Strong credit demand of the manufacturing sector translated into a sharp increase in the interest income of the banking system, giving rise to unprecedented profits and healthier balance sheets during the last two years. Redeployment of these profits to augment financial services will help meet the growing economic requirements. The near term economic prospects are promising.
The continued strong pace of economic activities, and plans to launch widespread infrastructure reforms offer strong business prospects for the financial sector. Real interest rates remain at tolerable limits. Notwithstanding, there will be demand pressures in particular if the trade deficit grows out of proportion and inflationary tendencies continue to persist.