November 27, 2018 December 19, 2018
Private Sector Banks refer to those banks where most of the capital is in private hands. In India, there are two types of private sector banks viz. Old Private Sector Banks and New Private Sector Banks. Old private sector banks are those which existed in India at the time of nationalization of major banks but were not nationalized due to their small size or some other reason. After the banking reforms, these banks got license to continue and have existed in India along with new private banks and government banks.
Old Private Banks
At present, there are 12 old private sector banks in India as follows:
- Catholic Syrian Bank
- City Union Bank
- Dhanlaxmi Bank
- Federal Bank
- Jammu and Kashmir Bank
- Karnataka Bank
- Karur Vysya Bank
- Lakshmi Vilas Bank
- Nainital Bank
- Ratnakar Bank
- South Indian Bank
- Tamilnad Mercantile Bank
Among the above, Nainital Bank is a subsidiary of the Bank of Baroda, which has 98.57% stake in it.
Defunct Private Banks
Some other old generation private sector banks in India have merged with other banks. For example, Lord Krishna Bank merged with Centurion Bank of Punjab in 2007; Sangli Bank merged with ICICI Bank in 2006; Centurion Bank of Punjab merged with HDFC in 2008.More recently, in 2016, the ING Vysya Bank merged with Kotak Mahindra Bank, creating the fourth largest private sector bank in India.
New Private Sector Banks in India
The new private sector banks were incorporated as per the revised guidelines issued by the RBI regarding the entry of private sector banks in 1993. At present, there are nine new private sector banks as follows:
- Axis Bank
- Development Credit Bank (DCB Bank Ltd)
- HDFC Bank
- ICICI Bank
- IndusInd Bank
- Kotak Mahindra Bank
- Yes Bank
- IDFC
- Bandhan Bank of Bandhan Financial Services.
Kindly note that all the old and new banks listed above are scheduled commercial banks.
FAQs
Wealth Management: Private sector banks offer wealth management services to high-net-worth individuals, which include investment advisory, portfolio management, and other related services. Insurance: These banks also offer insurance products, such as life insurance, health insurance, and general insurance.
How many private sector banks are in India currently? ›
There are 12 public sector banks and 21 private banks. Compared to commercial banks, public sector banks have a substantially larger customer base. Compared to private banks, public sector banks have much greater transparency regarding their interest rate policy.
Which is the best private sector bank in India? ›
Top Indian banks in 2024 based on market cap
| Rank & Bank Name | Type | Market Cap (Rs Lakh Crore) |
|---|
| #1 HDFC Bank | Private | 11.57 |
| #2 ICICI Bank | Private | 7.84 |
| #3 SBI | Public | 7.35 |
| #4 Kotak Mahindra | Private | 3.32 |
6 more rowsMay 31, 2024
Amid recent market movements, public-sector bank stocks have surged while private-sector banks have experienced a retreat, largely due to consolidation efforts. The Nifty Private Bank index has seen a decline of almost 7% YTD, in contrast to the significant over 17% surge in Nifty PSU Bank index.
What are the disadvantages of private banks? ›
Disadvantages of Private Banking
- Reduced Set of Product Offerings. When it comes to investments, you may be limited to the proprietary products of the bank. ...
- You Might Lose Out on Interest. Suppose you have to meet minimum balance requirements on an account with a lower APY. ...
- There's a High Turnover in Private Bankers.
Here are some of the things it does: Contribute to national income: The private sector delivers vital goods and services, contributes to tax revenues and ensures the efficient flow of capital.
Which is the 3 largest private bank in India? ›
• Axis Bank
The bank has a vast customer base, making it the third-largest and one of the best private banks in India. Revenue: 1,06,155 Cr. Net Income: 11,742 Cr.
Which is the No 1 safe bank in India? ›
A Brief Look at the Top 10 Banks in India
| S. No. | Bank Name |
|---|
| 1 | State bank of India (SBI) |
| 2 | HDFC Bank |
| 3 | ICICI Bank |
| 4 | Punjab National Bank (PNB) |
6 more rowsKotak Mahindra is one of the fastest growing banks in India, and the flagship for the financial services conglomerate Kotak Group. The bank's product offer is huge, with a range of services and accounts for personal, corporate, business and private customers.
Is private banking for the rich? ›
Wealth management, on the other hand, typically caters to providing investment-related advice and services to banking clients. The types of clients also differ between the two. Private clients cater to the ultra wealthy while wealth management is meant for high-net-worth individuals.
If you're a high-net-worth individual, choosing private banking can help you save money on loan interest rates and bank account fees, earn more on your deposit accounts, and get access to special offerings. You only pay for extra services.
What happens if banking collapses? ›
In most cases, the FDIC will try to find another banking institution to acquire the failed bank. If that happens, customers' accounts will simply transfer over to the new bank. You will get information about the transition, and you will likely get new debit cards and checks (if applicable).
Why Indian banks should be Privatised? ›
This has removed the risk of them being undervalued, which could have postponed the decision of selling the government's stake in them. Currently, the PSU banks are performing well and have healthy asset books, which makes it an ideal time for privatising them.
Why is banking sector important in India? ›
The Indian banking sector is one of the most active sectors that provide loans to individuals and institutions. The Indian economy has a huge impact on active loans. It is crucial in providing funds to different priority sectors like small-scale industries, agriculture, trading enterprises, real estate, etc.
Why do you need private banking? ›
As a Private Banking client, you can be assured of privacy, discretion and a high level of individual service in your financial affairs. Private banking ensures a high measure of integrity and compliance, ensuring that your financial information is kept confidential and secure.
What is the financial performance of private sector banks in India? ›
The operating profit of private sector banks are also continually increased from Rs. 49,568 crores in the year 2014-15 to Rs. 81,372 crores in the financial year 2018-19.
