BFSI sector stable amid global uncertainty, says ex-HDFC chief Deepak Parekh
Synopsis
Veteran banker Deepak Parekh, speaking at the CII BFSI Summit 2026, delivered a calm verdict on India's financial sector: largely stable, with no major stress — even as hotels, airlines, and logistics absorb global shocks. His remarks on REITs, SIP-driven savings, and AI's rising role sketch a sector quietly reshaping itself from within.
Key Takeaways
Deepak Parekh said India's BFSI sector faces no major impact from global uncertainty, though mild loan application slowdown is possible.
Sectors like aviation , hospitality , and logistics are more directly exposed to external shocks, with hotel occupancy already declining.
RBI has affirmed that HDFC Bank is strong, well-capitalised, and faces no ethical issues.
REITs are gaining traction in India as developers seek to sell and institutional investors bundle assets.
SIP inflows into mutual funds are slowing bank deposit growth but strengthening domestic savings and reducing reliance on foreign portfolio flows.
AI and technology are expected to play an increasing role in the BFSI sector's next phase of growth.
India's banking, financial services and insurance (BFSI) sector remains largely insulated from global economic turbulence, even as sectors such as hospitality, aviation, and logistics face more direct headwinds, Deepak Parekh, former Chairman of HDFC Ltd (which merged into HDFC Bank Ltd in June 2023), said on Tuesday, 5 May 2026. Speaking on the sidelines of the 2nd Edition CII BFSI Summit 2026 in New Delhi, Parekh told media that there is no major cause of concern for the sector at present, though a mild softening in new loan applications is possible given subdued market sentiment.
BFSI Resilience: What Parekh Said
Parekh was measured but reassuring in his assessment.
Point of View
And sentiment is weak. The more structurally interesting signal is the SIP-versus-deposits dynamic: retail money migrating to mutual funds is quietly eroding the cheap deposit base that banks have long relied upon. If that trend accelerates alongside global risk-off, the BFSI sector's resilience narrative will face a sterner test than Parekh's measured optimism currently allows for.
NationPress
9 May 2026
Frequently Asked Questions
What did Deepak Parekh say about India's BFSI sector at the CII Summit 2026?
Deepak Parekh said India's BFSI sector faces no major impact from global economic uncertainty, though there may be a mild slowdown in new loan applications due to weak market sentiment. He made these remarks on the sidelines of the 2nd Edition CII BFSI Summit 2026 in New Delhi on 5 May 2026.
Which sectors did Parekh say are more vulnerable to global uncertainty?
Parekh identified aviation, hospitality, logistics, crude oil, and inflation-linked industries as more directly exposed to global shocks. He noted that hotel occupancy levels are already declining due to reduced travel sentiment.
What did Parekh say about HDFC Bank's leadership and governance concerns?
Parekh clarified that he is no longer associated with HDFC Bank and is not on its board, and therefore declined to comment on specific leadership matters. He did note that the Reserve Bank of India has affirmed the bank is strong, well-capitalised, and faces no ethical issues.
How are REITs and SIPs changing India's financial landscape according to Parekh?
Parekh said Real Estate Investment Trusts (REITs) are bridging the gap between developers who want to sell and users who want to rent, offering returns and capital appreciation. On the savings side, he noted that SIP inflows into mutual funds are growing rapidly, slowing bank deposit growth but strengthening domestic savings and reducing dependence on foreign portfolio investor flows.
What role does Parekh see for AI in the BFSI sector?
Parekh said artificial intelligence and technology will play an increasing role in the BFSI sector's next phase of growth, alongside rising foreign and domestic investment in financial services.
