New Delhi, Jun 19 (PTI) Banking sector may face capital crunch if advances rise at a compound annual growth rate of nearly 17 per cent in next few years, industry chamber Assocham has said in a report.
The credit portfolio of banking sector is projected to expand five-fold from Rs 34.9 lakh crore in 2010 to Rs 164.1 lakh crore by 2020 at a compound annual growth rate of nearly 17 per cent, the report titled Trillion Dollar Economy -- Opportunities and Challenges for Banks -- said.
This will require scaling up of capital from Rs 4.3 lakh crore to whopping Rs 20.1 lakh crore or Rs 1.5 lakh crore annually, it said.
"But considering the implication of government ownership, banks may face 50 to 85 per cent shortfall in capital supply," it said.
This may seriously hamper the growth of banks and the economy, it added.