Banking industry in India - statistics & facts
The banking sector plays a crucial role in facilitating credit, investment, and infrastructure, especially in a middle-income economy like India. The country is not only home to nearly 1.4 billion inhabitants, but also to a vast network of banks and non-banking financial companies (NBFC) to execute a diverse range of financial services for individuals, companies, and small enterprises. The Reserve bank of India is the primary regulator of banks in India.
All other banks fall under the non-scheduled category. After most banks were nationalized at the end of the 1960s, a diversification of the banking landscape took place during the 1990s, when several private and foreign banks were licensed along with the economic liberalization reforms. In recent years, the banking sector received a digital facelift, when the importance of digital payments increased in line with the economic development of the country. Innovative concepts of NBFCs led to vivid competition and an active FinTech environment.
There were nearly 100 thousand scheduled banks in India, including around 98 thousand comparatively small rural and urban cooperative banks. The 22 private sector banks had assets worth over 800 billion U.S. dollars, whereas twelve public sector banks had assets worth over 1.5 trillion U.S. dollars. India’s leading bank based on market capitalization was a private sector bank, HDFC Bank, followed by public sector bank State Bank of India.
Although the total value of gross non-performing assets (GNPA) of public sector banks decreased from 2019 to 2021, a high share in NPAs brought some Indian banks into trouble. NPAs are loans or advances that cannot be paid back or are delayed. In March 2020, RBI ordered a consortium of the State Bank of India, some private banks, and private trusts to take over troubled Yes Bank.
Indian Banking landscape
The Reserve Bank of India (RBI) has been the country’s central banking institution and controls the issuance and supply of the Indian rupee. The RBI Act of 1934 broadly classified the Indian banking sector into scheduled banks and non-scheduled banks. Scheduled banks are those that have a paid-up capital and collected funds of over five lakh rupees and are eligible for loans from the RBI at the bank rate.All other banks fall under the non-scheduled category. After most banks were nationalized at the end of the 1960s, a diversification of the banking landscape took place during the 1990s, when several private and foreign banks were licensed along with the economic liberalization reforms. In recent years, the banking sector received a digital facelift, when the importance of digital payments increased in line with the economic development of the country. Innovative concepts of NBFCs led to vivid competition and an active FinTech environment.
There were nearly 100 thousand scheduled banks in India, including around 98 thousand comparatively small rural and urban cooperative banks. The 22 private sector banks had assets worth over 800 billion U.S. dollars, whereas twelve public sector banks had assets worth over 1.5 trillion U.S. dollars. India’s leading bank based on market capitalization was a private sector bank, HDFC Bank, followed by public sector bank State Bank of India.
Although the total value of gross non-performing assets (GNPA) of public sector banks decreased from 2019 to 2021, a high share in NPAs brought some Indian banks into trouble. NPAs are loans or advances that cannot be paid back or are delayed. In March 2020, RBI ordered a consortium of the State Bank of India, some private banks, and private trusts to take over troubled Yes Bank.
