The first bank in India was Bank of Hindustan (1770) Under British Rule The banking system in India was controlled and dominated by Presidency Banks. Presidency Banks- 1. Bank of Bengal(1809) 2. Bank of Bombay(1840) Presidential Bank 3. Bank of Madras(1843) All merged in 1921 and formed Imperial Bank of India later the name changed in 1955 as State Bank of India

2.  Introduction
 Nature & Services Provided By Banks
 Banking Structure in India
 Major Market Players & Their Market Share
 Porter’s Five-Forces Model
 Analysis of Indian Banking Sector on the basis of Porter’s Five-Forces
Model

3. INTRODUCTION :
 The first bank in India was Bank of Hindustan (1770) Under British Rule
 The banking system in India was controlled and dominated by Presidency Banks.
 Presidency Banks-
1. Bank of Bengal(1809)
2. Bank of Bombay(1840) Presidential Bank
3. Bank of Madras(1843)
All merged in 1921 Imperial Bank of India Changed in 1955 State Bank of India

5. NATURE Acceptance
of Deposits
Providing
Loans &
Advances
Payments and
Withdrawals
Agency &
Utility
Services
Connecting
Link

6. Loan
• Auto Loan
• Gold Loan
• House Loan
• Credit cards
• Education Loan
Deposit
• Deposits
• Saving Accounts
• Current Accounts
• Fixed / Recurring
Other Services
• Private Banking
• Demat Services
• Mutual Fund Sales
• Foreign Exchange
Services
Commercial Banking
• Term Loan
• Guarantees
• Bill Collection
• Letter of Credit
• Working Capital
• Forex & Derivatives
Transaction Banking
• Custodian Services
• Clearing Bank Services
• Tax Collections
• Banker to Public Issues
Commodities(Inc Hedging)
Product Segment
• Equities
• Derivatives
• Capital Market
• Debt Securities
• Foreign Exchange
Other Financing
• Cash Management
• Statutory Reserve
• Financial Decisions
• Asset Liability Management
Retail Banking
1
Wholesale Banking
2
Treasury Banking
3
SERVICES

8. Central Bank (RBI)
Non Banking Finance
Companies (NBFCs)
Commercial Banks Term Financial Institutions
State Finance
Corporations (SFCs)
Indian Financial Institutions
E.g.
IFCI
NABARD
SIDBI
Public
Sector(12)
Private
Sector(21)
Foreign
Bank(45) Co-operative
Banks(31)
Regional
Rural
Banks(43)
E.g.
SBI
PNB
BOB
E.g.
HDFC Bank
AXIS Bank
ICICI Bank
E.g.
Citibank,
HSBC

9. Institution Market Share in
Loans(%)
Market
Share in
Deposits(%
)
Public Sector Banks 59.8 64.75
Private Sector Banks 36.04 30.35
Foreign Banks 4.5 4.89

10. Type of Banks Number of
Banks
Number of
Branches
Number of Branches(%)
Public Sector 12 86877 36.99
Private Sector 21 27118 11.55
Foreign Banks 45 268 0.13
Regional Rural
Bank
43 22042 9.40
Cooperative Bank 31 98545 41.93
Total 154 234850 100.0

11. Major Market Players &
Their Market Share

12. 
MAJOR PLAYERS MARKET SHARE
(Customer Based)
PUBLIC SECTOR
SBI 25 %
PNB 13%
BOB 11%
UNION BANK 8%
BANK OF INDIA 6%
CANRA BANK 4 %
PRIVATE SECTOR
ICICI 6%
HDFC 5%
AXIS BANK 3%
YES BANK 2%

15. THREAT FROM
POTENTIAL
ENTRANTS(HIG
H)
Supportive Govt.
policies
Product
differentiation is
very difficult
THREAT OF
SUBSTITUTE
PRODUCT(HIGH
)
NBFCs
Mutual fund
Govt. securities &
t-bills increasing
rapidly
BARGAINING
POWER OF
BUYER(HIGH)
• Providing
homogeneou
s kind of
services so
there is high
chance of
switching
from one
bank to
another
RIVALRY
AMONG THE
EXISTING
PLAYERS(HIGH)
Large number of
banks
Low switching
cost
High exit barriers
BARGAINING
POWER OF
SUPPLIER(LOW)
• Banks have
to meet many
regulatory
criteria made
by the RBI.

17. Porter’s five forces model determine long-term profitability & is a reality check to see if a industry is attractive enough to enter
or not. If all of the forces are high then the industry is less favorable to enter. So, before entering a industry, one should check
whether those forces is low or high.
1.Threats from new entrants or potential competitors : High
2.The power of the suppliers : Low
3.The power of the buyers/customers : High
(High competition, CRM, personal banking )
4.The intensity of competition among existing firms : High
(Zero balance, life insurance, free ATM, free credit card, door step delivery, opening new acct in 24hrs)
5. The easiness of changing to substitute products : High
As per porter's 5 forces model most of the forces scored high hence it is unfavorable to enter into the Industry.