Friday, 16 September 2016

HDFC Bank is the next HDFC Bank!!

FM, Arun Jaitley has earmarked Rs 700 billion (USD 10.5 billion) in bank capital injections in the four years to March 2019.

Ratings agency Fitch estimates, however, that USD90 billion in capital will be needed for Indian banks to meet Basel III banking rules due to be fully implemented by March 2019. Fitch says that 11 Indian banks may fail to meet those norms.

With the finance minister spelling out compulsions in providing additional capital for the PSU banks, it is a matter of time that we say consolidation and increased transition from  public sector to private sector banks and NBFCs.

This provides a very large opportunity for organizations which are well capitalized and are diversified into multiple lending lines. I continue to believe businesses like HDFC Bank, Kotak Mahindra Bank, ICICI Bank, Bajaj Finance and others would do well over an extended period of time.


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