Find Banking and Financial Services expertise in India
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- Regulation
- Development
Banks
The Indian financial structure is strong, functionally diverse and competitive on a global scale. India’s soaring demand for financial services has stimulated industry growth and attracted foreign direct investment. The financial system is dominated by the banking sector, with over 100 private, public and foreign-owned commercial banks in the country (2010). A significant portion of these, 19, are majority-owned by the Indian government. Alongside these are the eight banks of the State Bank Group, which consists of the State Bank of India (SBI) and Associate Banks of SBI. The Group is the largest financial services enterprise in the country and one of the biggest companies overall. ICICI Bank, Punjab National Bank and Canara Bank are the other large banks in terms of total assets and market share. A number of overseas financial institutions including HSBC, Citigroup, Standard Chartered and ABN Amro have developed strong distribution networks and business relationships in India, either through direct offerings, subsidiaries or joint ventures. Most of their operations of foreign banks are in metropolitan areas such as New Delhi and Mumbai and there tends to be a concentration in corporate banking and offshore financing. Alongside the State Bank Group and the nationalised banks are the Regional Rural Banks (RRBs) which aim to provide low-cost financing and credit facilities to rural areas. The banking sector has compared favourably with other sectors in the region on metrics such as growth, profitability and non-performing assets over the few years leading up to 2012.
Regulation of Financial Services
The Reserve Bank of India, the country’s central bank, is the regulator for the banking and the financial services industry. n the decade before 2011 the banking sector saw many positive developments in terms of regulation. Policymakers, consisting of the Reserve Bank, Ministry of Finance and related government and financial sector regulatory entities, have made several substantial efforts to improve regulation in the sector. These changes include strengthening prudential norms, enhancing the payments system and integrating regulations between commercial and co-operative banks. The World Economic Forum’s Global Competitiveness Report (2012-13) rated India 38th for the soundness of its banks.
Development of Financial Services
In the 2011 World Bank’s Ease of Doing Business Index, India’s favourable position in relation to other sectors in the region was reflected in its position as 40th in the world (out of 183 countries) for getting credit, the highest ranking South Asian nation. In relation to protecting investors it rated 46th, below only Bangladesh in comparison to regional competitors. In the World Economic Forum’s Global Competitiveness Report (2012-13) India ranked 44th in the world (out of 144 countries) for its availability of financial services, far above others in the region such as Bangladesh at 98th and Pakistan at 95th. In relation to the affordability of financial services it places 33rd, coming three above the high-income economy of Australia. India has burgeoning equity markets. For financing through the local equity market it ranked in a very prominent 19th position, with a score of 4.6 out 7 above a mean of 3.5. The ease of access to loans in the country was ranked at 38th in the world.
| Banking and Financial Services organisations in India | |
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| Abu Dhabi Commercial Bank |
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| Bank of India |
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| Central Bank of India |
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| Reserve Bank of India |
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