What is the Scope of Investment Banking in the Future?

February 19, 2018

If you are keeping yourself updated with the current events these days, you would be well of few of the greatest scams that seem to have taken place in the past couple of years. The newest being the infamous Nirav Modi scam which has actually pushed a particular bank into a huge loss of thousands of crores of rupees.

Adding to this, the fact that there are more than 30% of private as well as public sector banks in the economy today which have a horde of NPAs (non-performing assets) with themselves, all of which also run into quite a loss of another few thousands of crores. With such a bleak scenario in front of us, it is but obvious to wonder about the future that the sector of investment banking.

One thing is sure, that the field of investment banking is surely confirmed to have a great scope in the future. But the prerequisite for the same is a lot of rules and regulations, which need to not just be implemented but also thoroughly followed. It is important mainly that the big guns of the industry are able to strengthen the foundation of the banks well enough in order to prevent them from being affected by anything in the future.

It was about two years ago when a President and CEO of a Federal Reserve Bank in America brought the world’s attention to the fact, it was very much important to make sure that none of the banks, ever get big enough to fail. But as we can see, especially in our present economic conditions, that there are many banks in India, that are so big that if they ever fail, there would be grave economic chaos.

There is a general consensus in the global economy, that banks are required to be put under scrutiny much more often than they are present. The governments have begun to brainstorm various schemes and initiatives which would prevent the banks from actually going bankrupt. The Financial Regulation Depositors Insurance Bill is one such bill that has been passed in the form of a radical change in order to strengthen banks well enough to not face any damage due to an impending economic slowdown.

While there are some who are trying their best to bring in and develop various mechanisms for development and strengthening of banks, there are also some who feel the need for the economy to do away with investment banks altogether. These people justify their statements by saying that such banks are only existing for the benefit of a few people and not for the whole society.

But this is not the case entirely, as the economy is growing quite in proportion to the growth of the population worldwide. In such a scenario it is important for investment banks to actually be in place and be evolved enough to serve the economy as well as the society. While there is immense scope for the investment banking sector in the future, there is also going to be a great scope for all those professionally trained and skilled individuals herein.

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