Private Sector Banks in India - A SWOT Analysis

Prasad, Chowdari and Rao, K S Srinivasa (2004) Private Sector Banks in India - A SWOT Analysis. TAPMI, Manipal.


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Private Sector Banks existed for over a century in India. Fonnation of State Bank Group in 1955 / 1957 and two nationalizations in 1969 and 1980 lead to dominant Public Sector Banks. Economic reforms in 1991 and Banking Sector Refonns changed the scene totally. People generally rely on nationalized banks backed by Government. Change in mindset of the customers forced RBI to allow new private banks a decade back. WTO and globalization initiated more foreign banks to add competition. Among the thirty Private Banks, we have 21 old and 9 new banks which are able to sustain the competition. But, one question that arises is how much reliable these private banks are inspite of their efficiency due to recent experience of Global Trust Bank failure. Better professional management techniques adopted by the ICICI Bank made it as number one, inspiteofrumourstwoyearsback(BestBank- BusinessIndia,16-29,August,2004). Perhaps the best indicator of banking industry's health is the levels of Non-Perfonning Assets. Indian banks seem to be quite healthy now. At least one bank - Oriental Bank of Commerce -is a zero-net NPA bank, while five other listed banks (Andhra Bank, HDFC Bank, IDBI Bank, Kotak Mahindra Bank and Vijaya Bank) have less than 1 per cent net NPAs as on March 31, 2004. Private sector banks are more closely scrutinized for any weakness by RBI. Going forward, stressed out banks will be absorbed by more profitable banks, reducing the number of banks operating in India. More banking related products will be available from a singlesource and greater accessibility to funds raised in the market can be achieved by such intervention. This made the authors to think of using SWOT Analysis and appropriate Statistical techniques to establish the efficiency of private sector banks in India.

Item Type: TAPMI Working Papers
Subjects: Finance
Divisions: Finance and Strategy
Depositing User: Ms. Vanitha K
Date Deposited: 17 Nov 2018 05:00
Last Modified: 25 Nov 2018 14:45

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