Future of international banks in India

India has a highly developed banking market and the size of the largest banks in the country shows this.

Considering the sizeable 1.3 billion population in India, there is quite the scope for banks to make profit.

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According to GlobalData, the banking population is 81% of the country and internet banking penetration lies at 29%. So while the majority of the country is aware of banking services, there is plenty of opportunity in digital solutions.

This could be digital’s time to shine. In 2016, the Indian government decided to cancel the legal tender of INR500 ($7.50) and INR1,000 denomination notes, in an effort to tackle the black money issue.

Those who use online regularly are fans. In RBI’s social media rankings, Indian banks place very highly.

State Bank of India and Yes Bank, both Indian, were the top two in terms of Twitter followers. These two are also top in terms of Instagram followers. State Bank of India was also third when it came to Facebook “Likes”.

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A Yes Bank spokesperson said: “Social media provides a great platform to connect with users around the world and engage with a story-telling approach. Crisis and influencer management are key areas to be focused on with social media to avoid damage to our brand image.”

So what are the largest banks in the country?

The largest banks in India by market cap

  1. HDFC
  2. State Bank of India
  3. ICICI
  4. Axis Bank
  5. IndusInd Bank
  6. Yes Bank
  7. IDBI Bank

HDFC

HDFC Bank as of 2018 has a $79.9bn market cap. By that metric, it is the largest bank in India. Its market cap also rose by 12.2% over the last year.

Across India, it holds nearly 5,000 banking outlets, 12,635 ATMs and 43.6 million customers.

It is making a strong start with digital as 85% of all its customers’ transactions go through these solutions.

State Bank of India

As previously mentioned, State Bank of India is a strong digital competitor, ranking high in social media.

Its market cap is currently $33bn, but that dropped 12.2% from 2017. It also has 22,414 branches and 420 million customers worldwide. Outside of market cap, it could argue to be the largest bank in India.

ICICI

ICICI’s market cap for 2018 totalled at $30.9bn, which was an 8.2% increase over the previous year. It made $2.7bn in operating profit in 2018.

Furthermore, it holds 4,867 branches and 14,367 ATMs. However, 95% of transactions from its savings account customers were performed outside of branches.

Axis Bank

Axis Bank performed strongly in 2018 and its market cap showed that as it rose by 22.9% to hit $24.7bn.

IndusInd Bank

IndusInd Bank made an effort to increase its network in 2018 and now has 1,400 branches, 2,303 ATMs and is present in 713 geographic locations.

In terms of market cap, it totals $12.9bn, an 8% rise from the previous year.

Yes Bank

Another social media titan, Yes Bank’s market cap totals at $7.2bn, but this took a massive drop of 35.7% from last year.

In India, it has 1,100 branches and 1,724 ATMs.

For inclusion, Yes Bank teamed up with the Maharashtra government to onboard ration shops as provider of basic banking services.

The initiative, conducted under Maharashtra government’s e-PDS state programme, will cover nearly 40% of the state’s fair price shops.

Customers at these shops can make small-value cash deposits into any bank account including domestic remittances. Besides, they can make withdrawals from any bank account using Aadhaar Enabled Payment System.

IDBI

IDBI had a markert cap of $4.8bn in 2018, but like Yes bank, it took a significant rop over the year. Over 2017, the value of its market cap fell by 27.5%.

There are plenty of banks to choose from in India and all are trying to entice customers on both fronts. The largest banks in India have both sizeable branch numbers and online presences. It can’t be soon until the internet banking penetration rate lies at 100%.