India has one of the largest numbers of private sector banks in the world. There are 21 private banks in India. Some of them are operating since over 100 Hundred years.
According to the India Brand Equity Foundation (IBEF), the financial and economic situation in India is far superior to any other country in the world.
Despite scams and frauds that rocked the banking industry occasionally, there are no imminent or long-term threats to Indian banks.
They are well regulated by the Reserve Bank of India and live up to the expectations of most customers.
Current Scenario of Private Banks in India:
According to statistics released by RBI, the Indian banking system consists of 27 Public Sector Undertaking (PSU) or nationalized banks, 21 private banks, 46 foreign banks, 56 regional rural banks, 1,574 urban cooperative banks and 93,913 rural cooperative banks.
In recent years, private banks in India are propelling the nation’s banking sector with a slew of new products such as digital transactions, round-the-clock service, net-banking facilities, home and vehicle finance and several other products.
Indeed, private banks have become formidable players in this key Indian sector.
India’s private banking industry traces its history to 1899, when the Nedungadi Bank opened in Kozhikode, Kerala.
It continued operations till 2003 and was merged with PSU lender, Punjab National Bank.
It is the oldest private bank of India that continues to operate till date is City Union Bank established in 1901 in Thanjavur, Tamil Nadu.
While a large number of private banks from the pre-independence era continue to flourish, several newer generation ones have emerged over the last couple of decades. Here we look at the major private banks of India.
List of Top 18 Private Banks in India 2020:
1. HDFC Bank
Housing Development & Finance Corporation (HDFC), a pioneering NBFC well reputed for its home loans. Established in 1994, it ranks today as India’s largest private sector bank by assets and market capitalization.
It was also ranked 69 among BrandZ Top 100 Most Valuable Global Brands in 2016 and has won innumerable accolades. By mid-2017, HDFC Bank had 4,715 branches and over 12,260 ATM locations.
HDFC Bank offers the entire array of banking and financial services to retail, corporate and Non-Resident Indian customers through its state-of-the-art systems and online portals.
2. Axis Bank
Axis Bank is an offshoot of Unit Trust of India (UTI) ranks among the new generation private banks.
It was established in 1993. Axis Bank operates some 3,200 branches in all states and Union Territories of India and has over 13,000 ATM locations.
Indeed, Axis Bank has a unique distinction – of operating the world’s highest ATM point at 4,024 meters above sea level in Thegu, Sikkim.
Axis Bank has several subsidiaries and Non-Banking Financial Companies (NBFCs).
Also Read: 13 Key Difference Between NBFC and Bank
ICICI Bank was launched in 1994. Its expanded initials stand for Industrial Credit and Investment Corporation of India. ICICI Bank ranks as the third largest private bank of this country.
It has a network of over 4,900 branches and some 14,450 ATM locations spread across India. ICICI Bank has representations in about 20 countries in the Middle East, North America, Africa, Europe and Far East Asia.
In 2000, ICICI Bank scored a first for the nation’s private banking industry: it is the first private Indian bank whose shares were listed on New York Stock Exchange.
Launched in 1994, IndusInd Bank now operates about 1,500 branches and nearly 2,000 locations across the country.
It was launched primarily to cater to Non-Resident Indian (NRIs) but since has emerged as a top bank among resident Indians too.
IndusInd Bank launched several pioneering banking projects in India such as allowing customers to select their own account number, money-on-mobile, and many others.
The bank has won several prestigious accolades for its innovative products and banking services.
Also Read: Top 10 Best Cooperative Banks in India 2019
Yes Bank was founded in 2004 and has headquarters in Mumbai. It ranks among the topmost private banks of India.
According to its corporate website, Yes Bank has over 1,000 branches covering all states of India and some 1,800 ATM locations. Yes Bank is also billed as the fastest growing private bank of this country.
Yes Bank offers a unique service for women: called Yes Grace Bank, these special branches are operated by Female staff and offer special savings and investment products exclusively targeted at the financial empowerment of women.
The Federal Bank Ltd traces its origin to 1931, where it opened from home of its founders in Nedumpuram, located in Travancore with a capital of Rs.5,000. It was then known as Travancore Federal Bank Ltd.
Today, Federal Bank operates nearly 1,300 branches in India with some 1,700 ATM locations.
In August 2015, Federal Bank scored a first by launching an app that enabled people to open accounts with their smart-phones.
The same year, Federal Bank also launched another first for in the nation’s banking industry- automated online chatting.
South Indian Bank Ltd has a very interesting history that dates back to the year 1913. It was launched in Thrissur, Kerala by a collective of some 44 persons who contributed Rs. 500 each for its seeding.
The South Indian Bank has about 852 branches and some 1,335 ATM sites in various states and Union Territories of India.
The bank has several firsts to its credit. South Indian Bank was the first private bank to open a branch, especially for Non-Resident India.
Karnataka Bank Ltd was also opened during the colonial era, opening for business in 1924 in the coastal city, Mangalore. Karnataka Bank operates over 800 branches and some 1,400 ATM sites in India.
In recent years, Karnataka Bank has adopted several new technologies to provide easier and faster banking solutions to customers.
Consequently, the bank has won several awards from various organizations for its services and innovations.
Karur Vysya Bank ranks among the oldest private sector banks of India and was established in 1919 in Karur, Tamil Nadu.
KVB is engaged in consumer, corporate banking, providing financial services to India’s agriculture, Micro, Small and Medium Enterprises sector and Non-Resident Indians.
KVB is also engaged in finance and insurance, wealth development and other related activities. Karur Vysya Bank operates some 780 branches and over 1,800 ATM locations in India.
The grandpa of India’s private banking sector is City Union Bank (CUB) and was founded in October 1904.
It is the oldest private bank to have operations. CUB began operations from Thanjavur in Tamil Nadu as The Kumbakonam Bank Ltd.
By end of 2017, CUB had close to 570 branches across India and some 1,600 ATM locations. CUB was the first to launch India’s banking robot named Lakshmi, which allows customers to request some 120 details and services.
Catholic Syrian Bank (CSB) is also among the oldest private banks of India that continues operations till date.
It was established in Thrissur, Kerala in November 1920. After focusing on the development of its business in Kerala, it managed to acquire several smaller private banks in the state.
Today, CSB operates over 430 branches and more than 250 ATM locations across the country. To date, it remains a very popular bank in Kerala.
Founded as Nadar Bank in 1921 in Tuticorin, Tamil Nadu, the bank focused on catering to the indigenous ‘Nadar’ community of the region. It acquired the new identity in 1962, to acquire more customers.
TMB held the position as the fastest growing private bank in India for five consecutive years- from 2010 to 2015. TMB operates 510 branches and some 1,200 ATM locations.
It is planning rapid expansion in the coming years. TMB is also increasing its presence in metro cities of India.
Lakshmi Vilas Bank was established in 1926 in Karur, Tamil Nadu and also ranks among the oldest private banks to operate in this country.
It operates some 525 branches and close to 1,000 ATM locations across the country, including several in metro cities.
Between 1960 and 1965, Lakshmi Vilas Bank acquired several smaller banks in Tamil Nadu and other parts of the country to emerge as a major player in the banking industry of India.
Dhanlakshmi Bank also traces its roots to Thrissur, Kerala and is one of the oldest operational private banks of India. It was founded in November 1927.
Dhanlakshmi Bank operates over 280 branches in 12 states and Union Territories and has a network of 400 ATMs.
The bank is expanding its presence by opening new branches in various states of India.
It has agreements with major insurers to offer a slew of insurance products to customers.
Formerly called Ratnakar Bank Ltd, it was rebranded as RBL Bank a few years ago. RBL Bank traces its origins to August 1943 when it was founded in Mumbai.
RBL Bank currently is reputed for its very modern banking services that are comparable with the best in this sector. RBL Bank has 248 branches as 388 ATM locations across the country.
16. IDFC Bank
IDFC Bank is the newest entrant on India’s private banking scene. It was launched by a major NBFC- Infrastructure Development Finance Corporation.
IDFC Bank was formally launched by India’s Prime Minister Narendra Modi on October 19, 2015.
The bank is on a rapid expansion spree. In October 2017, IDFC Bank opened its 100th branch in Honnali, Karnataka. IDFC Bank offers easy opening of zero-balance accounts online and a wide range of modern services for customers.
17. Bandhan Bank
Bandhan Bank is also one of the newest entrants in India’s private banking sector. It was launched on December 23, 2014, in Kolkata.
The bank traces its humble roots to a micro-finance company that began operating in West Bengal in 2001. The bank was inaugurated by India’s Finance Minister, Arun Jaitley.
It has rapidly expanded since inception and today has some 893 branches and 450 ATM locations, according to the bank’s website- which signifies a very rapid pace of growth, unparalleled by most private banks.
18. DBC Bank
DCB Bank ranks among the oldest in India’s private banking sector. It was founded in 1930.
DCB Bank has won the accolade of Best Small Bank in India-2017. DCB Bank has 310 branches and 515 ATM sites.
The Aga Khan Fund for Economic Development is the main promoter of the bank, holding a stake of over 15%.
The bank was formed as the merger of two cooperatives, Ismailia Cooperative Bank Ltd and Masalawala Cooperative Bank Ltd who founded the Development Credit Bank. This was later renamed as DCB Bank.
India’s private banks are growing very rapidly. Their popularity stems from agility and swiftness in adopting the latest technologies that provide faster service to customers.
Further, private banks also offer apps and various other platforms that enable customers as well as non-customers to do speedy transactions such as purchases and mobile recharges.
Indeed, private banks in India can rightly be credited with softening the fallout of flash demonetization of Rs.500 and Rs.1,000 currency notes on November 9, 2016, by the Indian government: they helped cash-strapped customers of other banks to exchange their defunct currency in exchange of new tender.