Banks' profitability is likely to come under pressure in the coming year in the light of the uncertainty in the interest rate movement.After more than a decade of liberalization and globalization, the economic situation in the country appears to be as lopsided as ever. The economy has moved up to an appreciably higher growth trajectory of an average annual growth of 6-7% but the spread effect of the growth continues to be skewed. There is unbound prosperity in some areas and untold misery in others.

The increase in the GDP has not been creating as many jobs as anticipated. Urbanization is running far ahead of urban employment. Income differentials seem to have sharpened both within and between various sectors. There is food surplus, but vast chunks of rural populace are deprived of food security. On the external front, we seem to be importing inflation rather than exporting surplus goods and services. The most disquieting aspect, by far, is that the growth of the infrastructure sector, on which depends the acceleration of our economic growth to the required 9-10% per annum, is still lagging far beyond.

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