Financial Institutions – On a growth path - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Financial Institutions – On a growth path

Jun 3, 2000

The financial sector in India is on a growth path with the liberalization of economy. The domestic financial institutions (FIs) are capitalising on opportunities thrown up by the new economy. Also the business environment has witnessed a significant change over the last several years. The leading FIs are aggressively transforming themselves to Universal Banks, providing all kinds of financial services. During the past ten months the sanctions of all All India Financial Institutions (AIFIs) increased by 16% to Rs 786 bn while the disbursements increased at a slower pace by 13% to Rs 461 bn. Among the FIs, ICICI’s sanctions and disbursements increased at a faster rate than the industry growth rate. The reason behind ICICI’s higher growth rate is diversification into the retail product segment and excellent services provided by it. Though IDBI is also on a growth path, IFCI is still lagging behind due to high level of its non-performing assets (NPAs).

Comparative disbursements and approvals

Particulars Disbursements (Rs bn) Approvals (Rs bn)
  April 98
- Jan 99
April 99
- Jan 00
% change April 98
- Jan 99
April 99
- Jan 00
% change
ICICI 153.5 183.0 19.2% 292.3 357.8 22.4%
IDBI 105.0 115.0 9.5% 191.2 208.4 9.0%
IFCI 38.3 22.2 -42.1% 45.5 19.5 -57.2%
AIFI 409.8 461.2 12.5% 677.0 786.0 16.1%

There exist a huge gap between the amount of loan approved and actual disbursement. This gap could narrow down towards the end of the year and there might be an increase in loan disbursement with the economy gaining momentum.


Although on a year over year basis, the table depicts the recovery in the sanctions and disbursements of FIs, the actual picture reveals that on a month over month basis there’s only a marginal recovery. This could be attributed to the prolonged period of uncertainty during FY00 – the toppling of the government in April 1999, eruption of fighting in Kargil in May and the general elections in September – October. This affected investment activity and consequently reduced the demand for funds from FIs. However, the current year is anticipated to be much better as investment activity has been picking up.

Equitymaster requests your view! Post a comment on "Financial Institutions – On a growth path". Click here!

  

More Views on News

CANFIN HOMES Share Price Down by 8%; BSE 500 Index Down 3.0% (Market Updates)

Apr 12, 2021 | Updated on Apr 12, 2021

CANFIN HOMES share price is trading down by 8% and its current market price is Rs 548. The BSE 500 is down by 3.0%. The top gainers in the BSE 500 Index are GSK CONSUMER (up 5.1%) and LAKSHMI VILAS BANK (up 4.8%). The top losers are CANFIN HOMES (down 7.5%) and BAJAJ FINANCE (down 5.3%).

INDIABULLS HOU. FIN. Share Price Down by 7%; BSE 500 Index Down 3.0% (Market Updates)

Apr 12, 2021 | Updated on Apr 12, 2021

INDIABULLS HOU. FIN. share price is trading down by 7% and its current market price is Rs 187. The BSE 500 is down by 3.0%. The top gainers in the BSE 500 Index are GSK CONSUMER (up 5.1%) and LAKSHMI VILAS BANK (up 4.8%). The top losers are INDIABULLS HOU. FIN. (down 7.1%) and BAJAJ FINANCE (down 5.3%).

SHRIRAM TRANSPORT Share Price Down by 8%; BSE 500 Index Down 3.2% (Market Updates)

Apr 12, 2021 | Updated on Apr 12, 2021

SHRIRAM TRANSPORT share price is trading down by 8% and its current market price is Rs 1,412. The BSE 500 is down by 3.2%. The top gainers in the BSE 500 Index are GSK CONSUMER (up 5.1%) and JUBILANT PHARMOVA (up 5.0%). The top losers are SHRIRAM TRANSPORT (down 8.0%) and BAJAJ FINANCE (down 6.4%).

Indian Railway Finance Corporation IPO: Should You Apply? (IPO)

Jan 18, 2021

Monopolistic railway financer with impeccable asset quality.

CAMS IPO: Should You Apply? (IPO)

Sep 18, 2020

Does the company having 70% market share of the mutual fund registrar business have sound prospects?

More Views on News

Most Popular

A Critical Update on the Market (Fast Profits Daily)

Mar 30, 2021

In this video, I'll tell you why I am recommending caution in the market at this time.

My Recent Recommendation Will Profit from the Global Supply Chain Crisis (Profit Hunter)

Mar 31, 2021

A tiny chemical company, started in the Licence Raj era, is a great example of a new wealth creating opportunity.

My Stock Trading Strategy (Fast Profits Daily)

Mar 31, 2021

In this video I'll show you exactly how I go about picking stocks for trading.

What You Need to Find Hundred Baggers (Profit Hunter)

Mar 30, 2021

100 baggers of the last decade share this common trait. Here's how to use it to nail future multibaggers.

More

India's #1 Trader
Reveals His Secrets

Secret To Increasing Your Trading Profits Today
Get this Special Report,
The Secret to Increasing Your Trading Profits Today, Now!
We will never sell or rent your email id.
Please read our Terms

5-YR ANALYSIS

COMPARE COMPANY

MARKET STATS