net NPA ratio has steadily declined since FY01, which indicates an improving quality of credit. The gross NPA ratio, which stood at 2.4% in FY09, was at over 15% in FY97



• Although the Indian banking industry has witnessed significant growth in last few years, a large proportion of the population are still financially excluded; the number of bank branches per one lakh (hundred thousand) adults being low (by global standards) at 9.4 branches
  
  
• Since last few years, NBFCs have preferred to raise their funds through bank loans/debentures as against public deposits. As a result, the ratio of public deposits of NBFCs to the aggregate deposits of SCBs fell to 0.53% as at end-March 2009 as against 0.73% as at end-March 2008



• With the significant slowdown in the Indian economy, NBFCs are encountering structural challenges such as increased refinancing risk, short-term asset-liability mismatch leading to decelerating growth and declining margins. This is expected to have a bearing on the profitability of NBFCs in the medium term



• With a strong growth in the AUM of domestic Mutual fund industry, the ratio of AUM to GDP increased gradually from 4.7% in 2001 to 8.5% in 2009. The share of mutual funds in households’ financial savings also increased to 7.7% in 2008 as against 1.3% in 2001
  
  
• The continuous process of urbanisation, enhanced financial literacy and a huge young population with an increased risk appetite are likely to be instrumental in the long term growth of the retail segment of the Mutual fund industry
  
  
• First year premium (single as well as regular) in the life insurance industry (LIC as well as private players) registered significant growth in the last eight years (FY02-FY09); from Rs 198.6 bn in FY02 to Rs 871.08 bn in FY09
  
  
• The General insurance companies have underwritten a total premium (within India only) of Rs 306 bn in FY09 as against Rs 249.8 bn in FY07. The motor segment accounted for 43.98% of the total premium under written during FY09