As banks' chase for customers to collect cheap deposits is not fructifying, they are forced to offer inflation-beating real interest rates on fixed deposits now, and state-run banks led by Punjab & Sind Bank tops the chart offering 8-8.50 per cent per annum deposit rate. Banks are forced to offer inflation-beating deposit rates for a tenor ranging from 200 to 800 days as credit growth has been far outpacing deposit mobilization throughout this fiscal, leading to a funding crunch.
Finance Minister Arun Jaitley sought parliament's approval on Friday to increase the spending budget for this fiscal year by $4 billion, with almost half to be used to inject extra capital into state banks struggling with bad loans.
'We are in a position to start due diligence and private data room access shortly.'
The reason why private banks will play the deposit pricing game strategically is the weakening of banks' deposits base given the competition from MFs and insurance companies due to tax-savings schemes.
The World Bank and India have concluded negotiations for loans worth $3.2 billion for recapitalising state-run banks and funding for the India Infrastructure Finance Company Ltd, a state-run lender to infrastructure projects.
In the following pages is a list of some of the top banks that have a successful track record in India (not all banks have been featured in this list because of space constraints).
The overarching talking point will be the reluctance on the part of private banks to loosen their purse strings and increase lending substantially, even as the central bank believes there is adequate liquidity within the system.
With their weak metrics and high bad loans, India's state-run banks have not been investor favourites
An anti-graft panel in Bangladesh has launched an investigation against former prime minister Sheikh Hasina and her family in connection with the allegations of embezzling $5 billion in the Rooppur nuclear power plant, according to a media report.
Jaitley said there was a need for the banking sector to fund infrastructure and manufacturing sectors to support the ambitions of higher growth.
In the biggest consolidation exercise in the banking space, the government on Friday announced four major mergers of public sector banks, bringing down their total number to 12 from 27 in 2017, a move aimed at making state-owned lenders global sized banks.
The government on Wednesday approved merger of crisis-ridden Lakshmi Vilas Bank (LVB) with DBS Bank India Ltd (DBIL) and removed restrictions on withdrawal of deposits by depositors. The Union Cabinet has approved the merger of the LVB with DBS Bank India Limited, Union Minister Prakash Javadekar told reporters, adding the decision will provide comfort to 20 lakh depositors and protect the services of 4,000 employees.
In mid-March this year, the finance ministry asked state-run banks to review their gold loan portfolio for the two-year period between January 1, 2022, and January 31, 2024. This business had grown at a fast clip. Reserve Bank of India (RBI) data has it that it grew 15 per cent to Rs 1 trillion in FY24. Now, in recent times, any kind of exuberance in financial services has seen the authorities swoop down - be it pushing the lines on governance or unsecured credit.
Still the Reserve Bank of India will operate as usual and can provide funds via its overnight repo window, traders also said.
An executive director of a bank could, for example, be elevated to the post of chairman of a different bank.
Bankers and government officials told Reuters Rajan's successor may be less aggressive in fighting bad loans, but the general direction will remain the same
A common feature in India is the lag between the occurrence of frauds and the time they are actually reported.
These changes will entail a relook at the various laws governing banks in the country - the two Bank Nationalisation Acts (passed in 1970 and 1980); the State Bank of India (SBI) Act of 1955; and the Companies Act of 2013.
The central bank has not set a deadline for banks to conclude the stress-test exercise, but senior bankers opine that some were already looking at this, and will now fast-track it by September-end, when they will have a better picture of their books after the moratorium on the servicing of loans and a 180-day view on the performance of borrowers' accounts.
India's state banks are under pressure to improve profitability.
In December last year, the finance ministry had asked five state-run banks -- Punjab National Bank, Canara Bank, Union Bank of India, Bank of Baroda and Bank of India -- to explore merger opportunities in the banking industry.
The first quarter of calendar 2023 will see new faces heading four large public-sector banks -- Canara Bank, Bank of Baroda, Indian Overseas Bank, and Bank of India.
State-run banks accounted for nearly two-third of the customer complaints received during the last financial year, the Reserve Bank of India (RBI) on Thursday said in its report on trend and progress of banking in the country.
State-run Bank of India said on Thursday it will lower some deposit rates by 25-50 basis points from June 7.\n\n\n\n
Prayagraj is a must-visit place in 2025, but in January and February you can't miss the Maha Kumbh, a spectacular event like no other.
'He's at best a holding-CEO. Not one who will re-imagine the bank,' a senior banker and former colleague tells Raghu Mohan about HDFC Bank CEO & MD Sashidhar Jagdishan.
'Companies like Tesla and others have been given a long rope in India.'
.jpg)
With new private banks in the play, the going could become more difficult for the old-school state-run banks, already losing business and market position, forcing them to think hard towards consolidating and forming larger entities to garner big-ticket deals.
The syndicate used "stooge" bank accounts and shell companies to transfer the largest amount linked to a single case recorded in the city, the Customs and Excise Department of Hong Kong said.
Although private banks continued to operate as usual majority of trade and industry was hit by the strike by staff of 25 nationalised banks who are demanding revision of wages and a second option for pension among other things. The Indian Banks' Association, a grouping of public sector banks, is yet to formally respond to the demands of the striking employees.
The PNB fiasco falls into a family line that involves non-fund limits - read contingent liabilities which are off-books. Harshad Mehta did it with bankers' receipts in 1992. Ketan Parekh exploited the ignorance of bankers who did not know the difference between a cheque and a pay-order. And the RBI blinked when it failed to insist the SWIFT platform be linked to the core banking solution. Raghu Mohan & Abhijit Lele trace the banking mess that was just waiting to happen.
Out of the total potential loss, the share of state-run banks will be Rs 24,800 crore in FY18, while that of the private sector banks will be Rs 5,700 crore
More people are now comfortable using their debit cards.
At the current market price of the stock, that stake would be valued at about $1.5 billion.
State Bank of India (SBI) is willing to work with Russian banks not facing sanctions and remain on the Society for Worldwide Interbank Financial Telecommunication (SWIFT) network to open a special rupee vostro account (SRVA) for invoicing in Indian currency. The country's largest lender in a statement said it has not been identified as the nodal bank for handling Russia-related transactions. In July, the Reserve Bank of India (RBI) allowed banks in India, including SBI, to open an SRVA to promote invoicing in Indian rupee, subject to certain safeguards. Accordingly, the bank in a statement said it is "making necessary arrangements and processing requests received from various banks, including Russian banks", following guidelines laid out by the RBI.
The current employee strength of all state-run banks is about 672,000.
Adani Ports, NTPC, Infosys, Hindustan Unilever, HCL Technologies and Sun Pharma were among the other big gainers. However, Larsen & Toubro, Bajaj Finance, State Bank of India, Axis Bank and HDFC Bank were amonh the major laggards.
Traders broadly expect the rupee to stay in a 61.50 to 63.50 range over the next three months.
A top-class board is important from a systemic point of view, more so at a time when the wider financial world and India Inc is chasing the same talent as banks.
© 2026 Rediff.com - Advertise with us - Disclaimer - Privacy Policy - Sitemap - Feedback - About us - Terms of use - Grievances