Private Sector Banks in India – All you need to know

what is private sector bank?

Private Sector Banks in India Private Sector Banks in India plays a major role in Financial Inclusion. This Article will give you clear insights into Private Banks, Local Area Banks, Small Banks, Payment Banks, and Foreign Banks.

Introduction to Private Sector Banks in India:

The Indian Banking System comprises two major sectors of Banks. i.e. Public and Private Sector Banks. The former is controlled by the Government and the latter’s share or equity are held by private shareholders. The Private Sector Banks in India are divided into two groups. They are Old Private Sector Banks and New Private Sector Banks.

  • Old Private Sector Banks existed prior to the nationalization in 1969 and kept their independence because they were either too small or specialist to be included in nationalization.
  • The new private sector banks are those that have gained their banking license since the liberalization in the 1990s.

Difference between Public and Private Sector Banks in India:

1 The ownership of the Public Sector Banks are the banks lies with the government. The ownership of the Private Sector Banks is held by the individuals and corporations.
2 There are 27 Public Sector Banks There are 21 Private Sector Banks
3 The interest rate on deposits is usually high The interest rate on deposits is marginally lower
4 Market Share 72.9% Market Share 19.7%
5 The customer base is very high The customer base is comparatively low
6 Job security is there Purely based on performance
7 The pension is there No Pension

Private Indian Banks

List of Private Sector Banks in India and their headquarters / Tagline:

S No Private Indian Banks Headquarters Tagline
01 Axis Bank  Mumbai Everything is the same except the name
02 Bandhan Bank  Kolkata  Aapka Bhala, Sabki Bhalai
03 Catholic Syrian Bank  Ernakulam Support all the way
04 City Union Bank  Kumbakonam Trust and Excellence
05 Development Credit Bank  Mumbai  –
06 Dhanalakshmi Bank  Thrissur
07 Federal Bank  Aluva Your Perfect Banking Partner
08 HDFC Bank  Mumbai We Understand your World
09 ICICI Bank  Mumbai Hum Hai Na
10 IndusInd Bank   Mumbai We Make You Feel Richer
11 IDFC Bank  Mumbai  Banking Hatke
12 Jammu & Kashmir Bank  Sri Nagar Serving to Empower
13 Karnataka Bank  Mangalore Your family bank across India
14 Karur Vysya Bank  Karur Smart Way to Bank
15 Kotak Mahindra Bank   Mumbai Let’s make money simple
16 Lakshmi Vilas Bank  Chennai The Changing Face of Prosperity
17 Nainital Bank  Nainital Banking with a personal touch
18 Ratnakar Bank  Mumbai  –
19 South Indian Bank  Thrissur Experience Next Generation Banking
20 Tamil Nadu Mercantile Bank  Tuticorin
21 YES Bank Ltd   Mumbai Experience our Expertise

Local Area Banks

What are Local Area Banks?

  • The Local Area Bank Scheme was introduced in August 1996 pursuant to the announcement of the then Finance Minister.
  • LABs were set up to enable the mobilization of rural savings by local institutions and, at the same time, to make them available for investments in the local areas. i.e., primarily in rural and semi-urban areas, comprising three contiguous districts.
  • LABs were required to have a minimum capital of Rs. 5 crores.

Complete List of Local Area Banks and their Headquarters with Contiguous Districts:

S. No Local Area Banks Contiguous Districts Headquarters
22 Coastal Local Area Bank Limited Krishna, Guntur and West Godavari  Vijayawada in Andhra Pradesh
23 Krishna Bhima Samruddhi Local Area Bank Limited Mahbubnagar in Andhra Pradesh and Raichur and Gulbarga in Karnataka  Mahbubnagar, Andhra Pradesh
24 Capital Local Area Bank Ltd. Kapurthala, Hoshiarpur and Jalandhar  Phagwara, Punjab.

Small Finance Banks

What are Small Finance Banks?

  • Small Finance Banks mainly focus and serve the needs of a certain demographic segment of the population.
  • The minimum paid-up capital of such banks is Rs. 100 crores
  • The aim is to provide financial inclusion to sections of the economy not being served by other banks. Those sections include small business units, small and marginal farmers, micro and small industries and unorganised sector entities.

Complete List of Small Finance Banks and their Headquarters / Taglines:

S. No Small Finance Banks Headquarters Tagline
25 Au Small Finance Bank Limited  Rajasthan (Jaipur)  Chalo Aage Badhe
26 Capital Small Finance Bank Limited  Punjab (Jalandhar)
27 FINCARE Small Finance Bank Limited  Gujarat (Ahmedabad)
28 Equitas Small Finance Bank Limited  Tamilnadu (Chennai)  Its Fun Banking
29 ESAF Small Finance Bank Limited  Thrissur (Kerala)  Joy of Banking
30 Suryoday Small Finance Bank Limited  Maharastra (Navi Mumbai)  A Bank of Smiles
31 Ujjivan Small Finance Bank Limited  Karnataka (Bengaluru)  Bharosa, Aap ke Bharose Par
32 Utkarsh Small Finance Bank Limited  Uttarpradesh(Varanasi)  Aapki ummed Ka kata
33 North East Small Finance Bank Limited  Assam (Guwahati)  Your Door Step Banker

Payment Banks

What are Payment Banks?

  • Payments banks is a new model of banks conceptualized by the Reserve Bank of India (RBI).
  • These banks can accept a restricted deposit, which is currently limited to ₹1 lakh per customer and may be increased further.
  • These banks cannot issue loans and credit cards. Both current account and savings accounts can be operated by such banks.

Complete List of Payment Banks and their Headquarters / Taglines:

S. No Payments Banks Headquarters
34 Airtel Payments Bank Limited  New Delhi
35  India Post Payments Bank Limited  –
36 Fino Payments Bank Limited  Mumbai
37 Paytm Payments Bank Limited  New Delhi

Private Foreign Banks

Complete List of Private Foreign Banks and their Country of Incorporation:

S No Foreign Banks Country of Incorporation
01 Australia and New Zealand Banking Group Ltd. Australia
02 Commonwealth Bank of Australia Australia
03 National Australia Bank Australia
04 Westpac Banking Corporation Australia
05 Bank of Bahrain & Kuwait BSC Bahrain
06 AB Bank Ltd. Bangladesh
07 Sonali Bank Ltd. Bangladesh
08 KBC Bank NV Belgium
09 Bank of Nova Scotia Canada
10 Industrial & Commercial Bank of China Ltd. China
11 BNP Paribas France
12 Credit Agricole Corporate & Investment Bank France
13 Societe Generale France
14 Deutsche Bank Germany
15 HSBC Ltd Hong Kong
16 Bank Internasional Indonesia Indonesia
17 Mizuho Bank Ltd. Japan
18 Sumitomo Mitsui Banking Corporation Japan
19 The Bank of Tokyo- Mitsubishi UFJ, Ltd. Japan
20 SBM Bank(Mauritius) Ltd Mauritius
21 Rabobank International Netherlands
22 The Royal Bank of Scotland N.V. Scotland
23 Doha Bank Qatar
24 JSC VTB Bank Russia
25 Sberbank Russia
26 DBS Bank Ltd. Singapore
27 United Overseas Bank Ltd Singapore
28 FirstRand Bank Ltd South Africa
29 Shinhan Bank South Korea
30 Woori Bank South Korea
31 Korea Exchange Bank South Korea
32 Industrial Bank of Korea South Korea
33 Bank of Ceylon Sri Lanka
34 Credit Suisse A.G Switzerland
35 UBS AG Switzerland
36 CTBC Bank Co., Ltd. Taiwan
37 Krung Thai Bank Public Co. Ltd. Thailand
38 Abu Dhabi Commercial Bank Ltd. UAE
39 Mashreq Bank PSC UAE
40 National Bank of Abu Dhabi PJSC UAE
41 Barclays Bank Plc. United Kingdom
42 Standard Chartered Bank United Kingdom
43 American Express Banking Corporation USA
44 Bank of America USA
45 Citibank N.A. USA
46 J.P. Morgan Chase Bank N.A. USA

Frequently Asked Questions :

How many Indian Private Sector Banks are there?

As per the data from Reserve Bank of India’s Official Website, there are 21 Private Indian Banks.

Who gives License to Private Sector Banks in India?

Reserve Bank of India. The bank shall have a minimum net worth of 500 crore rupees at all times.

What are the Top Ten Private Sector Banks in India in terms of Market Capitalization?

Top Ten Ranking As of December 2017

S No Private Banks in India Market Capitalization (Rs. Crore)
01 HDFC Bank 475,442.46
02 ICICI Bank 199,278.83
03 Kotak Mahindra 192,094.99
04 Axis Bank 130,064.95
05 IndusInd Bank 100,121.25
06 YES Bank 71,481.28
07 RBL Bank 21,342.58
08 Federal Bank 21,332.05
09 IDFC Bank 18,236.44
10 City Union Bank 11,836.38

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