The banking sector is considered very important for the economy. With the boom in the economy, business grows for banks as well. Due to the lockdown imposed across the country due to Corona, there was a significant reduction in business activity. This had an impact on the banks as well. However, now the banking sector is moving towards normalcy.
Analysts expect banks to do well in the coming months.
The collections of most banks have improved since June. Investor interest in banking stocks has also increased this year.
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Analysts have buy advice on IndusInd Bank, HDFC Bank, Kotak Mahindra Bank, Axis Bank and CSB Bank stocks.
The banking sector, led by the country’s largest bank State Bank of India (SBI), has grown over 21 per cent in the last six months. With the growth of the economy, the loan book of banks has also increased. The demand for housing, automobile and consumer loans is likely to increase during the festive season.
Analysts say that the performance of banks is directly related to the state of the economy. With the recovery in demand after Corona, business for banks and non-banking finance companies (NBFCs) is also expected to increase.
Banks’ recovery will also accelerate as the resolution process of debt-ridden companies goes ahead. This will reduce their Non-Performing Assets (NPA).
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