UNITED NEWS INTERNATIONAL (UNI) – India’s state banks are in crisis, but according to financial experts, the country’s private sector banks could benefit from the situation.
According to a July 3 CNBC report, private sector banks are likely to gain more market share then state banks because they have stronger balance sheets, are less exposed to stressed sectors and are more competitive.
Sukumar Rajah, senior managing director at Franklin Templeton Investments, told CNBC, he thinks the market share for private sector banks will rise from 30 percent to 60 percent over the next ten years.
Indian state banks are in billions of dollars worth of debt, but according to Rajah, the overall health of the banking system will improve because the “better banks” will grow bigger and the “weaker banks” will become smaller.
Also, according to Bloomberg, state banks are focusing on resolving their problems at the moment, instead of growing their balance sheets.