Mumbai: India's financial services industry may grow 20 per cent annually over the next few years, driven by the world's second-fastest pace of economic growth, the Aditya Birla Group said.
Financial planning, wealth management, infrastructure financing and services for Indians investing overseas may lead the expansion, said Mumbai-based Ajay Srinivasan, chief executive officer of the company's financial services division.
"The economy will double over the next eight to nine years if it grows between 8 and 9 per cent annually," he said. Savings, which account for about 30 per cent of India's $1 trillion (Dh3.67 trillion) economy, will increase at a similar pace, he forecast. "The pie is huge and we are casting our net."
About 60 per cent of the India's population doesn't have a bank account and nearly 90 per cent don't get loans, K.C. Chakrabarty, deputy governor of the central bank, said last month.
Equity-related investments form 10 per cent of savings, compared to 22 per cent in China and about 40 per cent in developed nations, according to Vikram Kotak, chief investment officer at Birla Sun Life Insurance Co.
India's finance, insurance and real estate sectors expanded 7.9 per cent in the quarter ended March 31, according to the Central Statistics Office. The nation plans to spend $1.7 trillion on infrastructure over 10 years, Trade Minister Anand Sharma said yesterday.
Srinivasan, who joined the company in 2007 from Prudential, said he will focus on building the group's non-banking-financial-services business and may look at areas including microfinance, institutional broking, investment banking and infrastructure financing.
Srinivasan's unit, which generates $1.3 billion in revenue, has added retail broking and private equity to the existing asset management, insurance and distribution businesses. It is currently raising money for a domestic real estate fund.
