October 18, 2011

Indian banking will be the third largest in the world by 2025 just behind China and the USA, says a Boston Consulting Group report authorized by Saurabh Tripathi and Bharat Poddar. By 2025, Indian banks will have assets to the tune of $30,000 billion.

The return on equity for Indian banks at 15.3 per cent is at the median only next to China. US banks, which are the biggest in the world, earn an ROE of only 2.7 percent, arguably one of the lowest in the world.

The ROEs of Indian banks are well maintained due to lower costs and efficient management of capital. Interestingly, the best banks in the world are run by Turkey and Malaysia. But these banks don't have the size that matters to the world economy.

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