Banking beyondbrics reader: Where do you see the banking sector in India in 10-20 years from now? DS: Though the Indian economy is bank-centric, the penetration of the banking system is smaller than in many countries including some of the Asian countries. The credit to GDP ratio is just about 55 per cent. In 20 years time, I would envisage the following scenario.
First, it applies a top-down perspective to model the impact of a stress scenario on banks and the wider economy. A top-down approach helps ensure that all banks in the system are treated impartially and consistently. This approach is necessary in macroprudential stress tests to be able to model the aggregate implications of banks’ dynamic responses to stress.