Presentation on

Public Sector & Private Sector Bank.

Presented To:

Prof. Prasad Joshi

By:

Somnath Pagar Abhishek Mahale

MET IOM, Nashik.

What is Bank?

Bank is a lawful organization, which accepts

deposits that can be withdrawn on demand. It also

lends money to individuals and business houses that

need it.

MET IOM, Nashik.

Types of Bank

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Commercial Bank

Definition-

Commercial Banks are banking institutions that accept

deposits and grant short-term, medium and long term loans and

advances to their customers.

Public sector banks –

Majority stake is held by the Government of India or

Reserve Bank of India.

Ex – SBI, Bank of Baroda, Dena Bank, etc.

Private sector banks –

Majority of share capital of the bank is held by private

individuals, Registered as companies with limited liability.

Ex – ICICI Bank, HDFC Bank, YES Bank etc.

MET IOM, Nashik.

63%

19%

8%

6%4%

Market Shares of Indian Financial Sectors

Banks

Insurance Companies

Non-Banking FinancialInstitutions

Mutual Funds

Provident And PensionFunds

*Source: Banking Structure Report by- D. Subbarao.MET IOM, Nashik.

Market Shares of Indian Banking Sectors

67.2

18.7

6.5 2.7 3.4 1.50

10

20

30

40

50

60

70

80

Public Sector Bank Private Sector bank Foreign Banks Regional and RuralBanks

Rural and Urban Co-operative Banks

Local Area Banks

*Source: Banking Structure Report by- D. Subbarao.MET IOM, Nashik.

Public & Private Sector Banking Structure

Public Sector Banks (26)

State Bank of India

Associates Banks (6)

Nationalized (19)

Private Sector Banks (20+2)Old Private Sector Banks (13)

New Private Sector Banks (7+2)

New Banking Licenses issued by RBI in 2014

Infrastructure Development Finance Company(IDFC)

Bandhan Micro-finance

MET IOM, Nashik.

Licensing Policy

The RBI issues bank licences under section 22 of the Banking

Regulation Act, 1949. The licence enables the bank to do banking and other

financial services activities listed in the Banking Regulation Act.

For Public Sector & Private Sector Banks-

1) Eligible Promoters

2) Foreign shareholding in the bank – Not exceed 49 %.

3) Capital Requirement

Minimum capital requirement Rs 1 Billion(1991)

Minimum capital requirement Rs 3 Billion(2001)

Minimum capital requirement Rs 5 Billion(2013)

MET IOM, Nashik.

Legal Framework for Banking

At present, commercial banks are governed by the following six statutes-

The Banking Regulation Act, 1949

Banking Companies (Acquisition & Transfer of Undertaking) Act, 1970/1980

State Bank of India Act 1955

State Bank of India (Subsidiary Banks) Act, 1959

Industrial Development Bank (Transfer of Undertaking and Repeal) Act, 2003 and

The Companies Act, 2013 ( Old-1956).

MET IOM, Nashik.

Presence of Indian Public & Private banks abroad

Indian banks are allowed to expand overseas under a policy framework of

Reserve Bank of India and Government of India. In February 2005, RBI had

come out with a press release stating that the applications from Indian banks for

setting up representative offices / branches / subsidiary’s outside India.

State Bank of India accounted for the largest share (29.71%) in the total assets of

the overseas branches of Indian banks as on March 31, 2013.

Bank of Baroda with 20.53%

Bank of India with 16.08% and

ICICI Bank with 15.47%.

Spread across

17 countries.

MET IOM, Nashik.

Comparative Analysis:

Public vs. Private Sector Banks

Return on Assets and Return on Equity

Bank SectorReturn on Assets Return on Equity

2012-13 2013-14* 2012-13 2013-14*

Public Sector Banks

SBI 0.78 0.89 13.24 15.25

Nationalised Banks* 0.74 0.88 12.34 14.65

SBI Group 0.88 0.94 15.29 14.95

Private Sector banks

Old Pvt. Sector Banks 1.26 1.42 16.22 17.05

New Pvt. Sector Banks 1.74 1.86 16.51 17.94

Source: RBI Published data

Notes: 1. Return on Assets = Net profit/Average total assets.

2. Return on Equity = Net profit/Average total equity.

3. *The data for 2014 is provisional.

4. * Nationalised banks include IDBI Bank Ltd.MET IOM, Nashik.

Priority Sector Advances(Amount in billion)

Notes: 1. Figures in brackets are percentages to ANBC or CE of

OBE, whichever is higher, in the respective groups.

2. The data for 2014 is provisional.

Source: RBI Annual Report 2014.

MET IOM, Nashik.

Name of Indian Bank Ranking

SBI 38

ICICI Bank 99

HDFC Bank 126

Axis bank 175

PNB 189

BOB(Baroda) 206

Ranking of Indian banks in the global league

*Source: http://brandirectory.com/league_tables/table/banking-500-2013

MET IOM, Nashik.

MET IOM, Nashik.

Thank You…!

MET IOM, Nashik.