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Banking

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Banking

January, 2011

The banking system remains, as always, the most dominant segment of the financial sector. Indian banks continue to build on their strengths under the regulator's watchful eye and hence, have emerged stronger.

In the annual international ranking conducted by UK-based Brand Finance Plc, 18 Indian banks have been included in the Brand Finance® Global Banking 500. In fact, the State Bank of India (SBI) which is the first Indian bank to be ranked among the Top 50 banks in the world, has improved its position from 36th to 34th, as per the Brand Finance study released on February 1, 2011. The brand value of SBI has enhanced to US$ 1,119 million. ICICI Bank, the only other Indian bank in the top 100 club has improved its position with a brand value of US$ 2,501 million. According to the study, Indian banks contributed 1.7 per cent to the total global brand value at US$ 14,741 million and grew by 19 per cent in 2011.

According to RBI's 'Quarterly Statistics on Deposits and Credit of Scheduled Commercial Banks: June 2010', nationalised banks, as a group, accounted for 51.3 per cent of the aggregate deposits, while State Bank of India (SBI) and its associates accounted for 22.8 per cent. The share of New private sector banks, Old private sector banks, Foreign banks and Regional Rural banks in aggregate deposits was 13 per cent, 4.8 per cent, 5.1 per cent and 3.1 per cent respectively.

With respect to gross bank credit also, nationalised banks hold the highest share of 51.5 per cent in the total bank credit, with SBI and its associates at 23.2 per cent and New Private sector banks at 13 per cent. Foreign banks, Old private sector banks and Regional Rural banks held relatively lower shares in the total bank credit with 5.3 per cent, 4.6 per cent and 2.5 per cent respectively.

The report also found that scheduled commercial bank offices (with deposits of INR 10 crore or more) accounted for 65.2 per cent of the bank offices, 96.6 per cent in terms of aggregate deposits and 94 per cent in total bank credit.

Significantly, on a year-on-year basis, bank credit grew by 24.4 percent in 2010 as against RBI’s projections of 20 percent for the entire fiscal 2010-11. However, deposits lagged behind at 16.5 percent versus a projection of 18 percent.

India's foreign exchange reserves stood at US$ 299.39 billion as on January 21, 2011, according to the data in the weekly statistical supplement released by the Reserve Bank of India.

Indians working overseas sent more money back home than any of their global counterparts, remitting US$ 50 billion in 2009 despite a worldwide economic slowdown and anti-immigration measures adopted by industrialized countries.

Major Developments

Indian Bank has received the Central Bank of Sri Lanka's nod to open its branch at Jaffna in Sri Lanka.

Indian Bank has signed an agreement with Weizmann Forex Ltd, and will now offer foreign remittances service over the counter at all its branches.

The National Payment Corporation of India is rolling out an instant interbank mobile payment service (IMPS) that will enable retail customers of seven banks to enjoy 24X7 funds transfer. State Bank of India, Bank of India, Union Bank of India, ICICI Bank, HDFC Bank, Axis Bank and YES Bank on November 22, 2010 became the first set of banks to go live with the IMPS.

Amongst the private banks, owing to strong growth in interest income, the country’s third-largest private sector lender, Axis Bank, reported a net profit of US$ 166.3 million for the second quarter of FY11, a 38.28 per cent increase from US$ 120.3 million a year ago.

HDFC Bank, India’s second largest private lender reported a 32.7 percent rise in net profits at US$ 204.3 million for the quarter ended September 30, 2010.