Pestel analysis : Banking sectorPresentation Transcript
* 1. PESTEL ANALYSIS- BANKING SECTOR ABHINAV SAINI AKANKSHYA BISHWAL BIPIN KUMAR GAURAV SHARMA PANKIT MAHENDRU RISHIKA MAHESHWARI * 2. The banking system remains, as always, the most dominant segment of thefinancial sector. Indian banks continue to build on their strengths under theregulators watchful eye and hence, have emerged stronger. The banking sector in India has made significant progress in the last five years –the growth is well reflected through parameters including profitability, annual creditgrowth, and decline in non-performing assets (NPAs) Growth in the sector has been favoured by factors including low defaulterratio, strong economic growth, central bank’s regular intervention and pre-emptiveadjustment of monetary policy. The policy makers for the banking sector, which comprise the Reserve Bank ofIndia (RBI), Ministry of Finance and related government and financial sectorregulatory entities, have made several notable efforts to improve regulation in thesector * 3. WHAT IS PESTEL ANALYSIS
* 4. To what degree a government intervenes in the economy. Ex-taxpolicy, labour law, environmental law, traderestrictions, tariffs, and political stability Some of the major political factors affecting the Bankingindustry are :• Focus on regulation of government• Budget and budget measures• Foreign Direct Investment limits * 5. • Indian banking sector is least affected as compared to other developed countries- thanks to robust policy framework of RBI.• Government affects the performance of banking sector most by legislature and framing policy government through its budget affects the banking activities securitization act has given more power to banking sector against defaulting borrowers.• Stricter prudential regulations with respect to capital and liquidity gives India an advantage in terms of credibility over other countries.• To support capitalisation, the government has infused Rs 23,200 crore (US$ 5.2 billion) into state-owned banks during the last three fiscals * 6. • The move to increase Foreign Direct Investment FDI limits to 49 percent from 20 percent during the first quarter of this fiscal came as a welcome announcement to foreign players wanting to get a foot hold in the Indian Markets by investing in willing Indian partners who are starved of net worth to meet CAR norms.• Ceiling for FII investment in companies was also increased from 24.0 percent to 49.0 percent and have been included within the ambit of FDI investment • Increase Farm Credit • Subvention of 1% to be paid as incentive to farmers • Debt Waiver for Farmers • Setting up of separate task force for those not covered under the debt waiver scheme * 7. • Agriculture has been the mainstay of our economy with 60% of our populationderiving their sustenance from it.•In the recent past, the sector has recorded a growth of about 4% per annum withsubstantial increase in plan allocations and capital formation in the sector with help ofbanking assistance.•The one-time bank loan waiver of nearly Rs 71,000 crore to cover an estimated 40 million farmers was one of the major highlights * 8. •Every year RBI declares its 6 monthly policies and accordingly the variousmeasures and rates are implemented which has an impact on the bankingsector.•The Economic measures affects the banking sector to boost the economy by giving certain concessions or facilities. If in the savings are encouraged, thenmore deposits will be attracted towards the banks and inturn they can lendmore money to the agricultural sector and industrialsector, therefore, booming the economy.•If the FDI limits are relaxed, then more FDI are brought in India through banking channels * 9. Key July Sept OctEvery year RBI declares its 6 monthly Rate 26th 16th 25thpolicies and accordingly the various smeasures and rates are implemented whichhas an impact on the banking CRR 6.oo 6.00 6.00sector.In past 24 months RBI has...
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