BANKING

SECTOR

Hiteshwar Marhariya
(14810020)
Dhrubajyoti Das (14810019)
Devpreet Singh(14810018)
Debjyoti Das(14810017)

INDIAN BANKING SECTOR

BANKING IN INDIA
Originated in last decades of 18th century.
Among the first banks were the Bank of

Hindustan & General Bank of India.

State Bank of India is the largest and oldest
bank which is still in existence.
BANK OF
CALCUTTA(1806)
BANK OF
BENGAL(1809)
STATE BANK OF
INDIA

BANK OF BENGAL

BANK OF BOMBAY

BANK OF
MADRAS

IMPERIAL BANK
OF INDIA (1921)
STATE BANK OF
INDIA
(1955)

In 1960, State Bank of India was given control of

eight-state associated banks.

In 1969, Indian government nationalized 14 major
private banks.
In 1980, 6 more private banks were nationalized.

EVOLUTION OF THE INDIAN

BANKING SECTOR

Segmentation

Bank deposits(USD billion)

1600
1400

882

997

122
4

133
6

136
0

1200
1000
Foreign Banks
Private Banks
Public Banks

800
600
400
200
0

FY09

FY10

FY11

FY12

FY13

Total Asset(USD trillion)

1.4
1.2
1
0.8

Public Banks
Private Banks
Foreign Banks

0.6
0.4
0.2
0

FY09

FY10

FY11

FY12

FY13

Key Trends
Rising focus on mobile banking

Shift to fee-based business model

Adaptation of digital technology

Focus on emerging sectors and rural market

Key growth engine

Economics and demographics

Financial inclusion

Infrastructure and development

MSME sectors

Key growth inhibitors

Low banking penetration

Increasing NPAs and restructured asset

Leadership vacuum in PSBs.

Public Sector Banks

Market capitaization(in Rs '000 Cr)
SBI
Bank of baroda
PNB

Net profit (Rs '000 Cr)

213

SBI

38

BANK OF BARODA

29

PNB

10.89
4.54
3.34

Canra bank 18

BANK OF INDIA

2.72

central bank 15

CANRA BANK

2.43

Employees(in '000)
SBI
PNB

228.3
63.3

Bank of Baroda

43.1

Canara Bank

42.7

Central bank ofindia

37.1

Private sector Banks

Market capitaization(in Rs '000Cr )
HDFC Bank

264

ICICI Bank

192

Axis Bank

IndusInd Bank

ICICI BANK

9.81

HDFC BANK

138

Kotak Mahindra

Net Profit(in Rs '000Cr)

8.41

AXIS BANK

106
47

6.21

YES BANK LTD.

1.69

UCO BANK

1.61

Employees (in '000)

HDFC Bank

69.4

ICICI Bank

62.1

Axis Bank
Kotak Mahindra
Indulnd Bank

37.9
13.6
11.5

Regulatory Framework
Exposure Limits
Lending to a single borrower is limited to 15% of the banks

capital funds.
For group borrowers, lending is limited to 30% of the banks
capital funds.
Cash Reserve Ratio (CRR) and Statutory Liquidity
Ratio (SLR)
Cash Reserve Ratio (CRR)4.00%
Statutory Liquidity Ratio (SLR)21.50%
Priority Sector Lending
Domestic banks are required to tender 40% of their
advances towards priority sector
the limit for foreign banks is at 32% of their total advances

 New Bank Licence Norms

Successful track record of at least 10 years of operating through a

non-operative financial holding company (NOFHC) wholly owned

by the promoters.
The shares have to be listed within 3 years of the start of the
banks operations.
The foreign shareholding is limited to 49% for the first 5 years
Comply with the priority sector lending targets .
25% of the branches should be opened in
previouslyunbankedrural areas.
Provisioning
For substandard assets
provision of 15% of the outstanding loan amount for secured loans
25% of the outstanding loan amount for unsecured loans .
For doubtful assets
provisioning for the secured part of the loan 25% of the
outstanding loan for NPAs in existence for less than one year
40% for NPAs in existence between one and three years
100% for NPAs with a duration of more than three years

 FDI Limit
In private banks limit is 74%.
In Public sector Banks limit is 20%.
Basel III Norms
To be implemented by January 2019.
Focus on Market descipline.
Improve risk management and governance

Financial Inclusion
Pradhan Mantri Jan Dhan Yojna

Key point in budget 2015 for banking sector

Capital infusion worth Rs. 7940 crore in

public sector banks based on performance.

With no capital from the

government,private banksare expected to

garner further market share as demand for
credit picks up

Future Prospect
Forecasted GDP during 2012-17: USD 2,735

billion
Strong GDP growth will facilitate banking sector
expansion
Total banking sector credit is expected to
increase at a CAGR of 18.1 per cent to USD2.4
trillion by 2017

Thank You