The Indian Banks' Association has projected the 'big picture' for the Indian banking sector.

As per the macro indicators visualised by the association, the sector's total balance sheet size has been estimated to more than double to Rs 40,90,000 crore (Rs 40,900 billion) by 2010 from the March-end 2003 level of Rs 16,99,000 crore (Rs 16,990 billion).

Here it may be pertinent to note that between 1995 and 2003, the banking sector's total balance sheet size had increased more than three times to Rs 16,99,000 crore.

The association's 'Vision Report on Banking Industry' has worked out the growth figures on the premise that India's gross domestic product (at current market) in 2009-2010 will expand by 2.68 times to Rs 61,40,000 crore (Rs 61,400 billion) from GDP (at current market price in 2001-02) level of Rs 22,88,281 crore (Rs 22,882.81 billion).

Capital of the scheduled banks is seen growing (at a compounded annual growth rate of 6.86 per cent) to Rs 35,000 crore (Rs 350 billion) by 2010 from the 2003 level of Rs 22,000 crore (Rs 220 billion).

In this regard, the IBA pointed out that pressure on capital structure is expected to trigger a phase of consolidation in the sector.

"Merger between public sector banks or public sector banks and private sector banks will happen as market players will consolidate their position to remain in competition. Opening up of the financial sector from 2005, under WTO, will see a number of global banks taking large stakes and control banking entities in India," the report said.

Reserves & surplus of these banks have been estimated to burgeon at a CAGR of 17.14 per cent to Rs 2,30,000 crore (Rs 2,300 billion) as against the March-end 2003 level of Rs 76,000 crore (Rs 760 billion).

Currently, the scheduled banking structure in India includes 27 public sector banks, 30 private sector banks, 36 foreign banks, 196 regional rural banks, 57 scheduled urban co-operative banks, and 16 scheduled state co-operative banks.

Deposits are estimated to grow at a CAGR of 14.51 per cent to Rs 35,00,000 crore (Rs 35,000 billion) by 2010 as against Rs 13,56,000 crore (Rs 13,560 billion) in 2003.

Banks' borrowings, which grew at a CAGR of 23.57 per cent between 1995 to 2003, are seen increasing at a slower clip (CAGR : 4.70 per cent). From the 2003 level of Rs 87,000 crore (Rs 870 billion), the borrowings are projected to increase to Rs 1,20,000 crore (Rs 1,200 billion) by 2010 level. This broadly indicates that banks will have ample liquidity.

Other liabilities & provisions will grow at a CAGR of 3.79 per cent between 2003 and 2010. From Rs 1,58,000 crore (Rs 1,580 billion) as of 2003, the other provisions and contingencies will rise to Rs 2,05,000 crore (Rs 2,050 billion) by 2010.

On the assets side, the banks' loans & advances are projected to increase at a CAGR of 14.42 per cent to Rs 19,00,000 crore (Rs 19,000 billion) as against Rs 7,40,000 crore (Rs 7,400 billion) in 2003.

Investments are projected to increase at a CAGR of 13.07 per cent to Rs 16,40,000 crore (Rs 16,400 billion) as against Rs 6,94,000 crore (Rs 6,940 billion) in 2003.

Balances with banks and money at call & short notice are expected to grow at a CAGR of 16.99 per cent to Rs 3,00,000 crore (Rs 3,000 billion) from the 2003 figure of Rs 75,000 crore (Rs 750 billion).

Fixed assets and other assets are projected to grow to Rs 50,000 crore (Rs 500 billion) and Rs 1,50,000 crore (Rs 1,500 billion) from the 2003 level of Rs 20,000 crore (Rs 200 billion) and Rs 84,000 crore (Rs 840 billion), respectively.