Acceleration in growth over the past few years has brightened medium-term prospects for growth of the Indian economy. As in the past, domestic savings are expected to finance the bulk of the investment requirements. In this context, the banking system will continue to be an important source of financing and there could be strong demand for bank credit.
Although bank credit has witnessed sharp growth since 2003-04 onwards, it needs to be recognised that the credit-GDP ratio still remains relatively low. Moreover, a significant segment of the population remains excluded from banking services. As the growth process strengthens and becomes more inclusive, it is expected that demand for financial products could continue to witness high growth in the coming years.