SWOT Analysis:A.

Strengths: ‡ All these Private banks have professional, dedicated and well-trained manpower ‡ In contrast to their Public Sector counterparts, Efficiency is maintained at the highestlevel ‡ The new Private Banks have commenced with strong financials and with a clean slate i.e.without having to pursue NPAs ‡ Al mo st al l the se ba nks hav e co mpl i ed wi th Capi tal Adequ acy r e q u i r e m e n t s a n d prudential norms ‡ Most of these banks are fully computerized and techno-savvy B. Weaknesses: ‡ Both old and new private banks are operating in a limited area confined to a region ‡ Although highly networked, the number of branches is limited ‡ The employee turnover appears to be on higher side ‡ There i s di ssi mi l ari ty b et ween ol d and n e w pri vate b ank s by vi r t u e o f t h e i r a g e , functional area, products and services, etc. C. Opportunities: ‡ Being in private sector, these banks enjoy high level of autonomy facilitating them for faster decision making ‡ To face stiff competition, they can innovate new products and services and achieve highcustomer satisfaction ‡ With full computerization, they can offer cost-effective services like ATMs, ElectronicFund Transfer, etc. D. Threats: ‡ Expansion of foreign banks in the post WTO era poses severe competition ‡ D o mi n a n t P S B s w h i c h a r e r e c h a r g e d wi t h a h i g h ma r k e t s h a r e wi l l o v e r - s h a d o w t h e Private Sector Banks ‡ Frequent announcements of takeover / Mergers & Acquisitions by PSBs as well as newPrivate sector banks disturb the very functioning of old Private Sector Banks. ‡

com8. (3) Burden ± Total non-interest expenses minus totaln o n .Efficiency.com10. A n n e x u r e .ficci. . O c t o b e r 2 0 0 4 3.com9.Four factors have been considered are .Professional Banker.indianbanksassociation.www.com/investment_in_in dia/banks. B a n k i n g A n n u a l : B u s i n e s s S t a n d a r d .org/home/kbp1/pvt/income.www.CRIS INFAC BANKING ANNUAL REVIEW : AUGUST 20021 8 . both old and new Private Sector Banks willcontinue to strive to offer to their customers costeffective.Sen : Business Line. T h e Times of India. July-August 20044 .asp?q=private+banks+in+India&F N16. Efficiency is a composite of (1) Cost of Funds (CF)*.www.India¶s Best Banks ± 2004 : Banking & Finance.finance.com13. Each parameter within a Factor is ranked by givingequal weightage across all the Private Sector Banks. based on the financial and business indicators.com/library/search.RBI / GOI relaxation of FDI investment norms cause worry among the managements Conclusion: In the post-reforms era. 2003 and 2004( A n n e xu r e . D o n ¶ t B a n k o n i t : T h e R B I m u s t n ¶ t d o z e o f f o n d u t y : B i s h wa ji t B h a t t a c h a r y y a . B u s i n e s s W o r l d ± N o v e mb e r 1 5 . with a promise to maintain perfect competition and level paying field for all types of banks in the Indian Banking scenario. 2 0 0 4 5.com12.I ( a ) .financialexpress.in14.indiamart.Ministry wants RBI to review ownership norms for private sector banks : Sarbajeet K. November 06. 20046. I ( b ) .rbi.highbeam.www. efficient products and services I n c r e a s e d u s a g e o f T e c h n o l o g y . 2004) andcompared the 30 Private Sector Banks among themselves for the years 2002.www.Statistical Analysis: The authors have taken cross-sectional data on banks from the IBA Bulletin (Oct. ICFAI : October.thehindub usinessline.I I ( a ) .karvy. Financial Strength. (2) Ratio of intermediation costs to totalassets (Total Expenses/Assets) (TE/A*). 20042 .www. I I ( c ) f o r y e a r 2 0 0 3 . Each of thefactors is given an equal weightage of 25%.www.asp17.hinduonnet. III (c) for year 2004).org.html15. I I ( b ) . This is possible in view of the ³not so dominant´ presence of the foreign banks and consolidation of Public Sector Banksenvisaged by the Government of India Reference---Best Bank ± 2004´ : Business India.com11. a n d Annexure-III (a).www. 20047.www.Indian Journal of Bank Management ± ICFAI ± February. b e s t u t i l i z a t i o n o f t h e ma n p o w e r r e s o u r c e s c o u p l e d wi t h professional management adopting Corporate Governance principles these private banks willcontinue to give their best and stay in the Indian Financial System. November 08. Profitability and Size &Scale. 200422 Methodology .i n t e r e s t i n c o m e d i v i d e d b y t o t a l a s s e t s ( B * ) . August 16-29.domainb. for these Private Sector Banks. 200419. I ( c ) f o r y e a r 2 0 0 2 . III(b).www.

The authors have also done the overall ranking of four factors -Efficiency.(4) Business per Branch ( BPB).p a r a me t e r w a s g i v e n 5 % we i g h t a g e aggregating to 25%. Size & Scale and ranked the banks using the OverallPerformance. HDFC Bank. J & K Bank and Karur Vysya Bank are onthe top three positions. E f f i c i e n c y I n d u s I n d B a n k C e n t u r i o n B a n k 18 2 . the following positionemerged for the year:Table No. based on the total score obtained from four parameters(already described in the methodology). Financial Strength is a composite of (1) Capital Adequacy Ratio (CAR).parameters were given 6. They also identified the top most / bottom banks each year (2002. S i z e & S c a l e I C . (2) Operating Profits (OP). a n d ( 2 ) R e t u r n o n Assets. I C . Financial Strength.The authors have carried out Analysis of Variance (ANOVA) for each of these four parametersusing F-test as a parametric case.25% weightage aggregating to 25%. Profitability.5% weightage aggregating to 25%. Note: The parameters that are by virtue of nature ³higher is the better´ have been ranked indescending order but the other parameters (marked with *) have been ranked in ascending order.While giving the score. e a c h s u b . a n d ( 4 ) ( C r e d i t + I n v e s t m e n t ) / D e p o s i t R a t i o ( ( C + I ) / D ) . Both these sub-parameters were given 12. Profitability i s a c o mp o s i t e o f ( 1 ) S p r e a d a s P e r c e n t a g e o f A s s e t s ( S A ) . However. and (2) NPA level (net NPAs to net advances) (NPA to NA*). Both these sub-parameters were given 12. (3) NetP r o f i t s ( N P ) . these ranking numbers were taken in opposite sense without loss of generality. 2003 and 2004)using the methodology. A l l t h e s e f o u r s u b . S o . P r u r V y s y a B a n k L t d . F i n a n c i a l n k G a n e s h B a n o f i t a b i l i t y K a r I C I B a n k L t d 4 S t r e n g t h N a i n i t a l B a k o f K u r u n d w a d 3 .17 Size & Scale is a composite of (1) Aggregate Deposits (AD). and (5)Operating Profit per E m p l o y e e ( O P P E ) . 8: Outcome of Analysis for the Year 2002P a r a m e t e r B a n k a t t h e T o p p o s i t i o n B a n k a t t h e B o t t o m 1 .5% weightageaggregating to 25%. Findings: (From Annexures I/II/III: Final Charts on data for 2002-04) In the financial year ending March 2002. based on the four selected parameters.

I D B I B a n k b. it emerged at the top position.In the financial year ending March 2004. P r o f i t a b i l i t y J & K B a n k L t d G l o b a l T r u s t B a n k 4 . HDFC Bank and Karur Vysya Bank are on the top three positions. the following position emerged for the year:Table No. E f f i c i e n c y a . 10: Outcome of Analysis for the Year 2004P a r a m e t e r B a n k a t t h e T o p p o s i t i o n B a n k a t t h e B o t t o m 1 . G a n e s h B a n k o f K u r u n d w a d O v e r a l l J & K B a n k G a n e s h B a n k o f K u r u n d w a d Kotak Mahindra Finance Company was converted into a Bank in March 2003 only and data for the year will be representing its performance for one month and not full year. However. IndusInd Bank and HDFC Bank are on the top three positions. based on the total score obtained from four parameters. it was notr e c k o n e d f o r r a n k i n g p u r p o s e s e v e n t h o u g h i n t w o p a r a m e t e r s ( F i n a n c i a l S t r e n g t h a n d Profitability).J & K Bank. Hence.Hence.L t d . S i z e & S c a l e I C I C I B a n k L t d .IDBI Bank 3 . UTI Bank Ganesh Bank of Kurundwad2 . F i n a n c i a l S t r e n g t h N a i n i t a l B a n k G l o b a l T r u s t B a n k 3 . G a n e s h B a n k o f K u r u n d w a d O v e r a l l H D F C B a n k G a n e s h B a n k o f K u r u n d w a d Kotak Mahindra Bank was only a Finance Company and not existing as a Bank during the year. However. E f f i c i e n c y I n d u s I n d B a n k G a n e s h B a n k o f K u r u n d w a d 2 .J & K Bank. based on the total score obtained from four parameters. based onthe four selected parameters. F i n a n c i a l S t r e n g t h S B I C o m m e r c i a l a n d I n t e r . 9: Outcome of Analysis for the Year 2003P a r a m e t e r B a n k a t t h e T o p p o s i t i o n B a n k a t t h e B o t t o m 1 . basedon the four selected parameters. it was not reckoned for the purpose of this analysis during 2002. P r o f i t a b i l i t y K a r u r V y s y a B a n k L t d G l o b a l T r u s t B a n k 4 .National Bank Ltd. S i z e & S c a l e I C I C I B a n k L t d .In the financial year ending March 2003. G a n e s h B a n k o f K u r u n d w a d I C I B a n k . the following position emerged for the year:Table No.

O B v a e n B r k a a C n l e k l n 19 J t L u t & r d i . K o n .

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a statistical test ± ANOVA (Analysis of Variance) (Annexure ± IV) was carried out for each of the parameters including the Overall Performance. A OA N V: In addition to the analysis of data for the thirty Private Sector Banks for the three years2002. Interestingly. T h e b a n k i n g i n d e x h a s g r o w n a t a compounded annual rate of over 51 per cent since April 2001 as compared to a 27 per cent growth in the market index for the same period. SWOT Analysi Indian banks swot analysis strength Indian banks have compared favourably on growth.Global Trust Bank was deteriorating in its performance year after year during the above threeyears study. 2003 and 2004 individually. The resultsi n d i c a t e d t h a t t h e r e i s a s i g n i f i c a n t d i f f e r e n c e i n t h e a v e r a g e E f f i c i e n c y a t 5 % l e v e l . similar trend was observed in the performance of the 21 Old Private Sector Bankstested separately. OBC in the monthof July 2004. asset quality and profitability witho t h e r r e g i o n a l b a n k s o v e r t h e l a s t f e w y e a r s . It was finally asked to be merged with a Public Sector Bank viz.. ‡ .

‡ The government's regular policy for Indian bank since 1969 has paid rich dividends withthe nationalisation of 14 major private banks of India. ‡ The cost of intermediation remains high and bank penetration is limited to only a fewcustomer segments and geographies. s e r v i c e o p e r a t i o n s . restrictive labour l a w s . T h e y h a v e a combined network of over 53.2% and6. w e a k c o r p o r a t e g o v e r n a n c e a n d i n e f f e c t i v e r e g u l a t i . with the private and foreign banks holding 18. ‡ In terms of quality of assets and capital adequacy. ‡ Bank lending has been a significant driver of GDP growth and employment. ‡ Old private sector banks also have the need to fundamentally strengthen skill levels. lack of institutional support infrastructure.Policy makers have made some notable changes in policy and r e g u enhancingthe payments system and integrating regulations between commercial and co-operative banks.000 ATMs. ‡ India has 88 scheduled commercial banks (SCBs) . restrictions on capitalavailability and deployment. 29 private banks (these do not have government stake.27 public sector banks (that is withthe Government of India holding a stake)after merger of New Bank of India in Punjab National Bank in 1993. Foreign banks will have the opportunity to own up to 74 per cent of Indian private sector banks and 20 per cent of government owned banks. Indian banking system has reached even to the remote corners of the country.5% respectively. ‡ Extensive reach: the vast networking & growing number of branches & ATMs. s t r o n g a n d t r a n s p a r e n t b a l a n c e s h e e t s r e l a t i v e t o o t h e r b a n k s i n c o m p a r a b l e economies in its region. Indian banks are considered to havec l e a n . the public sector banks hold over 75 percent of totalassets of the banking industry. r i s k m a n a g e m e n t a n d t h e o v e r a l l o r g a n i s a t i o n a l performance ethic & strengthen human capital. According to a report byICRA Limited. they may b e p u b l i c l y l i s t e d a n d t r a d e d o n s t o c k e x c h a n g e s ) a n d 3 1 f o r e i g n b a n k s . WEAKNESS ‡ PSBs need to fundamentally strengthen institutional skill levels especially in sales andm a r k e t i n g . ‡ Structural weaknesses such as a fragmented industry structure. a rating agency.000 branches and 17.

a c t i v e l y a d o p t i n g a c q u i s i t i o n s a s a me a n s t o g r o w a n d r e a c h i n g t h e n e x t l e v e l o f p e r f o r ma n c e i n t h e i r service platforms.o n s b e y o n d S c h e d u l e d Commercial Banks (SCBs).they should stay in the game for potential acquisition opportunities as and when theyappear in the near term. consumers will increasingly demand enhanced institutional capabilities andservice levels from banks. consumer finance and wealth management on theretail side. ‡ Refusal to dilute stake in PSU banks: The government has refused to dilute its stake inPSU banks below 51% thus choking the headroom available to these banks for rainingequity capital. ‡ With increased interest in India. ‡ G i v e n t h e d e mo g r a p h i c s h i f t s r e s u l t i n g f r o m c h a n g e s i n a g e p r o f i l e a n d h o u s e h o l d income. ‡ reach in rural India for the private sector and foreign banks. credit and operations. unless industry utilities and service bureaus. OPPORTUNITY ‡ The market is seeing discontinuous growth driven by new products and services thatinclude opportunities in credit cards. competition from foreign banks will only intensify. These require new skills in sales & marketing. developing and retaining more leadership capacity ‡ F o r e i g n b a n k s c o m m i t t e d t o m a k i n g a p l a y i n I n d i a wi l l n e e d t o a d o p t a l t e r n a t i v e a p p r o a c h e s t o w i n t h e ³ r a c e f o r t h e c u s t o me r ´ a n d b u i l d a v a l u e . Maintaining a fundamentally long-term value-creation mindset. ‡ \banks will no longer enjoy windfall treasury gains that the decade-long secular decline ininterest rates provided. and in fee-based income and investment banking on the wholesale bankingside. W i t h t h e g r o wt h i n t h e I n d i a n e c o n o m y e x p e c t e d t o b e s t r o n g f o r q u i t e s o me t i m e . Attracting.e s p e c i a l l y i n i t s s e r v i c e s s e c t o r - . ‡ Impediments in sectoral reforms: Opposition from Left and resultant cautious approachfrom the North Block in terms of approving merger of PSU banks may hamper their growth prospects in the medium term. At the same time. This will expose the weaker banks. ‡ New private banks could reach the next level of their growth in the Indian banking sector by continuing to innovate and develop differentiated business models to profitably serves e g m e n t s l i k e t h e r u r a l / l o w i n c o m e a n d a f f l u e n t / H N I s e g m e n t s .c r e a t i n g c u s t o me r franchise in advance of regulations potentially opening up post 2009.

FII and NRI i nvest me n t l i mi t s i n t h e s e securities have been fixed at 49%. explore this route for raising cheaper funds in the overseas markets.t h e d e ma n d f o r b a n k i n g s e r v i c e s . ‡ Hybrid capital: In an atte mpt to relieve banks of th eir capital crunch. I f t h e n e w i n s t r u me n t s f i n d t a k e r s . Thisenabled banks and financial institutions. mortgages and investment services are expected to be strong. ‡ (Extra)Liberalisation of ECB norms: T h e g o v e r n me n t a l s o l i b e r a l i s e d t h e E C B n o r m s t o permit financial sector entities engaged in infrastructure funding to raise ECBs. mortgages and investment services are expected to be strong. compared to 20% foreign equity holding allowed inPSU banks. ‡ Rise in inflation figures which would lead to increase in interest rates. W i t h t h e g r o wt h i n t h e I n d i a n e c o n o m y e x p e c t e d t o b e s t r o n g f o r q u i t e s o me t i m e .e s p e c i a l l y i n i t s s e r v i c e s s e c t o r t h e d e ma n d f o r b a n k i n g s e r v i c e s . ‡ Increase in the number of foreign players would pose a threat to the PSB as well as the private players. which were earlier not permitted to raise suchfunds. THREATS ‡ Threat of stability of the system: failure of some weak banks has often threatened thestability of the system. ‡ the Reserve Bank of India (RBI) has approved a proposal from the government to amendthe Banking Regulation Act to permit banks to trade in commodities and commodityderivatives. i t wo u l d h e l p P S U b a n k s . ‡ the Reserve Bank of India (RBI) has approved a proposal from the government to amendthe Banking Regulation Act to permit banks to trade in commodities and commodityderivatives. l e f t wi t h l i ttl eheadroom for rai si ng equi ty. Si gni fi cantl y. e s p e c i a l l y r e t a i l banking. Thisenabled . e s p e c i a l l y r e t a i l banking. ‡ Liberalisation of ECB norms: T h e g o v e r n me n t a l s o l i b e r a l i s e d t h e E C B n o r m s t o permit financial sector entities engaged in infrastructure funding to raise ECBs. the RBI h a s allowed them to raise perpetual bonds and other hybrid capital securities to shore up their c a p i t a l .

‡ Hybrid capital: In an atte mpt to relieve banks of th eir capital crunch. Good. but there are different outlooks within the sector as a whole. THREATS ‡ Threat of stability of the system: failure of some weak banks has often threatened thestability of the system. Si gni fi cantl y. While the Trust and the Private banks are optimistic. Great Brand Image.. with the off-Island Retail banks displaying mixed views. However. Products have required accreditation. explore this route for raising cheaper funds in the overseas markets. i t wo u l d h e l p P S U b a n k s . the size and importance of the Savings and Clearing banks in terms of total assets and staff employed is resulting in an overall more gloomy outlook for the sector.banks and financial institutions. Swot analysis of Bank of America? the swot can be found on the below given link: http://www.Right strategy for the right products. I f t h e n e w i n s t r u me n t s f i n d t a k e r s .answers.com/SWOT/11_Banking/Bank_of_America.wikiswot.. competitors. How maany banks are private sector banks in India? There are many private banks in India. l e f t wi t h l i ttl eheadroom for rai si ng equi ty. y y y y elevant answers: What is the swot analysis of hdfc bank? Strengths : . High degree of customer satisfaction. compared to 20% foreign equity holding allowed inPSU banks. Some of them are: ICICI Bank HDFC Bank Kotak Mahindra bank Axis Bank City Union Bank Federal Bank ING Vysya Bank Etc. FII and NRI i nvest me n t l i mi t s i n t h e s e securities have been fixed at 49%.. In relation to the issues covered by the SWOT analysis below. Superior customer service vs. ‡ Rise in inflation figures which would lead to increase in interest rates. the Clearing and Savings banks are more negative. it is the size of the gap between the best estimate and pessimistic . What are the existing private sectors bank in India? Some of the top private sector banks in India are: ICICI Bank HDFC Bank Yes Bank Kotak Mahindra Bank Karur Vysya Bank etcA full list of all registered banks in India can be seen in the related links.. which were earlier not permitted to raise suchfunds. ‡ Increase in the number of foreign players would pose a threat to the PSB as well as the private players. the RBI h a s allowed them to raise perpetual bonds and other hybrid capital securities to shore up their c a p i t a l .html Read more: http://wiki.com/Q/Swot_analysis_of_private_sector_banks#ixzz1lKOOl9FA Banking Sector SWOT Analysis The balance of strengths and weaknesses identified within the Banking sector have shifted to a more negative positioning in recent years.

‡ General perception of Isle of Man as µvanilla¶ jurisdiction that is is not attractive to the up-scale clients required. ‡ Rigid legislation that inhibits business development.17 As the Region moves from primary commodity production to the export of higher value-added goods and services. ‡ Flexible work permit system and good quality staff offering personal client service. Private sector enterprises in CDB¶s BMCs need to develop brand images that can be recognised internationally and are associated with high quality. affecting the Savings Banks in particular. ‡ Anti-offshore regulations in foreign target markets restricting the development of products and new markets. ‡ µMorphing¶ of Banking and CSP propositions to create a bigger market share for all. ‡ Downsizing and reduction in banking operations in favour of rival jurisdictions. Strengths ‡ Valuable contributor to GDP over a period of 15 years and of pivotal importance to the Island¶s economy. thus investing in the ecosystem.outcomes for the sector that is most noteworthy. marketing becomes more important. Marketing 3. especially the EU. and institutions that attract such clients. the prognosis is doubly worrying. ‡ Outsourcing to cheaper jurisdictions ‡ Subsequent impact on rest of finance sector ecosystem. to shift focus from mass affluent to HNW business. This is largely due to the severity of the threat posed by ESD to large aspects of the Banking sector proposition and compounded by the market access issue. ‡ Lack of competitive differential with other offshore centres. Opportunities ‡ Unified trade body to lead finance sector programme change. ‡ High standard regulatory environment. ‡ Active and aggressive targeting of corporate & private clients. As these critical factors are largely outside the Island¶s control and banking is the largest sector of the economy. ‡ Lack of legitimate access to markets. Weaknesses ‡ Weak retail and mass affluent customer proposition. ‡ Co-ordinating business relationships across the IoM finance sector to increase revenue. There are already a . Threats ‡ ESD significantly impacts business levels.

few outstanding examples of this within the Region. Protection of these brands through appropriate trade mark registration and other intellectual property devices is of paramount importance if investment in product development is to yield maximum benefits. but enterprises require sustained assistance in developing product brands capable of penetrating international markets. .