Public and Private Sector Banks in India [2022 Updated]

In this article, we will understand what are public sector banks and what are private sector banks, what is the difference between both of them, and then we will see the list of major public sector banks and major private sector banks in India. 

First of all, we will understand what is a bank. The bank is basically a financial institution, where people can deposit their money and can also take loans from them when required. Any country’s bank has a major role in bringing financial stability to the economy of that particular country. Almost all countries of this world have a system of banks in their country which are basically organized by the central reserve bank under which all the banks operate and their liquid assets. Talking about the history of banks, the modern banking system started in the 14th century in developed cities of Italy. The main function that any Bank operates is lending in credit and these concepts came from the ancient world.

Different Types of banks

In India basically, there are two types of banks namely private sector banks and public sector banks. In this article, we will understand the difference between private sector banks and public sector banks in terms of their management, organization, and working. Now we will discuss the differences between a private sector bank and a public sector bank.

• Basic conceptual difference – We know that a private sector bank is basically known for high competition and the latest technology superiority. In terms of competition, private sector banks are more competitive where the working professionals are expected to work in a more tough environment and meet tough targets, and also perform above the average to get a good career. In terms of the public sector banks, they are known for better structure in their organization and they have a better customer base in terms of coverage of the market. In a public sector bank, the working environment is less competitive than in a private sector bank. The working professionals in a public sector bank do not have a high target and high pressure.

 

• Working – We all know that working in a public sector bank is very much different from that of a private sector bank. The working can be different in terms of working hours, in terms of levels of competition, and we can say in terms of professional learning also.

 

•  Benefits – Talking about benefits offered by private sector banks and public sector bank is very much different. A candidate who wants to work in a bank has different points in mind before choosing any bank to work in like job security, and the compensation offered by the bank. so these are the factors that fare public sector bank and private sector bank varies very much.

 

• Controlling authority – Private sector bank is basically under the control of any private individual whereas the controlling authority of a public sector bank is the government.

 

• The pattern of shareholding – In a private sector bank, the majority of the stakes are held by any individual or a private corporation whereas in a public sector bank more than 50% of its share are held by the Central Government or the state government.

• Governing law – All the private sector banks functioning in India are basically registered under the Indian companies act whereas all the public sector banks functioning in India are basically formed after the passing of the act in the parliament. we can understand this by taking the example of the State Bank of India which was formed after the act of 1959 and after the bank nationalization act which took place in the year 1970 and in the year 1980.

 

• Regulatory body – We know that the reserve bank of India issues all the rules, regulations, guidelines, and directions for all the private sector banks. Public sector banks also perform under the rules and regulations, guidelines, and directions issued by the Reserve Bank of India which has the authority under the reserve bank of India act 1934 RBI act.

 

• FDI – In terms of private sector banks, they have a higher FDI percentage compared to public sector banks. The private sector bank has an FDI limit of 74 percent whereas the public sector banks have only 20%.

 

• Technology and innovation – All the private sector banks are very much into new technology and innovation. They are constantly working on increasing their effectiveness in terms of working and management whereas public sector banks are a bit slow in getting used to the latest technology and innovation that are taking place.

 

• Branches – All the private sector banks are basically located in the tier one or tier two cities and they have we can say limited access to the rural population whereas public sector banks have spread across the nation in each and every district, every village, and panchayat covering all the population of our country.

 

• Promotion process – In private sector banks, all the promotions take place on the basis of performance and merit. The employees who are performing well will get promotions whereas in public sector banks the promotion is done only on the basis of seniority and performance does not play a very important role in terms of promotion.

List of Public sector banks in India 

 

1. State Bank of India
2. – State Bank of India is one of the largest and best Indian government banks. State Bank of India has 24000 branches spread across the country. State Bank of India has currently 58559 ATMs operating across the whole of India. State Bank was founded in the year 1955 on 1st July. State Bank of India has its headquarters in Mumbai. State Bank of India has a history dating back to more than 200 years which makes it the most trusted bank in India.

 

2. Punjab National Bank – Punjab National Bank was founded in Lahore on the 12th of April 1895 when India was not divided. Punjab National Bank is India’s first Swadeshi bank and has 11437 branches spread across the country. There are 8985 ATMs operating in the whole country and the headquarters of Punjab National Bank is located in New Delhi.

 

3. Bank of Baroda – Bank of Baroda was founded on 20th July 1908. The headquarters of this bank is located in Vadodara Gujarat. There there is a total of 8581 branches and 100318 ATMs operating in the whole country. In the year 2019, the government announced a merger of Dena Bank and Vijaya Bank with Bank of Baroda which was done under the alternative mechanism scheme.

4. Canara Bank – Canara Bank was created in the year 1906. Canara bank has a total of 100391 branches and 12829 ATMs currently operating in India. The headquarter of Canara Bank is located in Bengaluru. Canara Bank was created by Shri Ammembal Subba Rao Pai who was a remarkable thinker and philanthropist.

 

5. Union Bank – Union Bank was founded on 11th November in the year 1919. Right now union Bank has 9500 branches and 13380 in terms of numbers. Union Bank’s headquarter is located in Mumbai. There are more than 120 million happy customers and talking about the revenue is 160 billion dollars. On the first of April 2020, the Union Bank had a merger with the Corporation Bank and Andhra Bank.

 

6. Bank of India – The Bank of India was established on the 7th of September in the year 1906. This bank was nationalized along with 13 other banks. Right now this bank is operating in 18 countries across 5 different continents in the world and earlier this bank was privately owned and controlled. Right now the bank has approximately 6000 branches and 614 ATMs operating in India. The headquarters of the Bank of India is located in Chennai.

 

7. Central Bank of India – The Central Bank of India was established in the year 1918 and it is one of the oldest and largest nationalized commercial banks in our country. Its headquarters is located in Mumbai and talking about the number of branches it has a total of 2876 branches and 466 ATMs right now in India.

 

8. Indian Overseas Bank – Indian Overseas Bank was founded on the 10th of February in the year 1937. This bank was nationalized in the year 1969 along with 13 other major banks. The headquarter of the Indian overseas Bank is located in Chennai and right now Indian overseas Bank has 2995 branches and 3480 operating in India.

 

8. Bank of Maharashtra – Bank of Maharashtra has its headquarters in Pune, Maharashtra. Bank of Maharashtra was founded by VG Kale and DK Sathe. There are a total of 1860 branches and 1897 ATMs operating in India and there are more than 29 million customers of Bank of Maharashtra.

 

10. Punjab and Sind Bank – Punjab and Sind Bank was founded on 24th June in the year 1908 in Amritsar, Punjab. The headquarters of Punjab and Sind Bank is located in New Delhi. Punjab and Sind Bank has 1045 branches and 1554 ATMs operating in India. This bank was founded by Bhai Veer Singh Sir Sundar Singh Majitha and Sardar tar Lochan Singh.

Some major private sector banks in India.

 

1. HDFC Bank – HDFC Bank was founded in the year 1994 and this is the largest and the best private sector bank talking about in terms of assets. HDFC Bank is the 10th largest bank in the world in terms of market value. HDFC Bank has its headquarters in Mumbai. There are a total of 4787 branches and 13514 ATMs in India.

 

2. ICICI Bank – ICICI Bank has its headquarters in Mumbai, Maharashtra and there are a total of 4882 branches and 15159 ATMs operating in India. According to the recent data, the total assets of ICICI Bank are 14.76 trillion rupees.

 

3. Axis Bank – Axis Bank was founded in the year 1994 and this is one of the first new generation private banks in India. There is a total of 4094 branches and 17315 ATMs operating in India. Axis Bank headquarters are located in Mumbai and this is one of the third largest private sector banks in India.

4. IDFC first bank – IDFC first bank began its operations on first October 2015. The headquarters of IDFC’s first bank is located in Mumbai, Maharashtra. There are a total of 301 branches and 216 ATMs operating in India. IDFC first bank is the first bank that has provided a cashless merchant solution that can be linked to Aadhar.

 

5. Kotak Mahindra Bank – Kotak Mahindra Bank was founded in the year 1985. Kotak Mahindra Bank has its headquarters in Mumbai Maharashtra and there are a total of 1369 branches and 2429 ATMs operating in India.

 

6. IndusInd Bank – IndusInd Bank was founded in April in the year 1994. IndusInd Bank has a total of 1004 branches and 2662 ATMs right now operating in India. The headquarters of IndusInd Bank is located in Mumbai Maharashtra.

 

7. IDBI Bank – IDBI bank was established in the year 1964 and it has its headquarters is located in Mumbai Maharashtra there are a total of 1892 branches and 3693 ATMs operating in India right now.

 

8. Federal Bank – The federal bank has its headquarters in Aluva, Kerala and it has a total number of 1252 branches and 1598 ATMs functioning in India right now. The federal bank has more than 10 million happy customers and this is the first bank which has opened its foreign representative office in Abu Dhabi in the year 2008.

 

9. DCB bank – DCB bank got its license for operation on 31st May in the year 1995. The headquarters of DCB bank is located in Mumbai, Maharashtra and it has a total number of 323 branches and 499 ATMs functioning in India right. DCB bank was named by the business world Magna awards 2018 the runner up in the best small bank in India category.

10. Karnataka Bank – Karnataka Bank was founded on the 18th of February in the year 1924 and has been operating since then. Karnataka bank has more than 835 branches functioning right now along with 1503 ATMs in India. The headquarters of Karnataka Bank is located in Mangalore Karnataka. Karnataka Bank is India’s 11th largest private sector bank in terms of old-generation banks and has more than 1 million happy customers across India.

Conclusion

So these are the list of private sector and public sector banks operating in India on a smaller and the larger scale. People living in India have a lot of options to choose from in terms of depositing their money, keeping it safe, getting returns, and other services from the bank. In terms of employment generation also, these banks are on a leading edge and applicants can choose from a variety of options.

It all depends on us what is our needs, requirements, and future goals. The options are available everywhere. We just need to analyze each of them and choose the best out of them.