Private-sector banks in India

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The private-sector banks in India represent part of the indian banking sector that is made up of both private and public sector banks. The "private-sector banks" are banks where greater parts of state or equity are held by the private shareholders and not by government.

Banking in India has been dominated by public sector banks since the 1969 when all major banks were nationalised by the Indian government. However, since liberalisation in government banking policy in the 1990s, old and new private sector banks have re-emerged. They have grown faster & bigger over the two decades since liberalisation using the latest technology, providing contemporary innovations and monetary tools and techniques.[1]

The private sector banks are split into two groups by financial regulators in India, old and new. The old private sector banks existed prior to the nationalisation in 1969 and kept their independence because they were either too small or specialist to be included in nationalisation. The new private sector banks are those that have gained their banking license since the liberalisation in the 1990s.

Old private-sector banks[edit]

The banks, which were not nationalized at the time of bank nationalization that took place during 1969 and 1980 are known to be the old private-sector banks. These were not nationalized, because of their small size and regional focus.[2] Most of the old private-sector banks are closely held by certain communities their operations are mostly restricted to the areas in and around their place of origin. Their Board of directors mainly consist of locally prominent personalities from trade and business circles. One of the positive points of these banks is that, they lean heavily on service and technology and as such, they are likely to attract more business in days to come with the restructuring of the industry round the corner.

List of the old private-sector banks in India[edit]

Name Year established
1. Bank of punjab merged with Centurion Bank to form Centurion Bank of Punjab in June 2005 1943
2. City Union Bank 1904
3. Dhanlaxmi Bank 1927
4. Federal Bank 1931
5. ING Vysya Bank Merged with kotak Mahindra bank 1930
6. Jammu and Kashmir Bank 1938
7. Karnataka Bank 1924
8. Karur Vysya Bank 1916
9. Lakshmi Vilas Bank 1926
10. Nainital Bank ( Wholly owned subsidiary of Bank Of Baroda) 1922
11. SBI Commercial and international Bank 1955
12. South Indian Bank 1929
13. Tamilnad Mercantile Bank 1921
14. RBL Bank 1943
15. IDB Bank Ltd (reverse merged with parent IDBI in 2004 to become IDBI Bank. Making this public sector bank private) 1964

New private-sector banks[edit]

The banks, which came in operation after 1991, with the introduction of economic reforms and financial sector reforms are called "new private-sector banks". Banking regulation act was then amended in 1993, which permitted the entry of new private-sector banks in the Indian banking s sector. However, there were certain criteria set for the establishment of the new private-sector banks, some of those criteria being:#The bank should have a minimum net worth of Rs. 200 crores.

  1. The promoters holding should be a minimum of 25% of the paid-up capital.
  2. Reliance Capital, India Post, Larsen & Toubro, Shriram Transport Finance are companies pending a banking license with the RBI under the new policy, while IDFC & Bandhan were given a go ahead to start banking services for 2015.
  3. Within 3 years of the starting of the operations, the bank should offer shares to public and their net worth must increased to 300 crores.[3]

List of the new private-sector banks in India[edit]

Name Year
1. Axis Bank (earlier UTI Bank) 1994
2. Bank of Punjab (actually an old generation private bank since it was not founded under post-1993 new bank licensing regime) 1989
3. Centurion Bank Ltd. (Merged Bank of Punjab in late 2005 to become Centurion Bank of Punjab, acquired by HDFC Bank Ltd. in 2008) 1994
4. Development Credit Bank (Converted from Co-operative Bank, now DCB Bank Ltd.) 1995
5. ICICI Bank (previously ICICI and then both merged;total merger SCICI+ICICI+ICICI Bank Ltd) 1996
6. IndusInd Bank 1994
7. Kotak Mahindra Bank 2003
8. Yes Bank 2005
10. Times Bank (Merged with HDFC Bank Ltd.) 2000
11. Global Trust Bank (India) (Merged with Oriental Bank of Commerce) 1994
12. Balaji Corporation Limited - Private Loan Company, not a Bank 2010
13. HDFC bank 1994
14. Bandhan bank 2015
15. IDFC Bank 2015
16. Karnataka Bank
18. Jammu and Kashmir Bank
19. Karur Vysya Bank
20. South Indian Bank
21. Yes Bank


  1. ^ "Introduction to private sector banks". Retrieved 10-09-2011.  Check date values in: |access-date= (help)
  2. ^ "Nationalization of Banks". 
  3. ^ "Criteria set for the new private sector banks" (PDF).