SlideShare a Scribd company logo
1 of 6
Download to read offline
India's Best Banks 2011
Bank of Baroda tops the BT-KPMG Best Banks Survey of 2011
Anand Adhikari      Edition: Nov 27, 2011

                                                     Share96

STORY TOOLS
Change font size
Print this story
E-Mail this story
Comment
RELATED
Bank of Baroda top the best banks list
IndusInd ranked best mid-sized bank
The other 9 best banks
Full list of the best banks 2011 rankings
'Banks have lot to do within the economy'
Serving rural customers good biz for banks




                                       Downgrade! Downgrade! Like a flu spreading like
IN NUMBERS                             wildfire from the US to Europe to Asia, the 'D' word is
List of Best Banks in India            sending shivers down the spines of pinstriped bankers
                                       around the world. In just over a month, the big three
global ratings agencies have set the alarm bells ringing. Standard & Poor's, or S&P,
lowered the ratings of close to a dozen Spanish financial institutions, including the country's
two biggest banks - Banco Santander and Banco Bilbao Vizcaya Argentaria. Moody's
painted Russia's banking system with a negative bias from stable, and also downgraded
Bank of America's long-term rating by two notches. And Fitch Ratings declared a negative
outlook on Italy's five largest banks.

In fact, even France-based BNP Paribas, the world's largest bank in term of assets at $2.72
trillion, joined the downgrade bash this October when S&P cut its rating by a notch. The
threat of downgrade is also looming large over marquee names such as Morgan Stanley,
Goldman Sachs and JPMorgan.


The Winners

BEST LARGE BANK
Bank of Baroda

BEST MID-SIZED BANK
IndusInd Bank

BEST SMALL BANK
JPMorgan Chase

MOST CONSISTENT LARGE BANK
Axis Bank

GROWTH, QUALITY OF ASSETS (LARGE
BANKS)
YES Bank

PRODUCTIVITY & EFFICIENCY (LARGE
BANKS)
IDBI Bank

GROWTH (MID-SIZED BANKS)
Dhanlaxmi Bank

QUALITY OF ASSETS (MID-SIZED BANKS)
Karur Vysya Bank

PRODUCTIVITY & EFFICIENCY (MID-SIZED
BANKS)
City Union Bank

PRODUCTIVITY & EFFICIENCY (SMALL
BANKS)
JPMorgan Chase

GROWTH, QUALITY OF ASSETS (SMALL
BANKS)
Mizuho Corporate Bank                                     More from Special
                                                          Videos | Pics | Features
QUALITY OF ASSETS (SMALL BANKS)                      After the subprime lending fiasco,
Bank of America                                      banks find themselves in another
                                                     quagmire - the euro debt crisis and
slowdown in credit demand. Only Chinese banks are sitting pretty - ICBC and China
Construction Bank are today the world's largest in terms of market cap - though Hong Kong
banks with high exposure to the mainland are looking more vulnerable.

In India, the country's largest bank, State Bank of India, or SBI, came under Moody's
scanner, which downgraded its perpetual bond ratings by a notch. The downgrade indicates
that India's banking sector is not in the best of health. There are growing concerns on
deteriorating asset quality, capital challenges and issues such as financial inclusion as 50
per cent of the Indian population has no banking access.

Let's take the capital challenges first. There is an estimate that Indian banks will require
more than Rs 10 trillion (one trillion equals 100,000 crore) over the next 10 years to fund
growth requirements. That's a tall order, especially for public sector banks - which control
75 per cent of the Indian banking system - where the government is a reluctant partner
when it comes to pumping in capital. In an interview with BT a few hours after announcing
the 13th interest rate hike in the past one and a half years, Reserve Bank of India, or RBI,
Governor D. Subbarao said that India, being a rapidly transforming economy, will require
more credit than it did in the past. "The capital requirements of banks are going to be more
than we would project from previous history," he said.

The government is also mulling a holding structure for PSU banks - that saves them from
diluting its stake - for allowing them to raise capital. On the asset quality front,
nonperforming assets, or NPAs, are creating a headache with gross NPA figures closing in
on Rs 1 trillion (see In Default Mode, page 84). In this challenging environment, banks have
to make efficient use of capital, write good quality assets, reward shareholders, and play an
integral role in India's economic development.

It is in this context that the 2011 edition of the Business Today-KPMG Best Banks study
was conducted. And not surprisingly, the study has thrown up some, um, surprises. Private
sector major HDFC Bank was the undisputed leader in the BT-KPMG study from 2003 to
2008, but when it pounced on Centurion Bank to acquire size, it lost out on many
performance parameters and the top slot. A public sector bank - Bank of India - rose to the
top in 2009 when the global financial meltdown affected many a bank in the country. A year
later, Axis Bank came out tops.

MUST SEE: Winners in pictures

This year, the country's fifth largest bank, Bank of Baroda, has galloped like a dark horse
to the peak. The bank's rise is made unique by the fact that it did not top in any of the 27
parameters in its group, yet emerged overall winner. Another surprise winner is the
Hindujas owned IndusInd Bank in the mid-sized category .
IndusInd's rise to the top is a shot in the arm for corporate houses eyeing the fast-growing
banking sector, including the Tatas, Reliance, Birla and Mahindra. Romesh Sobti, Managing
Director and CEO of IndusInd Bank, says: "A country's GDP funnels through the banking
system. India's growth story will require many more banks to meet its credit needs." Chanda
Kochhar, Managing Director & CEO of ICICI Bank, says India's economic fundamentals
should enable it to average eight per cent real GDP growth over the next several years. To
support this, bank credit would need to grow by about 2.5 times, or 20 per cent, annually.
This means the current non-food credit of about Rs 40 trillion will grow to about Rs 200
trillion by 2020. "This is the kind of scale we have to be ready for if banks are to play the
role they need to play in this growing economy," she says. "I believe these are conservative
estimates; we are basing this projection on India's growth in absolute terms as well as
relative to other markets."

The aspiration is not just size. It is a robust, innovative banking system: Chanda Kochhar
It is no secret that there is ample growth potential. Even as many
argue that metros and urban centres are saturated, there is a strong
view that both will remain twin tracks of future growth. Today, more
and more customers in urban and metro markets are moving toward
Internet banking, ATMs and mobile banking. "This self-directed
population is growing faster than the normal channel," says Rajiv
Sabharwal, Executive Director at ICICI Bank. But the bigger market
would undoubtedly be the hinterland or the unbanked areas, where the competition is
already building up.

Does that mean India's banks will also have to bulk up? "Size and scale are important, but
we should not forget that Indian banking has done remarkably well despite difficult global
conditions," says M.D. Mallya, Chairman of Bank of Baroda. In fact, when it comes to
transactions, SBI claims to be the biggest bank in the world. "We have 250 million accounts
and about 170 million customers," says SBI's Managing Director A. Krishna Kumar. "We
have about 40-45 million transactions daily. The peak was 52 million in March this year."
But these transaction values, when converted into dollars, remain insignificant.
We have about 40-45
                                                                                              million transactions
                                                                                              daily. The peak was
                                                                                              52 million in March: A.
                                                                                              Krishna Kumar
                                                                              But at a time
                                                                              when central
                                                                              bankers and
                                                                              governments
                                                                              around the world
                                                                              are striving to
ensure that banks don't become too big to fail, size is certainly going to take a back seat.
"The aspiration is not just size," says ICICI Bank's Kochhar. "It is a robust, innovative
banking system that effectively meets the growth needs of all segments of the Indian
economy."

Ergo, size should be seen together with growth, productivity, efficiency, quality of earnings
and capital adequacy. How well Indian banks are doing on this front is what the BT-KPMG
study captures every year. .




Classified bank :-

ndian banks can be broadly classified into public sector banks (those banks in which the Government of India holds a
stake), private banks (government doe not have a stake in these banks; they may be publicly listed and traded on
stock                     exchanges)                       and                     foreign                    banks.

Bank                                                Fixed                                                   Deposits
Bank Fixed Deposits are also known as Term Deposits. In a Fixed Deposit Account, a certain sum of money is
deposited in the bank for a specified time period with a fixed rate of interest. The rate of interest for Bank Fixed
Deposits depends on the maturity period. It is higher in case of longer maturity period. There is great flexibility in
maturity       period        and         it      ranges         from         15days         to        5       years.

Current                                                                                                  Account
Current Account is primarily meant for businessmen, firms, companies, public enterprises etc. that have numerous
daily banking transactions. Current Accounts are cheque operated accounts meant neither for the purpose of earning
interest nor for the purpose of savings but only for convenience of business hence they are non-interest bearing
accounts
Demat                                                                                                     Account
Demat refers to a dematerialised account. Demat account is just like a bank account where actual money is replaced
by shares. Just as a bank account is required if we want to save money or make cheque payments, we need to open
a        demat          account         in         order         to       buy        or         sell       shares.

Recurring                                                Bank                                              Deposits
Under a Recurring Deposit account (RD account), a specific amount is invested in bank on monthly basis for a fixed
rate of return. The deposit has a fixed tenure, at the end of which the principal sum as well as the interest earned
during            that          period           is           returned           to          the            investor.

Reserve                                  Bank                                 of                                   India
The Reserve Bank of India was established on April 1, 1935 in accordance with the provisions of the Reserve Bank of
India Act, 1934. Though initially RBI was privately owned, it was nationalized in 1949. Its central office is in Mumbai
where                  the                   Governor                   of                   RBI                    sits.

Savings                                             Bank                                                 Account
Savings Bank Accounts are meant to promote the habit of saving among the citizens while allowing them to use their
funds when required. The main advantage of Savings Bank Account is its high liquidity and safety.

Senior                    Citizen                   Saving                     Scheme                    2004
The Senior Citizen Saving Scheme 2004 had been introduced by the Government of India for the benefit of senior
citizens who have crossed the age of 60 years. However, under some circumstances the people above 55 years of
age       are      also       eligible    to      enjoy       the      benefits     of      this     scheme.

Foreign                               Banks                                 in                             India
Foreign banks have brought latest technology and latest banking practices in India. They have helped made Indian
Banking system more competitive and efficient. Government has come up with a road map for expansion of foreign
banks                                                   in                                                India.

Nationalised                                                                                               Banks
Nationalised banks dominate the banking system in India. The history of nationalised banks in India dates back to
mid-20th century, when Imperial Bank of India was nationalised (under the SBI Act of 1955) and re-christened as
State           Bank            of            India           (SBI)            in           July            1955.

Private                                   Banks                               in                              India
Initially all the banks in India were private banks, which were founded in the pre-independence era to cater to the
banking needs of the people. In 1921, three major banks i.e. Banks of Bengal, Bank of Bombay, and Bank of Madras,
merged to form Imperial Bank of India.

More Related Content

Recently uploaded

Lundin Gold March 2024 Corporate Presentation - PDAC v1.pdf
Lundin Gold March 2024 Corporate Presentation - PDAC v1.pdfLundin Gold March 2024 Corporate Presentation - PDAC v1.pdf
Lundin Gold March 2024 Corporate Presentation - PDAC v1.pdfAdnet Communications
 
ACCOUNTING FOR BUSINESS.II BRANCH ACCOUNTS NOTES
ACCOUNTING FOR BUSINESS.II BRANCH ACCOUNTS NOTESACCOUNTING FOR BUSINESS.II BRANCH ACCOUNTS NOTES
ACCOUNTING FOR BUSINESS.II BRANCH ACCOUNTS NOTESKumarJayaraman3
 
Monthly Market Risk Update: March 2024 [SlideShare]
Monthly Market Risk Update: March 2024 [SlideShare]Monthly Market Risk Update: March 2024 [SlideShare]
Monthly Market Risk Update: March 2024 [SlideShare]Commonwealth
 
ACADEMIC BANK OF CREDIT: A WORLDWIDE VIEWPOINT
ACADEMIC BANK OF CREDIT: A WORLDWIDE VIEWPOINTACADEMIC BANK OF CREDIT: A WORLDWIDE VIEWPOINT
ACADEMIC BANK OF CREDIT: A WORLDWIDE VIEWPOINTindexPub
 
The CBR Covered Bond Investor Roundtable 2024
The CBR Covered Bond Investor Roundtable 2024The CBR Covered Bond Investor Roundtable 2024
The CBR Covered Bond Investor Roundtable 2024Neil Day
 
Sarlat Advisory - Corporate Brochure - 2024
Sarlat Advisory - Corporate Brochure - 2024Sarlat Advisory - Corporate Brochure - 2024
Sarlat Advisory - Corporate Brochure - 2024Guillaume Ⓥ Sarlat
 
Solution manual for Intermediate Accounting, 11th Edition by David Spiceland...
Solution manual for  Intermediate Accounting, 11th Edition by David Spiceland...Solution manual for  Intermediate Accounting, 11th Edition by David Spiceland...
Solution manual for Intermediate Accounting, 11th Edition by David Spiceland...mwangimwangi222
 
Work and Pensions report into UK corporate DB funding
Work and Pensions report into UK corporate DB fundingWork and Pensions report into UK corporate DB funding
Work and Pensions report into UK corporate DB fundingHenry Tapper
 
CLMV-Outlook-March-2024-ENG-20240327.pdf
CLMV-Outlook-March-2024-ENG-20240327.pdfCLMV-Outlook-March-2024-ENG-20240327.pdf
CLMV-Outlook-March-2024-ENG-20240327.pdfSCBEICSCB
 
India Economic Survey Complete for the year of 2022 to 2023
India Economic Survey Complete for the year of 2022 to 2023India Economic Survey Complete for the year of 2022 to 2023
India Economic Survey Complete for the year of 2022 to 2023SkillCircle
 
MARKET FAILURE SITUATION IN THE ECONOMY.
MARKET FAILURE SITUATION IN THE ECONOMY.MARKET FAILURE SITUATION IN THE ECONOMY.
MARKET FAILURE SITUATION IN THE ECONOMY.Arifa Saeed
 
What Key Factors Should Risk Officers Consider When Using Generative AI
What Key Factors Should Risk Officers Consider When Using Generative AIWhat Key Factors Should Risk Officers Consider When Using Generative AI
What Key Factors Should Risk Officers Consider When Using Generative AI360factors
 
20240314 Calibre March 2024 Investor Presentation (FINAL).pdf
20240314 Calibre March 2024 Investor Presentation (FINAL).pdf20240314 Calibre March 2024 Investor Presentation (FINAL).pdf
20240314 Calibre March 2024 Investor Presentation (FINAL).pdfAdnet Communications
 
Contracts with Interdependent Preferences
Contracts with Interdependent PreferencesContracts with Interdependent Preferences
Contracts with Interdependent PreferencesGRAPE
 
Taipei, A Hidden Jewel in East Asia - PR Strategy for Tourism
Taipei, A Hidden Jewel in East Asia - PR Strategy for TourismTaipei, A Hidden Jewel in East Asia - PR Strategy for Tourism
Taipei, A Hidden Jewel in East Asia - PR Strategy for TourismBrian Lin
 

Recently uploaded (20)

Lundin Gold March 2024 Corporate Presentation - PDAC v1.pdf
Lundin Gold March 2024 Corporate Presentation - PDAC v1.pdfLundin Gold March 2024 Corporate Presentation - PDAC v1.pdf
Lundin Gold March 2024 Corporate Presentation - PDAC v1.pdf
 
ACCOUNTING FOR BUSINESS.II BRANCH ACCOUNTS NOTES
ACCOUNTING FOR BUSINESS.II BRANCH ACCOUNTS NOTESACCOUNTING FOR BUSINESS.II BRANCH ACCOUNTS NOTES
ACCOUNTING FOR BUSINESS.II BRANCH ACCOUNTS NOTES
 
Monthly Market Risk Update: March 2024 [SlideShare]
Monthly Market Risk Update: March 2024 [SlideShare]Monthly Market Risk Update: March 2024 [SlideShare]
Monthly Market Risk Update: March 2024 [SlideShare]
 
New Monthly Enterprises Survey. Issue 21. (01.2024) Ukrainian Business in War...
New Monthly Enterprises Survey. Issue 21. (01.2024) Ukrainian Business in War...New Monthly Enterprises Survey. Issue 21. (01.2024) Ukrainian Business in War...
New Monthly Enterprises Survey. Issue 21. (01.2024) Ukrainian Business in War...
 
ACADEMIC BANK OF CREDIT: A WORLDWIDE VIEWPOINT
ACADEMIC BANK OF CREDIT: A WORLDWIDE VIEWPOINTACADEMIC BANK OF CREDIT: A WORLDWIDE VIEWPOINT
ACADEMIC BANK OF CREDIT: A WORLDWIDE VIEWPOINT
 
The CBR Covered Bond Investor Roundtable 2024
The CBR Covered Bond Investor Roundtable 2024The CBR Covered Bond Investor Roundtable 2024
The CBR Covered Bond Investor Roundtable 2024
 
Sarlat Advisory - Corporate Brochure - 2024
Sarlat Advisory - Corporate Brochure - 2024Sarlat Advisory - Corporate Brochure - 2024
Sarlat Advisory - Corporate Brochure - 2024
 
Solution manual for Intermediate Accounting, 11th Edition by David Spiceland...
Solution manual for  Intermediate Accounting, 11th Edition by David Spiceland...Solution manual for  Intermediate Accounting, 11th Edition by David Spiceland...
Solution manual for Intermediate Accounting, 11th Edition by David Spiceland...
 
E-levy and Merchant Payment Exemption in Ghana
E-levy and Merchant Payment Exemption in GhanaE-levy and Merchant Payment Exemption in Ghana
E-levy and Merchant Payment Exemption in Ghana
 
Digital Financial Services Taxation in Africa
Digital Financial Services Taxation in AfricaDigital Financial Services Taxation in Africa
Digital Financial Services Taxation in Africa
 
Monthly Economic Monitoring of Ukraine No.230, March 2024
Monthly Economic Monitoring of Ukraine No.230, March 2024Monthly Economic Monitoring of Ukraine No.230, March 2024
Monthly Economic Monitoring of Ukraine No.230, March 2024
 
Work and Pensions report into UK corporate DB funding
Work and Pensions report into UK corporate DB fundingWork and Pensions report into UK corporate DB funding
Work and Pensions report into UK corporate DB funding
 
Mobile Money Taxes: Knowledge, Perceptions and Politics: The Case of Ghana
Mobile Money Taxes: Knowledge, Perceptions and Politics: The Case of GhanaMobile Money Taxes: Knowledge, Perceptions and Politics: The Case of Ghana
Mobile Money Taxes: Knowledge, Perceptions and Politics: The Case of Ghana
 
CLMV-Outlook-March-2024-ENG-20240327.pdf
CLMV-Outlook-March-2024-ENG-20240327.pdfCLMV-Outlook-March-2024-ENG-20240327.pdf
CLMV-Outlook-March-2024-ENG-20240327.pdf
 
India Economic Survey Complete for the year of 2022 to 2023
India Economic Survey Complete for the year of 2022 to 2023India Economic Survey Complete for the year of 2022 to 2023
India Economic Survey Complete for the year of 2022 to 2023
 
MARKET FAILURE SITUATION IN THE ECONOMY.
MARKET FAILURE SITUATION IN THE ECONOMY.MARKET FAILURE SITUATION IN THE ECONOMY.
MARKET FAILURE SITUATION IN THE ECONOMY.
 
What Key Factors Should Risk Officers Consider When Using Generative AI
What Key Factors Should Risk Officers Consider When Using Generative AIWhat Key Factors Should Risk Officers Consider When Using Generative AI
What Key Factors Should Risk Officers Consider When Using Generative AI
 
20240314 Calibre March 2024 Investor Presentation (FINAL).pdf
20240314 Calibre March 2024 Investor Presentation (FINAL).pdf20240314 Calibre March 2024 Investor Presentation (FINAL).pdf
20240314 Calibre March 2024 Investor Presentation (FINAL).pdf
 
Contracts with Interdependent Preferences
Contracts with Interdependent PreferencesContracts with Interdependent Preferences
Contracts with Interdependent Preferences
 
Taipei, A Hidden Jewel in East Asia - PR Strategy for Tourism
Taipei, A Hidden Jewel in East Asia - PR Strategy for TourismTaipei, A Hidden Jewel in East Asia - PR Strategy for Tourism
Taipei, A Hidden Jewel in East Asia - PR Strategy for Tourism
 

2011 best banks

  • 1. India's Best Banks 2011 Bank of Baroda tops the BT-KPMG Best Banks Survey of 2011 Anand Adhikari Edition: Nov 27, 2011 Share96 STORY TOOLS Change font size Print this story E-Mail this story Comment RELATED Bank of Baroda top the best banks list IndusInd ranked best mid-sized bank The other 9 best banks Full list of the best banks 2011 rankings 'Banks have lot to do within the economy' Serving rural customers good biz for banks Downgrade! Downgrade! Like a flu spreading like IN NUMBERS wildfire from the US to Europe to Asia, the 'D' word is List of Best Banks in India sending shivers down the spines of pinstriped bankers around the world. In just over a month, the big three global ratings agencies have set the alarm bells ringing. Standard & Poor's, or S&P, lowered the ratings of close to a dozen Spanish financial institutions, including the country's two biggest banks - Banco Santander and Banco Bilbao Vizcaya Argentaria. Moody's painted Russia's banking system with a negative bias from stable, and also downgraded Bank of America's long-term rating by two notches. And Fitch Ratings declared a negative outlook on Italy's five largest banks. In fact, even France-based BNP Paribas, the world's largest bank in term of assets at $2.72 trillion, joined the downgrade bash this October when S&P cut its rating by a notch. The threat of downgrade is also looming large over marquee names such as Morgan Stanley,
  • 2. Goldman Sachs and JPMorgan. The Winners BEST LARGE BANK Bank of Baroda BEST MID-SIZED BANK IndusInd Bank BEST SMALL BANK JPMorgan Chase MOST CONSISTENT LARGE BANK Axis Bank GROWTH, QUALITY OF ASSETS (LARGE BANKS) YES Bank PRODUCTIVITY & EFFICIENCY (LARGE BANKS) IDBI Bank GROWTH (MID-SIZED BANKS) Dhanlaxmi Bank QUALITY OF ASSETS (MID-SIZED BANKS) Karur Vysya Bank PRODUCTIVITY & EFFICIENCY (MID-SIZED BANKS) City Union Bank PRODUCTIVITY & EFFICIENCY (SMALL BANKS) JPMorgan Chase GROWTH, QUALITY OF ASSETS (SMALL BANKS)
  • 3. Mizuho Corporate Bank More from Special Videos | Pics | Features QUALITY OF ASSETS (SMALL BANKS) After the subprime lending fiasco, Bank of America banks find themselves in another quagmire - the euro debt crisis and slowdown in credit demand. Only Chinese banks are sitting pretty - ICBC and China Construction Bank are today the world's largest in terms of market cap - though Hong Kong banks with high exposure to the mainland are looking more vulnerable. In India, the country's largest bank, State Bank of India, or SBI, came under Moody's scanner, which downgraded its perpetual bond ratings by a notch. The downgrade indicates that India's banking sector is not in the best of health. There are growing concerns on deteriorating asset quality, capital challenges and issues such as financial inclusion as 50 per cent of the Indian population has no banking access. Let's take the capital challenges first. There is an estimate that Indian banks will require more than Rs 10 trillion (one trillion equals 100,000 crore) over the next 10 years to fund growth requirements. That's a tall order, especially for public sector banks - which control 75 per cent of the Indian banking system - where the government is a reluctant partner when it comes to pumping in capital. In an interview with BT a few hours after announcing the 13th interest rate hike in the past one and a half years, Reserve Bank of India, or RBI, Governor D. Subbarao said that India, being a rapidly transforming economy, will require more credit than it did in the past. "The capital requirements of banks are going to be more than we would project from previous history," he said. The government is also mulling a holding structure for PSU banks - that saves them from diluting its stake - for allowing them to raise capital. On the asset quality front, nonperforming assets, or NPAs, are creating a headache with gross NPA figures closing in on Rs 1 trillion (see In Default Mode, page 84). In this challenging environment, banks have to make efficient use of capital, write good quality assets, reward shareholders, and play an integral role in India's economic development. It is in this context that the 2011 edition of the Business Today-KPMG Best Banks study was conducted. And not surprisingly, the study has thrown up some, um, surprises. Private sector major HDFC Bank was the undisputed leader in the BT-KPMG study from 2003 to 2008, but when it pounced on Centurion Bank to acquire size, it lost out on many performance parameters and the top slot. A public sector bank - Bank of India - rose to the top in 2009 when the global financial meltdown affected many a bank in the country. A year later, Axis Bank came out tops. MUST SEE: Winners in pictures This year, the country's fifth largest bank, Bank of Baroda, has galloped like a dark horse to the peak. The bank's rise is made unique by the fact that it did not top in any of the 27 parameters in its group, yet emerged overall winner. Another surprise winner is the Hindujas owned IndusInd Bank in the mid-sized category .
  • 4. IndusInd's rise to the top is a shot in the arm for corporate houses eyeing the fast-growing banking sector, including the Tatas, Reliance, Birla and Mahindra. Romesh Sobti, Managing Director and CEO of IndusInd Bank, says: "A country's GDP funnels through the banking system. India's growth story will require many more banks to meet its credit needs." Chanda Kochhar, Managing Director & CEO of ICICI Bank, says India's economic fundamentals should enable it to average eight per cent real GDP growth over the next several years. To support this, bank credit would need to grow by about 2.5 times, or 20 per cent, annually. This means the current non-food credit of about Rs 40 trillion will grow to about Rs 200 trillion by 2020. "This is the kind of scale we have to be ready for if banks are to play the role they need to play in this growing economy," she says. "I believe these are conservative estimates; we are basing this projection on India's growth in absolute terms as well as relative to other markets." The aspiration is not just size. It is a robust, innovative banking system: Chanda Kochhar It is no secret that there is ample growth potential. Even as many argue that metros and urban centres are saturated, there is a strong view that both will remain twin tracks of future growth. Today, more and more customers in urban and metro markets are moving toward Internet banking, ATMs and mobile banking. "This self-directed population is growing faster than the normal channel," says Rajiv Sabharwal, Executive Director at ICICI Bank. But the bigger market would undoubtedly be the hinterland or the unbanked areas, where the competition is already building up. Does that mean India's banks will also have to bulk up? "Size and scale are important, but we should not forget that Indian banking has done remarkably well despite difficult global conditions," says M.D. Mallya, Chairman of Bank of Baroda. In fact, when it comes to transactions, SBI claims to be the biggest bank in the world. "We have 250 million accounts and about 170 million customers," says SBI's Managing Director A. Krishna Kumar. "We have about 40-45 million transactions daily. The peak was 52 million in March this year." But these transaction values, when converted into dollars, remain insignificant.
  • 5. We have about 40-45 million transactions daily. The peak was 52 million in March: A. Krishna Kumar But at a time when central bankers and governments around the world are striving to ensure that banks don't become too big to fail, size is certainly going to take a back seat. "The aspiration is not just size," says ICICI Bank's Kochhar. "It is a robust, innovative banking system that effectively meets the growth needs of all segments of the Indian economy." Ergo, size should be seen together with growth, productivity, efficiency, quality of earnings and capital adequacy. How well Indian banks are doing on this front is what the BT-KPMG study captures every year. . Classified bank :- ndian banks can be broadly classified into public sector banks (those banks in which the Government of India holds a stake), private banks (government doe not have a stake in these banks; they may be publicly listed and traded on stock exchanges) and foreign banks. Bank Fixed Deposits Bank Fixed Deposits are also known as Term Deposits. In a Fixed Deposit Account, a certain sum of money is deposited in the bank for a specified time period with a fixed rate of interest. The rate of interest for Bank Fixed Deposits depends on the maturity period. It is higher in case of longer maturity period. There is great flexibility in maturity period and it ranges from 15days to 5 years. Current Account Current Account is primarily meant for businessmen, firms, companies, public enterprises etc. that have numerous daily banking transactions. Current Accounts are cheque operated accounts meant neither for the purpose of earning interest nor for the purpose of savings but only for convenience of business hence they are non-interest bearing accounts
  • 6. Demat Account Demat refers to a dematerialised account. Demat account is just like a bank account where actual money is replaced by shares. Just as a bank account is required if we want to save money or make cheque payments, we need to open a demat account in order to buy or sell shares. Recurring Bank Deposits Under a Recurring Deposit account (RD account), a specific amount is invested in bank on monthly basis for a fixed rate of return. The deposit has a fixed tenure, at the end of which the principal sum as well as the interest earned during that period is returned to the investor. Reserve Bank of India The Reserve Bank of India was established on April 1, 1935 in accordance with the provisions of the Reserve Bank of India Act, 1934. Though initially RBI was privately owned, it was nationalized in 1949. Its central office is in Mumbai where the Governor of RBI sits. Savings Bank Account Savings Bank Accounts are meant to promote the habit of saving among the citizens while allowing them to use their funds when required. The main advantage of Savings Bank Account is its high liquidity and safety. Senior Citizen Saving Scheme 2004 The Senior Citizen Saving Scheme 2004 had been introduced by the Government of India for the benefit of senior citizens who have crossed the age of 60 years. However, under some circumstances the people above 55 years of age are also eligible to enjoy the benefits of this scheme. Foreign Banks in India Foreign banks have brought latest technology and latest banking practices in India. They have helped made Indian Banking system more competitive and efficient. Government has come up with a road map for expansion of foreign banks in India. Nationalised Banks Nationalised banks dominate the banking system in India. The history of nationalised banks in India dates back to mid-20th century, when Imperial Bank of India was nationalised (under the SBI Act of 1955) and re-christened as State Bank of India (SBI) in July 1955. Private Banks in India Initially all the banks in India were private banks, which were founded in the pre-independence era to cater to the banking needs of the people. In 1921, three major banks i.e. Banks of Bengal, Bank of Bombay, and Bank of Madras, merged to form Imperial Bank of India.