The Indian banking industry, unlike its peers in the West, came out relatively unhurt from the global financial crisis. The stocks, however, did correct a bit on the concerns of rising non-performing assets (NPAs) and loan restructuring.
But, with the fear subsiding and the economy getting back to the higher growth path, there is renewed interest in the sector. The reasoning behind this is, if India has to grow at over 8-9 %, companies will need funds for expansion. In the absence of a vibrant bond market, they will have to tap banking sources for funding their needs. Also there is a huge need of Housing & Infrastructure development.
Therefore, investors are looking at this sector as a proxy to the India growth story. So, if you are also eyeing gains from the India growth story through the banking sector, we tell you how to look at stocks in the banking sector, and profile five banks we like at this stage.
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