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Home >Industry >Banking >How India’s banking model has changed

How India’s banking model has changed

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Over the past 24 months, banks have increased their lending to industry by just 11,945 crore, or 0.4%. In fact, industrial lending has remained flat across different sizes of industry.

  • Banks that lend majorly to industry are in the process of donning retail avatars. What are the implications?
  • The trouble is what sounds really good in theory doesn’t always work out in practice. In the last few years, the lending by banks to the corporate sector has been more or less flat.

The British economist and the father of modern macroeconomics, John Maynard Keynes, once wrote that economics “is a technique of thinking... not a body of settled conclusions". Nevertheless, economists over the years, with their envy of physics, have turned the subject into a body of settled conclusions.

One of the top settled conclusions is that when any economy shows signs of trouble, the trick is to cut interest rates and to do it fast.

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