Indian Banking Industry Overview - 2013

BANKING INDUSTRY IN INDIA

Introduction: Evolution of Indian banking industry

Pre - independence

Post independence

The 21st Century banking

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

Indian Banking –The engine for sustaining India’s growth

agenda

Public sector banks

Private sector banks

Foreign banks

Co-operative banks

RBI

Top five Private Sector Banks

ICICI Bank

HDFC Bank

Axis Bank

Yes Bank

KotakMahindra bank

Top five Public Sector Banks

SBI

Punjab National Bank

Bank of Baroda

IDBI Bank

Syndicate Bank

Financial products of banks

Market Capitalisation

Who regulates the financial sector in India?

Banking Amendment bill,2012

Changing Industry Dynamics by new rules

Impact of Changing repo rate by RBI

Growth drivers of Indian banking industry

Pest Analysis of banking industry

Porter’s five forces model:

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.

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)

• 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%

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)

Conclusion: “Banking beyond banking”

Key challenges to banking industry

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

A presentation by

Valliappan.P (128939)

Satya Sharon.V (128959)

THANK YOU