Raamdeo Agrawal discusses Ayodhya tourism boost, and whether banks can derail market rally

Raamdeo Agrawal, Chairman and Co-Founder of Motilal Oswal Financial Services shared his views with CNBC-TV18 on various subjects -- from the tourism boost in Ayodhya following the inauguration of the new Ram temple, to the outlook on bank earnings and whether it has the potential to derail the market.

Agrawal highlighted the vast potential for economic growth in Ayodhya if it is strategically linked with major metro cities. He expressed optimism about the immense possibilities and potential economic benefits that such connectivity could bring to the region.

On January 22, as India celebrated the historic inauguration of the Ram Temple in Ayodhya, a recent report from Jefferies highlights the significant potential of the grand consecration ceremony to transform the location into a prominent global spiritual tourist destination, drawing an estimated 50 million visitors annually.

Speaking about the market and earnings outlook, Agrawal said there are some concerns on the banking sector where deposit growth, particularly accretion of low cost savings deposits, has slowed down. This, he said, is "because people are preferring coming to the capital markets and looking at stock market kind of options for an alternative deployment and that kind of reduces a mix of the deposits and raises the cost of the deposit. So, net interest margin (NIM) is under pressure."

However, he also noted that the loan demand is strong and banks can grow at 20% there. He is not worried that this will derail the market but it could slow down the earnings growth in the banking, financial services, and insurance (BFSI) space.

| A $10 billion makeover of Ayodhya — How Ram Mandir will unlock India’s tourism potential

Agrawal also pointed out that while demand for capital goods seems to be healthy, consumer demand is still relatively weak. However, he is hopeful that the government will announce some measures in the Budget to boost demand.

Watch | Unprecedented rush of devotees in Ayodhya as Ram Mandir opens doors for public

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