(MENAFN- IANS) New Delhi, Aug 25 (IANS) For India to meet its Viksit Bharat targets, banking assets need to grow at 3.0–3.5 percentage points faster than its nominal GDP, a report said on Monday.

Currently, economies and their banking sector operate in a complex, multipolar world with volatile trade flows, shifting supply chains and geopolitical risks, and the combined disruption of AI/GenAI and shifting consumer expectations is unfolding at a scale never seen in the last few decades, a joint report of Boston Consulting Group, FICCI, and the Indian Bank stated.

According to the report, the Indian banking industry is poised to reach for leadership – it is profitable, well capitalised and highly valued.

"India's banks have delivered strong performance in recent years, but to truly power the Viksit Bharat mission, they must grow 3–3.5 percentage points faster than nominal GDP," said Ruchin Goyal, Managing Director and Senior Partner at BCG, and a co-author of the report.

The sector has a unique opportunity to unlock the next wave of growth by leveraging alternate data and DPI 2.0 to bring millions of new-to-credit households and MSMEs into the formal lending system, Goyal added.

At the same time, banks must move beyond incremental productivity gains and use GenAI for a step-change-rewiring core processes, redeploying capacity to higher-value activities, and setting new global benchmarks for efficiency, he said further.

India is at a critical inflexion point in its development trajectory, where the next two decades could transform today's momentum into sustained global leadership.

Realising its ambitious 'Viksit Bharat Mission' will hinge on the evolution of a robust, innovative, and resilient banking and financial sector, capable of supporting India's aspirations for sustainable, inclusive growth.

The report highlighted that banks need to move beyond credit risk and manage emerging macro risks, e.g., climate, cyber and geopolitical risks.

Shared industry utilities such as the NPCI and credit bureaus have done well to raise the standards of all participants in the financial sector, the report said.

The banking sector will benefit from creating new utilities for emerging risks like climate finance and transaction monitoring.

"For India to achieve its long-term Viksit Bharat ambitions, the corporate sector will play a key role. Banks must re-engage in corporate credit, especially in infrastructure, manufacturing, and renewables that will define the nation's future," FICCI Director General Jyoti Vyij said.

At the same time, resilience has to be embedded as a core business priority, from managing climate risk to strengthening cyber defences and operational continuity, she added.

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