The services sector has been a great stimulus to the Indian economy accounting for 65 per cent of the gross domestic product (GDP), wherein the financial services segment has been a major contributor. The growth of the financial sector in India at present is nearly 8.5 per cent per year.
Dominated by commercial banks which have over 60 per cent share of the total assets, India’s financial sector comprises commercial banks, insurance firms, non-banking institutions, mutual funds, cooperatives and pension funds, among other financial entities.
When we talk about banking sector, India has vast potential as we are recognised as one of the world’s most vibrant capital markets. In the last decade, banking sector witnessed a tremendous upsurge in transactions through ATMs, and Internet and mobile banking. In 2014, the country’s Rs 81 trillion banking industry is set for a greater change. Through the Financial Inclusion Plan (FY 10–13), banking connectivity in the country has increased more than three-fold to 211,234 villages in 2013 from 67,694 at the beginning of the plan. India’s banking sector has the potential to become the fifth largest banking sector globally by 2020 and the third largest by 2025.
The banking sector may create up to 20 lakh new jobs in the next 5-10 years, helped by issuance of new licences and efforts being made by the RBI and the Government to expand financial services into rural areas, according to experts. According to HR services major Randstad India, banking sector will generate 7-10 lakh jobs in the coming decade and the sector would be the among top job creators in 2014.
With regard to insurance sector, India’s life insurance sector is the world’s largest with 36 crore policies. The life insurance industry in the country is forecasted to increase at a compound annual growth rate of 12–15 per cent in the next five years. The industry aims to hike penetration levels to five per cent by 2020, and has the potential to touch US$ 1 trillion over the next seven years. The total market size of the insurance sector in India was US$ 66.4 billion in FY 13. It is projected to touch US$ 350–400 billion by 2020. The life insurance premium market expanded at a CAGR of 16.6 per cent and the non-life insurance premium market also grew at a CAGR of 15.4 per cent in FY 13.
As insurance sector is growing with 20% rate, there will be a huge requirement of Insurance professionals in the country. National Skill Development Corporation has estimated the job creations of 2 Million persons in insurance and banking sector by 2021 in its latest report. The recent survey of CII estimated that there is a need of 21 lakhs insurance educated employees by 2025. ASSOCHEM Report has estimated manpower requirement to be 30 Lakhs by 2030.
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