Banking sector hopes to surge despite demonetisation

The demonetisation move led by the Prime Minister Narendra Modi has many facets, even as the economists around the globe have come up with mixed arguments. However, IndusInd Bank may be indicative of a different theory all together as the Indian banking sector may be the largest gainers of the gesture. Many economists and analysts have revised the GDP targets by two per cent in Q3.

IndusInd Bank has witnessed a surge in deposits, post the note ban as the net income of the bank during this period has climbed by 29 per cent YoY in the recent Q3 results. Many analysts believed that the results of IndusInd Bank will be timid post the note ban as the lending criteria was taking a hit. 

However, the December quarter’s lending has increased by 25%, whereas the deposits have surged by 38%, which in turn has increased the net interest income by 35%. Taking  a cue, if we analyse the results of IndusInd Bank, we could easily make out a prevailing trend. Generally, the Indian banking system is closely integrated, therefore a problem of one is also of  the other.