1. VISION 2020 IN BANKING AND
FINANCE
Presenters:
Seemoli , Pardha , Anant & Preeti

2. Mergers & Acquisitions
• More BRIC nation companies will be on the
acquiring side
• The highest volume of M&A transactions in 2020
will be seen in ‘Energy & Utilities’ sector
• Standardization of accounting policies worldwide
facilitate M&A
• Indian banks may buy stakes in banks abroad

3. Globalization
Upsurge of remote
banking
Adoption of
global standards
Walk-in-loans &
credit rating for
each customer
Technology would
be the key to
competitiveness

4. Financial Inclusion
• AADHAR will cover the entire population by 2020
• Urbanization & Predicted literacy rate close to 80%
• 600 million new customers' accounts
• Rural areas to be covered by ATMs
• More households investing in shares , debentures ,
mutual funds

5. Commodity Markets
120
Commodities Turnover
100
80
60
turnover Rs. Trillion
40
20
0
2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

6. • FIs & banks will be permitted to invest in the
commodities markets.
• Bill to grant additional authority to the FMC has been
pending enactment for several years now – it will be
passed
• It is a Futures market , by 2020 options will be
introduced
• Commodities markets to overtake capital markets

7. FDIs & FIIs
• FII inflows US$ 13 billion into Indian stocks till September 2012
• FDI inflow Rs. 734,240.48 Crores (162,305.99 US$ million)
• The Centre for Monitoring Indian Economy (CMIE) projects that FII inflows
second half of FY13 at US$ 11.2 billion
• Major FIIs like JP Morgan, Morgan Stanley and Deutsche Bank are believed
to drive the positive wave of foreign investments

8. PRIVATE EQUITY
Rs
Rs
Rs
Rs
Rs

10. Structure of Global GDP(in current US $ Trillion)
2000 2011 2016 2020 2025
World GDP 32.2 68.7 90.5 110.5 140.5
Advanced Economies 25.7 44.4 53.3 61.1 71.7
(79.7%) (64.6%) (58.9%) (55.3%) (51.1%)
Developing and Emerging 6.5 24.3 37.2 49.4 68.8
(20.3%) (35.4%) (41.1%) (44.7%) (48.9%)
of which India 0.5 1.9 3.6 5.8 10.0
(1.5%) (2.8%) (4.0%) (5.2%) (7.1%)
Industry 11th Plan 12th Plan(9.0%) 12th Plan(9.5%)
(in %) (in %) (in %)
Agriculture, Forestry & 3.2 4.0 4.2
Fishing
Construction 7.8 10.0 11.0
Financing, Insurance, Real 10.7 10.0 10.5
Estate &
Business services
Total GDP 8.2 9.0 9.5

11. Broad Macro-Economic Parameters -
Previous Plan and Targets for Twelfth Plan
•The labor force in India is expected to increase by 32 per cent over the
next 20 years
•The Interest rates may be decreased (to 8%) in order to encourage
growth
11th Plan 12th Plan 12th Plan
(Target 9.0%) (Target 9.5%)
1 Investment Rate 36.4 38.7 41.4
2 Fixed Investment 30.9 33.5 35.5
3 Savings Rate 34.0 36.2 38.9
4 Current Account Balance -2.4 -2.5 -2.5
5 WPI Inflation Rate 6.0 4.5-5.0 5.0-5.5

12. Regulatory Systems in the Indian
Financial Market
• Maintain the current conservative system of regulation
• Indian banks should conservatively trade in derivative
market, not be influenced by US,UK banks
• Should resolve problems such as increasing
population, high unemployment rate
• Should not let the debt level rise as much as
US, Europe

13. Microfinance
• Financial education
• Product range, informed by understanding client
needs
• Credit bureaus
• Client protection
• More loans available for rural india

14. Fiscal and Monetary policy
• FDI
• Investments
• Flexible Defence expenditure
• Short term loans

15. Banking Regulations
Financial Inclusion in the banking sector
The HR challenge : Re-skilling, attracting and
Challenges retaining
Automation implications
Mortgages to cross Rs 40 trillion by 2020
The number of branches to grow 2X,ATMs 5X
Investment banking to grow ten fold.
Opportunities
Infrastructure financing : Rs 20 trillion on bank
books
Wealth management : 10X growth

16. CAPITAL ACCOUNT 2020
• Planning Commission envisages Foreign Direct
Investments (FDI) to contribute 35% (21% now) to
gross capital formation.
• FII inflows to get stronger in the second half of this
fiscal.
• Plan panel sets $100 billion target for pharma sector.

17. Insurance in India in 2020
Cabinet approval of IRDA support:
Exit opportunity to
FDI cap hike to Secure Rs 40,000 promoters
49% crore
India 2020: Converge
Among top three Innovate
Insurance in India in
life insurance
markets Penetrate
2020

18. What it has in store for India?
Immediate employment potential: 10
million
30 percent mandatory procurement
preferably from MSMEs
Infrastructure development: rural
development
Technical expertise and better quality

19. Indian Pension market in 2020
• Pension sector reforms (PFRDA Bill) : Favored by
FICCI, ASSOCHAM and CII.
• Easing rules for pension and insurance funds could help secure
$1 trillion in investment up to 2017.
• FDI could raise share of pension fund assets to GDP from the
current 5% to close to 17%, meeting capital needs.

20. Land Reforms and Land Acquisition
And Rehabilitation Resettlements Bill
• Infrastructure development for GDP target of 5.5
trillion USD by 2020.: incentive to infrastructure
financing
• Bigger share of the rewards of urbanization and
industrialization to landowners.
• Balance between social and economic uses of land

21. References
• Faster, Sustainable and More Inclusive Growth (Oct 11)
• —Report of the Committee on India Vision 2020 (2002)
• —Report of The Committee on Angel Investment & Early
• Stage Venture Capital June 2012
• http://www.dnb.co.in/India2020economyoutlook/Macro_Ec
onomic_Outlook2020.asp
• www.perjacobsson.org/external/np/seminars/eng/.../fiscal/.../
heller.pdf
• www.business-standard.com/india/...regulationfinancial-
system/416450
• www.articles.economictimes.indiatimes.com
• www.mpra.ub.uni-
muenchen.de/4438/1/MPRA_paper_4438.pdf
• http://socialenterprise.georgetown.edu/events-and-
media/2011-3/the-future-of-microfinance-opportunities-
challenges-for-financial-inclusion