Dun & Bradstreet India is pleased to release the fourth edition of its banking publication ‘India’s Top Banks 2010’. The Indian banking system has developed steadily over a period of time in terms of size, ownership patterns, geographic reach and competitiveness. While Public Sector Banks continue to account for a major part of the total business, Private Sector Banks operating in India have also been making significant inroads by aggressively capturing market share. At the same time, foreign banks with operations in India have also been playing a prominent role in the personal and corporate banking segment, accounting for a major part of the off-balance sheet business growth.

The Indian banking sector has reported strong performance in the last 5 years - between FY04 and FY09. The total business of Scheduled Commercial Banks (SCBs), stood at over ` 66 trillion in FY09 - a 5 year CAGR of approximately 23%. Growth could be witnessed in terms of penetration too, with both per capita credit and deposit for SCBs per office rising from ` 8,273 and ` 14,089 respectively in FY04 to ` 24,945 and ` 34,372 respectively in FY09. Putting this in perspective with the overall economy, the total deposits of SCBs as % of GNP stood at an enhanced ratio of 78.1% in FY09 as against 59.4% in FY04. Further, this was with only a modest rise in the gross savings rate from 31.4% in FY04 to 33.3% in FY09.

Indian banking will now enter a very interesting phase as the sector is likely to see numerous changes that will significantly alter the sector’s landscape. On one hand, the RBI is considering granting licenses to credible private players and NBFCs that meet requirements – a step that will lead to further competitiveness in the financial services sector. On the other hand, some initiatives encouraging the amalgamation of banks are also being taken - making way for the emergence of a stronger banking system. Other initiatives like migrating to the base rate system from the prime lending rate, is a move to ensure greater transparency in the sector. At the same time, the banks haven’t just stood still. The aggressive implementation of core banking solutions by SCBs and RRBs, for instance, demonstrates the willingness of banks to adopt technological advances that achieve greater efficiencies.

With new policy initiatives and better transparency measures, we expect Indian banks to keep innovating in order to tap into new business opportunities, and at the same time ensure a balanced evaluation of risks. With the RBI’s projections of 17% and 20% growth for M3 and non-food credit respectively in 2010-2011, a prudent mix of innovation and caution will be the way forward for Indian banking sector.

‘India’s Top Banks 2010’ collates important aspects of the Indian banking industry, while profiling its leading players. We are confident that this publication will serve as an authoritative and useful ready reference tool for business leaders globally. I hope you enjoy reading this edition and look forward to receiving your suggestions.

Kaushal Sampat
President & CEO - India
Dun & Bradstreet