Retail Banking Market in India 2021

In FY 2021 scheduled commercial banks (SCBs) recorded INR 154.44 Trn deposits, expanding at a compound annual growth rate (CAGR) of 9.55% during the FY 2017 – FY 2021 period. Credit off-take of SCBs reached INR 107.94 Trn in FY 2021 from INR 79.13 Trn in FY 2017, expanding at a CAGR of 8.07% during ...

11/1/2021 | Banking, Financial and Insurance Services (BFSI)

MSME Financing Market in India 2021

The Micro, Small, and Medium Enterprise (MSME) play a pivotal role in the Indian economy. In FY 2021, the MSME industry offered employment to more than 111 million people and was the second-largest employment-generating sector in India (agriculture is the largest). The sector contributes ~29% to th...

11/1/2021 | Banking, Financial and Insurance Services (BFSI)

E-payment Solutions Market in India 2021

The digital infrastructure in the country has developed rapidly in the past few years and created a potent technological ecosystem for the digital payments market. The e-payment solutions market witnessed growth during the pandemic because of the increased penetration of the internet in the country....

11/1/2021 | Banking, Financial and Insurance Services (BFSI)

Fintech Market in India 2021

Fintech is one of the highest-growing technology segments in India, bringing innovation in various applications including loans, payments, stock trading, and credit scoring. As of 2020, India accounted for the highest fintech adoption rate (87%) and is the biggest destination for investment deals wo...

10/1/2021 | Banking, Financial and Insurance Services (BFSI)

Retail Banking Industry in India 2020

Scheduled commercial banks (SCBs) recorded INR 1,20,490.95 Bn deposits in FY 2020, expanding at compound annual growth rate (CAGR) of 3.96% during the FY 2017-FY 2020 period. Credit off-take of SCBs amounted to INR 1,37,321.69 Bn in FY 2020, expanding at a CAGR of 20.17% during the FY 2017-FY 2020 p...

44044 | Banking, Financial and Insurance Services (BFSI)

Reinsurance Market in India 2020

India is the fastest-growing reinsurance market in the world. The industry is expected to witness notable growth due to the recent regulatory changes imposed by the Insurance Regulatory and Development Authority of India (IRDAI), which encourages offshore companies to set up operations in the countr...

44013 | Banking, Financial and Insurance Services (BFSI)

Insurance Broking Market in India 2020

Market Insights: Insurance brokers are representatives of clients’ interests in insurance contracts (not insurers), and act as an intermediary between insurers and the insured. A significant number of brokers have entered the Indian insurance broking industry, since 2003, when the Insurance Regula...

44013 | Banking, Financial and Insurance Services (BFSI)

MSME Financing Market in India 2020

Micro, small and medium enterprises (MSMEs) play a pivotal role in the Indian economy. About 63.38 Mn enterprises operational in various industries have provided employment to more than 111 Mn people. The MSME sector accounts for 30% of the country’s GDP, which is likely to touch 50% in 2025. The in...

43983 | Banking, Financial and Insurance Services (BFSI)

Pension Fund Market in India 2020

The Indian pension industry is a complex and fragmented system. However, the current demographic structure makes it one of the most feasible markets for pension fund providers. The fertility rate in the country has decreased drastically from 2.50 in 2011 to 2.22 in 2018. Further, the country’s rich ...

43983 | Banking, Financial and Insurance Services (BFSI)

Gold Loan Market in India 2020

In India, gold is considered to be a sign of social status, financial security and cultural legacy. As of 2019, households in India assembled about 25,000 tons of gold, making the country the largest holder of the yellow metal in the world. Rural communities account for ~65% of the total gold demand...

43952 | Banking, Financial and Insurance Services (BFSI)

In FY 2021 scheduled commercial banks (SCBs) recorded INR 154.44 Trn deposits, expanding at a compound annual growth rate (CAGR) of 9.55% during the FY 2017 – FY 2021 period. Credit off-take of SCBs reached INR 107.94 Trn in FY 2021 from INR 79.13 Trn in FY 2017, expanding at a CAGR of 8.07% during the forecast period. The COVID-19 pandemic and economic slowdown are affected the credit off-take of SCBs in FY 2021. However, consolidation of the big banks by the government and the introduction of various economic relief packages are likely to improve the business value of the major public sector banks in the country. Various government initiatives such as increasing the number of banks’ public service units in rural areas, the Pradhan Mantri Jan Dhan Yojana program, fand ree credit and debit cards with low transaction limits, drive the retail banking sector. Major players operating in the industry include Yes Bank Limited, Axis Bank Limited, Bandhan Bank Limited, State Bank of India Limited, and HDFC Bank Limited. Market segment insights In FY 2021, in terms of deposits, public sector banks held the highest market share (~61.26%), followed by private sector banks. The contribution of public sector banks, in terms of deposits, declined by 1.12 percentage points in FY 2021, as compared to FY 2020. Private sector banks registered a rise in the number of ATMs, both off-site and on-site, while public sector banks experienced a decline. There were 57,679 off-site public sector bank ATMs in FY 2019, whereas in FY 2020, the number fell to 56,379. Among these, most ATMs are in semi-urban areas. Key growth drivers of the market • To boost India’s economic growth, the Ministry of Finance and the Reserve Bank of India took measures jointly to extend the banking network, especially among the low-income population and in rural areas. • The use of cloud-based operations has enhanced the agility of banks. The introduction of core banking solutions has led to a rise in transaction volumes since customers can operate their accounts remotely. Almost all public and private sector banks leverage data analytics and automation technology to strengthen their business operations and improve customer satisfaction. Key deterrents to the growth of the market With the popularity of internet-based banking, fraudulent activities have surged. Incidents of credit card scams, spamming, spoofing, e-money laundering, ATM fraud, phishing, identity theft, and transactions through unauthorized cheques increased in FY 2019, as compared to FY 2018. This has led to customers’ dissatisfaction and loss of trust on web-based banking. ...

11/1/2021

The Micro, Small, and Medium Enterprise (MSME) play a pivotal role in the Indian economy. In FY 2021, the MSME industry offered employment to more than 111 million people and was the second-largest employment-generating sector in India (agriculture is the largest). The sector contributes ~29% to the country's GDP, which is expected to reach 50% by 2025. The industry's financing needs depend upon the nature, size, customer segments, and stage of development. Financial institutions have limited their lending exposure to the Indian MSME industry due to the high cost of services, the small ticket size of loans, and the limited ability of MSMEs to offer immovable collaterals. In 2020, the overall credit gap in the MSME industry stood at ~INR 14.53 Trn. Debt Demand of the MSME Sector in India: The overall debt demand by MSMEs amounted to ~ INR 105.50 Trn in 2020. In 2020, the estimated addressable debt demand was INR 44.66 Trn. Approximately 47% of the debt demand is non-addressable because of the presence of sick enterprises, MSMEs with limited operational capacities, and enterprises which voluntarily exclude themselves from formal financial services, as well as other factors. Credit Supply to the MSME Sector in India: In 2020, the overall credit supply, including both the formal and informal sectors, amounted to INR 110.40 Trn. The formal and the informal sectors contribute ~22.72% and ~77.28% to the overall credit supply, respectively. Impact of COVID-19: Small businesses are the most vulnerable to unexpected crises like COVID-19 because of their size, scale of business operations, and limited financial management resources. However, the government has announced several policy measures to minimize losses. The announcement of a targeted long-term repo operation (TLTRO) of INR 500 Bn, a grant of INR 3 Tn collateral-free automatic loans, INR 200 Bn subordinated debt to stressed MSMEs, and a complete ban on global tenders for procurement of goods and services for up to INR 2 Bn are a few of the crucial policy mandates. ...

11/1/2021

The digital infrastructure in the country has developed rapidly in the past few years and created a potent technological ecosystem for the digital payments market. The e-payment solutions market witnessed growth during the pandemic because of the increased penetration of the internet in the country. In the past few years, the payment acceptance infrastructure has improved, propelling market expansion. The introduction of digital payment portals by banks such as Axis Bank Ltd., HDFC Bank Ltd., and ICICI Bank Ltd has aided the development of e-payment solutions. Integration of payment services by telecommunication firms such as Airtel, Google, and MobiKwik for online transactions also helped in the process. Market insights: In FY 2021, the market witnessed 43.71 billion transactions. It is expected to reach 649.70 billion by FY 2027, expanding at a compound annual growth rate (CAGR) of ~59.57% during the FY 2022 – FY 2027 period. The value of e-payment transactions is expected to expand at a CAGR of ~24.64% during the forecast period. Technological advancements such as internet banking and contactless payments, along with improved internet connectivity, propel e-payment methods. Integration of payment services with popular non-banking mobile applications such as WhatsApp, Apple Pay, Amazon Pay, and Ola Money have made these payment options popular among millennials. Segment insights: The market can be segmented on the basis of types of payment methods – Real Time Gross Settlement (RTGS), Retail Electronic Clearing, and Cards. RTGS acquired the highest market share in terms of value throughout FY 2021. In terms of volume, retail electronic clearing held the highest market share, followed by card payments and RTGS. The total volume of retail electronic clearing expanded at a CAGR of ~49.29% during the FY 2019 – FY 2021 period. Retail electronic clearing comprises different modes of transactions such as National Electronic Funds Transfer (NEFT), Immediate Payment Service (IMPS), and National Automated Clearing House (NACH). Cards include payment via debit and credit cards. COVID-19 impact analysis: The value of e-payment transactions decreased in 2020 due to reduced business activities and lowered the annual income of people, while the volume increased significantly. In the wake of the pandemic, the National Payments Corporation of India (NPCI) encouraged customers and providers of emergency services to adopt digital payment systems to ensure safety of contactless transactions. It launched e-RUPI, a one-time contactless, cashless voucher-based mode of payment, which helps users redeem a coupon without a card, digital payments app, or access to internet banking. Digital transactions using UPI increased by 1.8 times of what it was before COVID-19 and is exhibiting steady growth even during Q2 FY 2022. However, the market witnessed slow growth in terms of value because several major sectors such as cross-border payments, travel, and hospitality/tourism, which operate through e-payments, were affected. ...

11/1/2021

Fintech is one of the highest-growing technology segments in India, bringing innovation in various applications including loans, payments, stock trading, and credit scoring. As of 2020, India accounted for the highest fintech adoption rate (87%) and is the biggest destination for investment deals worldwide. Within the country, some of the top fintech destinations are Mumbai, Gurugram, Bengaluru, New Delhi, and Hyderabad. Mumbai and Bengaluru together represent ~42% of the fintech hub in India. Market insights: The fintech market was valued at INR 2.30 Trn in 2020. It is expected to expand at a compound annual growth rate (CAGR) of ~24.56% between 2021 and 2026 to reach ~INR 8.35 Trn by 2026. Increased penetration of the internet and smartphones, and rise in partnerships between fixed service incumbents and fintech companies propel its growth. Furthermore, funding through the Start-up India initiative, financial inclusion and enablement, tax and surcharge relaxation, and financial support to promote digital payments drive the market. Furthermore, funding support by the Indian government under the Start-up India initiative, financial inclusion and enablement, tax and surcharge relaxation, and financial support to promote the use of digital payments have also propelled the growth of the industry. Major economic interventions such as demonetization, promotion of digital payments through the Digital India, and cashless economy movements have fueled the use of fintech. However, complex regulatory and compliance laws, concerns regarding data security, and threat of cybercrime are a few of the factors that impede growth. Major players operating in the market include PhonePe Private Limited, One97 Communications Limited (Paytm), One Mobikwik System Private Limited (Mobikwik), and PolicyBazar.com. COVID-19 impact analysis: The fintech market has benefited from the pandemic. With the onset of the pandemic, the fintech sector became the forefront of the country’s financial inclusion struggle. The adoption of digital payments and lending surged. The market witnessed ~40% rise in the number of digital transactions amid the lockdown. Owing to the fear of public gathering, people started shifting from traditional financial methods to cashless and digital methods of payment. The InsurTech segment experienced significant growth as people increasingly adopted life and health insurances. The market is expected to develop substantially with the surge in digital payments other financial technology solutions ...

10/1/2021

Scheduled commercial banks (SCBs) recorded INR 1,20,490.95 Bn deposits in FY 2020, expanding at compound annual growth rate (CAGR) of 3.96% during the FY 2017-FY 2020 period. Credit off-take of SCBs amounted to INR 1,37,321.69 Bn in FY 2020, expanding at a CAGR of 20.17% during the FY 2017-FY 2020 period. The COVID-19 pandemic and the current economic slowdown in the country are expected to adversely affect the credit off-take of scheduled commercial banks in FY 2021. However, initiation of the big bank merger program by the Government of India and the introduction of various economic relief packages are likely to increase the business value of the major public sector banks in the country. Various government initiatives, such as increasing the number of banks’ public service units in rural areas, the Pradhan Mantri Jan Dhan Yojana program, free credit and debit cards with low transaction limits, and promotion of technology-based banking systems are driving the growth of the retail banking sector of India. Major players operating in the Indian retail banking industry include Yes Bank Limited, Axis Bank Limited, Bandhan Bank Limited, State Bank of India Limited, and HDFC Bank Limited. Market segment insights As of FY 2019, in terms of deposits, public sector banks held the highest market share (~68.85%), followed by private sector banks. In FY 2019, SCBs opened around 4,518 new branches in tier I cities across India, which accounts for ~46.79% of the overall new branches opened in 2019. In 2019, public sector banks had around 78,420 on-site ATMs and about 27,840 off-site ATMs across India. Among these, most public sector bank ATMs are in the semi-urban regions. Key growth drivers of the market In order to increase the penetration of services across India, SCBs have introduced facilities Such as opening zero-balance savings accounts for the low-income population group in rural areas. Government-led, bank-based pension and insurance schemes including Pradhan Mantri Suraksha Bima Yojana, Pradhan Mantri Jeevan Jyoti Bima Yojana, and Atal Pension Yojana have propelled the growth of the retail banking industry in India. Owing such customer-centric facilities, the penetration level of the banking sector in India had reached ~80% in FY 2018. The introduction of internet-based banking facilities has made transactions easier, thereby increasing the account-to-account transaction volumes across the country. Key deterrents to the growth of the market Apart from banking, the popularity of internet-based banking has made it easy for hackers to engage in fraudulent activities. Crimes related to credit card fraud, spamming, spoofing, e-money laundering, ATM fraud, phishing, identity theft, and transactions through unauthorized cheques increased in India in FY 2019 compared to FY 2018. This, in turn, has led to customers’ dissatisfaction and loss of trust on web-based banking. Companies covered Axis Bank Limited Bandhan Bank Limited Bank of Baroda Limited HDFC Bank Limited ICICI Bank Limited Indian Bank Kotak Mahindra Bank Limited Ratnakar Bank Limited State Bank of India Limited Yes Bank Limited ...

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India is the fastest-growing reinsurance market in the world. The industry is expected to witness notable growth due to the recent regulatory changes imposed by the Insurance Regulatory and Development Authority of India (IRDAI), which encourages offshore companies to set up operations in the country. Further, low insurance penetration, frequent occurrence of severe catastrophes, recent regulatory reforms pertaining to crop insurance, and the entry of numerous foreign players are expected to propel industry growth during the forecast period. The total premium generated from the reinsurance market was valued at ~INR 460.59 Bn in FY 2019 and is expected to reach ~INR 989.75 Bn by FY 2025, expanding at a CAGR of ~14.03 % during the FY 2020-FY 2025 period. Segment insights: The General Insurance Corporation (GIC) has a monopoly in the market with more than 80% stake in the Indian reinsurance business. Foreign players like AXA France Ve, Munich Re and Swiss Re have been underwriting risks for Indian insurers. They have also been gradually increasing their share in the industry since 2017. Further, in terms of operations, non-life insurance business accounted for more than 95% of the total premium ceded in FY 2019. Fire and motor insurance businesses add the highest share of the premium to the Indian reinsurance industry. Market trends: Adoption of new technologies, capital market structuring techniques, and bundling of value-added services are expected to drive the reinsurance industry in the coming years. The industry is witnessing a change in the service offerings to optimize operations and the overall business model. Further, innovative solutions such as InsurTech are expected to transform the industry value chain during the forecast period. Impact of COVID-19: Reinsurers and insurers have been severely affected by the economic repercussions in the wake of the pandemic. New insurance businesses have been postponed, existing renewals have been delayed, and industry players are scouting for new products, channels, pricing discounts, and even new regulatory compliance requirements. The impact is most significant across the casualty, property, marine, liability, and contingency classes of business. However, technology is expected to be the most noteworthy remedial measure to assess and manage the impact of the pandemic on the industry. Companies covered: • General Insurance Corporation of India (GIC) • Axa France Vie - India Reinsurance Branch • General Reinsurance AG - India Branch • Hannover Re - India Branch • Lloyd’s India • Munich Re India Services Private Limited • RGA Life Reinsurance Company of Canada – India Branch • Scor Se – India Branch • Swiss Re Services India Private Limited • XL Insurance Company SE – India Reinsurance Branch ...

44013

Market Insights: Insurance brokers are representatives of clients’ interests in insurance contracts (not insurers), and act as an intermediary between insurers and the insured. A significant number of brokers have entered the Indian insurance broking industry, since 2003, when the Insurance Regulatory and Development Authority (IRDAI) allowed brokers to act as intermediaries. As of July 2020, 468 insurance brokers have been licensed by the IRDAI. Brokers are the preferred channel of business in India as they account for more than 70% of commercial lines (marine, aviation, construction, engineering, risk, and liability insurance). Further, the dynamic and conducive regulatory landscape in the country is expected to propel industry growth in the coming years. As the Indian insurance market continues to grow organically with increasing population and insurance requirements, there remains a massive opportunity for disruption through technology. The total premium collected through brokers grew from INR 170 Bn in FY 2014 to INR 372.68 Bn in FY 2019, expanding at a CAGR of 17.00% during the 2014-2019 period Segment insights: Non-life insurance accounts for a majority share of the broking business, whereas, life-insurance forms a mere 1% of the total distribution mix. The Indian insurance industry witnessed a growing contribution from the non-life insurance channel between FY 2014 and FY 2019 due to the increased penetration of motor and healthcare businesses in the country. The large-sized and medium-sized corporates account for ~40%–50% of the customers; SME customers account for ~10%–20% and retail customers’ account for ~30%–40% of the broking business in India. Impact of COVID-19 and the way forward: The outbreak of deadly COVID-19 has increased awareness regarding insurance products (mostly health insurance products) among Indians. However, insurance renewals are getting delayed, owing to the lack of funds in the hands of policyholders. Property and casualty business, and fresh savings business have gravely hampered the market of insurance brokers in the country. Furthermore, with a substantial drop in interest rates, credit spread is rising. Hence, the credit discount rate used for calculating mathematical reserves is expected to decline, putting pressure on premiums. Therefore, the opportunity to reinvest the maturing assets will be challenging for insurance brokers in India. However, to keep policies in force, regulators can frame automatic renewal with a grace period for the payment of premium. Also, the Indian government can promote policies to ensure steady cash flow and accelerated payments of premium. Companies covered: • Aditya Birla Insurance Brokers Limited • Edelweiss Gallagher Insurance Brokers Limited • Global Insurance Brokers Private Limited • Manappuram Insurance Brokers Limited • Muthoot Risk Insurance and Broking Services Private Limited • Narnolia Financial Advisors Limited • Reliance Retail Insurance Broking Limited • Share India Insurance Brokers Private Limited • Tata Motors Insurance Broking and Advisory Services Limited • Marsh India Insurance Brokers Private Limited ...

44013

Micro, small and medium enterprises (MSMEs) play a pivotal role in the Indian economy. About 63.38 Mn enterprises operational in various industries have provided employment to more than 111 Mn people. The MSME sector accounts for 30% of the country’s GDP, which is likely to touch 50% in 2025. The industry's financing needs depend on the nature, size, customer segments and stage of development of the different businesses. Financial institutions have limited their lending exposure to the Indian MSME industry due to the high cost of service, small ticket size of loans and limited ability of MSMEs to offer immovable collaterals. As of 2019, the overall addressable demand for external credit was ~INR 41.64 Tn, while the total supply of fund stood at INR 13.54 Tn. Therefore, the credit gap in the MSME industry accounted for ~INR 28.10 Tn in 2019. Debt demand of the MSME sector in India: The consolidated debt demand (both short-term and long-term finance) by Indian MSMEs accounted for ~99.39 Tn in 2019. Microenterprise debt demand accounted for INR 13.32 Tn, small enterprise accounted for INR 24.57 Tn, and medium enterprise accounted for INR 3.75 Tn of the total debt demand in the industry. Medium and small firms being more formalized in operations are better at securing collaterals with NBFCs and banks than micro-enterprises. Credit supply to the MSME sector in India: The overall credit supply, including both the formal and the informal sectors, is worth INR 86.08 Tn. The formal and the informal sectors contribute ~INR 13.54 Tn and INR 72.54 Tn, respectively to the overall credit supply. Banking and other financial institutions account for ~INR 11.68 Tn of the overall formal finance supply to the Indian MSME industry. Credit gap in the MSME sector in India: The overall credit gap is estimated to be ~INR 28.10 Tn, which can be attributed to underserved micro and small units. Further, lack of awareness among entrepreneurs about the various loan products and lack of proper documentation have considerably reduced the supply of debt. Impact of COVID-19: Small businesses are the most vulnerable to an unexpected crisis like COVID-19 because of their size, scale of business operation and limited financial management resources. However, the government has announced several policy measures to minimize the losses. The announcement of a targeted long-term repo operation (TLTRO) of INR 500 Bn, a grant of INR 3 Tn collateral-free automatic loans, INR 200 Bn subordinated debt to stressed MSMEs, and a complete ban on global tenders for procurement of goods and services for up to INR 2 Bn are a few of the crucial policy mandates. Companies covered: • Axis Bank of India • Bajaj Finserv Limited • Central Bank of India • Federal Bank Limited • HDFC Bank Limited • ICICI Limited • Kotak Mahindra Bank Limited • State Bank of India • Union Bank of India • Utkarsh Micro Finance Bank ...

43983

The Indian pension industry is a complex and fragmented system. However, the current demographic structure makes it one of the most feasible markets for pension fund providers. The fertility rate in the country has decreased drastically from 2.50 in 2011 to 2.22 in 2018. Further, the country’s rich demographic dividend calls for a robust social security framework. The three most crucial elements of the industry are Employee Provident Fund (EPF), National Pension Scheme (NPS) and Public Provident Fund (PPF) catering to the needs of the different segments of population. The retirement fund corpus was worth ~INR 25,078 Bn in 2018 and is expected to reach INR 62,353 Bn by 2025, expanding at a compound annual growth rate of ~14.33 % during the 2020-2025 period. The Indian government is restructuring the current pension system by promoting pension coverage among informal sector workers. The collected retirement fund corpus is invested in long-term growth projects, which accelerates the pace of economic development of the country. The country’s pension industry is highly underpenetrated as ~88% of the population does not possess any social security scheme, which indicates that the market has huge growth potential. Market segment insights: The retirement fund corpus is inclusive of contributions from Employee Provident Fund and related plans, Life Insurance and Annuity schemes, Private Pension Fund, Public Provident Fund, and the National Pension Scheme. More than 40% of the current corpus is contributed by Employee Provident Fund, the most developed segment of retirement planning for the organized sector workforce. However, contributions from Life Insurance and Annuity plans are expected to grow significantly during the forecast period. With increasing financial inclusion, the market for Public Provident Fund and National Pension Scheme would expand exponentially, especially among those employed in the unorganized sector. Impact of COVID-19: The impact of the pandemic on the Indian pension fund market is likely to intensify in the long run. The government has redesigned the interest rate, which is expected to diminish private savings and pension fund assets. Further, several policy decisions to support pension fund subscribers during the crisis period are expected to add to the problem of accounting and returns for industry players. Companies covered: • HDFC Life Insurance Company Limited • Aviva Life Insurance Company India Limited • Aditya Birla Sun Life Pension Management Limited • HDFC Pension Management Company Limited • ICICI Prudential Pension Funds Management Company Limited • LIC Pension Fund Limited • Reliance Nippon Life Insurance Company Limited • SBI Pension Funds Private Limited • Tata AIA Life Insurance Company Limited • UTI Retirement Solutions Limited ...

43983

In India, gold is considered to be a sign of social status, financial security and cultural legacy. As of 2019, households in India assembled about 25,000 tons of gold, making the country the largest holder of the yellow metal in the world. Rural communities account for ~65% of the total gold demand in the country. Owing to the sentimental value that Indians associate with this indispensable item, people seldom sell it to meet financial emergencies. They prefer to pledge gold as collateral to secure short-term loans. Gold loans enjoy a relatively low interest rate that varies between 9.5% and 24%, and have a flexible tenure (ranging from a few days to 5 years). The gold loan market in India was valued at ~INR 2,921.42 Bn in 2019 and is expected to reach ~INR 6,275.40 Bn by 2025, expanding at a compound annual growth rate (CAGR) of ~12.75% during the 2020-2025 period. Segment insights: The Indian gold loan market is segmented into organized gold loan market, also known as formal gold loan market and unorganized gold loan market or the informal gold loan market. The organized gold loan segment includes public banks, private banks, small finance banks, co-operative banks, NBFCs and Nidhi companies. In contrast, the unorganized sector is dominated by money lenders and pawnbrokers. The unorganized segment accounts for more than 60% of the gold loan market in the country. Nevertheless, the organized sector is anticipated to expand exponentially during the forecast period. NBFCs constitute the largest share of the organized market. Customers residing in rural parts of the country are gradually switching to these NBFCs, owing to quick loan processing, systematic gold valuation, auctioning and safe-keeping. Banks also offer gold loans, but they primarily consider these as their priority sector lending (PSL) requirements. Further, small finance and Nidhi companies represent the co-operative segment in the Indian gold loan industry, and account for ~12.98% of the organized gold loan market. Private sector banks are gradually entering the Indian gold loan market with tech-driven offerings like online gold loan services. Impact of COVID-19: The Indian gold loan market has witnessed a positive impact on business during the nationwide lockdown due to the Coronavirus pandemic. Gold loan products have experienced rapid growth than other retail banking products during this period. Due to economic distress and job losses, gold is acting as an insurance policy, as well as a retirement plan across India. People are availing gold loans to fulfill their immediate fund requirements. Moreover, demand for gold loan is further expected to expand as risk profiles of borrowers have depreciated considerably and lenders are becoming risk-averse. Many NBFCs are facing liquidity crisis, which is deteriorating their liquidity capacity. Therefore, gold loans are becoming a fallback plan for borrowers who are denied loan through regular channels. Companies covered: • Axis Bank of India • Central Bank of India • Federal Bank Limited • HDFC Bank Limited • ICICI Limited • Kotak Mahindra Bank Limited • Manappuram Finance Limited • Muthoot Finance Limited • State Bank of India • Union Bank of India ...

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