Indian Banking Industry Overview - 2013
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BANKING INDUSTRY IN INDIA
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Introduction: Evolution of Indian banking industry
Pre - independence
Post independence
The 21st Century banking
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1 • 1870 - Bank of Hindustan
2 • 1934 - RBI Act
3 • 1949 - Banking Regulations Act
4 • 1955 - Formation of SBI
5 • 1969 - Nationalisation of 20 banks
6 • 1980 - Nationalisation of 6 banks
7 • 1993 - Liberalization and entry of private sector
8 • 1995 - 2000 - Electronic funds transfer
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Indian Banking –The engine for sustaining India’s growth
agenda
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Public sector banks
Private sector banks
Foreign banks
Co-operative banks
RBI
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Top five Private Sector Banks
ICICI Bank
HDFC Bank
Axis Bank
Yes Bank
KotakMahindra bank
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Top five Public Sector Banks
SBI
Punjab National Bank
Bank of Baroda
IDBI Bank
Syndicate Bank
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Financial products of banks
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Market Capitalisation
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Who regulates the financial sector in India?
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Banking Amendment bill,2012
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Changing Industry Dynamics by new rules
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Impact of Changing repo rate by RBI
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Growth drivers of Indian banking industry
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Pest Analysis of banking industry
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Porter’s five forces model:
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Factors that affect the profitability
• Non Performing Assets(NPA)
• Net Interest Margin (NIM)
• Business & Profit per employee
• Cost per transaction
• Utilization of technology and human resources
• Base rate, MSF, repo rate, CRR and SLR
• Basel norms – II and III
• Operational cost
• Customer Acquisition
• Allied banking services
• Revenues from fees and commission.
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Opportunities in banking
Mortgages to cross Rs.40 Lakh crores by 2020.
Wealth Management to be a big business.
Rapid growth of branches and ATM.
Mobile banking to see huge growth.
Infrastructure financing to reach over Rs.20 trillion
on commercial banks book by 2020.
New Models to serve the Small & Medium
Enterprises (SME)
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• In 2011-12, the industry faced major concerns in regardsto deteriorating asset quality, with gross non-performingassets (NPAs) of banks registering a sharp increase indifferent sectors such as aviation, infrastructure andpower.
• The present rates:
Bank rate – 8.75%
CRR – 4%
SLR – 3%
Repo rate – 7.75%
Reverse Repo rate – 6.75%
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M&A in banking industry
Private Sector Banks Merged with other banks1. Global Trust Bank (merged with Oriental Bank of Commerce - 14th
August 2004)2. Bank of Punjab (merged with Centurian Bank, which was later on
merged with HDFC Bank)3. Centurion Bank (merged with HDFC Bank)4. The Nedungadi Bank (merged with PNB)5. The Bank Of Rajasthan (merged with ICICI in 2010) 6. Bharat Overseas Bank (Merged with Indian Overseas Bank)7. Lord Krishna Bank (Merged with Centurion Bank of Punjab, which
was merged with HDFC Bank)8. The Sangli Bank (merged with ICICI Bank in 2006)9. The Ganesh Bank of Kurundwad (merged with Federal Bank)
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Conclusion: “Banking beyond banking”
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Key challenges to banking industry
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References: www.rbi.org.in www.ibef.in http://www.dnb.co.in/News_Press.asp?pid=117
9 http://en.wikipedia.org/wiki/File:Scheduled_ba
nking_structure_in_India.png http://www.infosys.com/finacle/solutions/thou
ght-papers/Documents/banking-in-India-evolution-in-technology.pdf
http://www.kpmg.com/IN/en/IssuesAndInsights/ArticlesPublications/Documents/KPMG_ICC_Indian_Banking_The_engine_for_sustaining_Indias_growth_agenda.pdf
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A presentation by
Valliappan.P (128939)
Satya Sharon.V (128959)
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