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Private Sector Bank in Indian Banking Industry:



I had been working in the Banking industry in India since last eight years. During this period, the industry has seen a lot of changes taking place as elsewhere in India. The Indian Banking Industry was predominantly functioned under Govt. control and private sector banks had a little role to play. Even they were not allowed to expand and were not given licenses for opening new branches. However this protection to Public sector Banks by the government affected their efficiency and also led to rise of very high level of union activities. This worsened the case and the Banks became mere tools of giving employment. But in the nineties the government started reform process and new private sector have been allowed to enter the market. The working conditions have also been liberalized. I have taken data from various reports of RBI, the regulator of banking industry in India, to prepare this project. The data pertains to financial years ended March, 2000 and March,2001.


The Private sector segment of the banking industry in India has increased its market share in deposits and advances spurred by the sharp growth in business among the new private sector banks. The nationalized banks, on the other hand, lost market share in both deposits as well as advances.

The Pie charts are for the deposits of various group of Banks in India.

The Pie charts which show comparative figures for all the groups to whole banking industry, show that where State Bank was able to maintain its share, Nationalised Banks have last 1% share in Deposits from 2000 to 2001.

The State Bank of India group, which forms a part of public sector banks (but not included under nationalized banks), which has seen a marginal growth in its share of deposits, has seen a drop in advances market share. Foreign banks have lost market share in deposits, partly due to the restructuring in operations of some of the players.

However, foreign banks as a group have gained in credit. The figures for the market share of various segments of the banking industry are provided by the Reserve Bank of India in its quarterly handout on banking statistics, which provides data on aggregate deposits and gross bank credit of scheduled commercial banks as on March 31.

Other scheduled commercial banks which includes the new private sector banks have seen their share of deposits rise sharply to 12.50 per cent from 12.19 per cent last year, while their share of advances have shot up to 12.57 per cent from 12.07 per cent in the previous year. Foreign banks have seen their share of deposits increasing to 5.28 per cent from 5.41 per cent in 2000.However, their share of advances has risen to 7.71 per cent from 7.94 per cent a year ago. Regional rural banks have done better in mobilizing deposits. Their share has gone up marginally to 3.45 per cent from 3.50 per cent last year, and their share of advances has increased to 2.69 per cent from 2.78 per cent.