There is some evidence of a profitability effect in rural areas, but it is actually more likely to be positive than negative. 5 Thus, for most community bankers, the increased presence in their local markets of large, geographically diversified banking organizations appears not to adversely affect profitability.
The government initiatives to mitigate El Niño can push agriculture, FDI inflow associated with liberalized entry of foreign banks and their corporate investors should boost manufacturing, construction. The government has also vowed to utilize the fiscal space that is available to it and ramp up investments in infrastructure. And on the demand side, sustained growth in remittances should support domestic consumption.