Top 7 Commercial Banks in India & How They Operate

In this blog post, we will talk about the 10 largest commercial banks in India. A commercial bank is a type of bank that is primarily focused on lending and financial services to businesses. They are also usually larger than retail banking institutions, which focus more on personal customers. There’s been an increased demand for these types of banks because there’s been a lot of growth in the Indian economy over the past decade.

As per stats from the Reserve Bank of India, India has the highest number of commercial banks globally. India has 23 public sector banks, 27 private commercial banks, and 56 regional rural banking companies (RRBs).

The largest Indian Commercial Bank by assets as of 31 March 2021 is India’s government-owned State bank. Let us take a look at all the top ten largest commercial banks in India.

The list of the top-ten Indian Commercial Banks is as follows:

State Bank of India (SBI)

SBI is the largest bank in India, with a market share of 23 percent by assets and 25% according to total loans and deposits. State Bank of India is a government-owned bank, with headquarters in Mumbai.

SBI has an international presence across 36 countries and is the most extensive banking institution in India by assets and the number of customers. The bank has a network of over 15,000 ATMs. Nearly 30 million customers can avail of its online banking services through the internet or mobile app.

Also, read – How to activate SBI debit card

ICICI Bank

The second-largest Indian Commercial Bank is ICICI (Industrial Credit & Investment Corporation). It was founded in 1994 by KV Kamath as part-time Chairman. ICICI Bank in India has got its registered office in Vadodara, Gujarat, and a corporate office in Mumbai, Maharashtra. It has subsidiaries in 18 countries across the globe. ICCI Bank has a market share of 15% by assets and 16 % according to total loans, deposits & advances.

HDFC Bank

The third-largest Indian Commercial bank is HDFC (Housing Development Finance Corporation). It was founded on July 22nd, 1977 with the objective “to provide long term finance to individuals and businesses. It has its registered office in Mumbai, Maharashtra and corporate headquarters at Mumbai. HDFC Bank is the largest mortgage lender with a market share of 18% by assets

The bank’s total loans & advances are 17%. It also offers financial services such as investment banking (HDB Financial Services), and asset management (Housing Development Finance Corporation Asset Management Company).

The total market share of the bank is 12% by assets.

HDFC Bank has a total of 11,000+ branches and over 20000 ATMs in India and abroad.

Kotak Mahindra Bank

Another large commercial bank in India is Kotak Mahindra Bank. It was established in 1985. It has its registered office in Mumbai, Maharashtra, and corporate headquarters located at Pune (Maharashtra). The bank’s total loans & advances are 16%. Kotak Mahindra Bank offers financial services such as investment banking (Kotak Securities) and an asset management company. The total number of branches is over 1800.

The total market share of the bank by assets in India was 12% as of 31 March, which has increased from 11%.

Bank of Baroda

Next on the list of largest commercial banks in India is the Bank of Baroda. It was established in 1908 and has its registered office at Vadodara, Gujarat (India).

The bank’s total loans & advances are 18%. This is a public sector bank owned by the government. 

Bank Of Baroda offers financial services such as investment banking through a subsidiary company, which is based out of Mumbai, and an asset management firm named BOB Asset Management.

Axis Bank

Another well-known commercial bank in India is Axis Bank. It was established in the year 1994 and has its registered office at Ahmedabad, Gujarat (India).

The bank’s total loans & advances are 18%. The company offers a wide range of financial services such as investment banking through Axis Capital. It also provides an asset management service called AXIS Mutual Fund Services Limited, which is based out of Mumbai with over Rs 23000 crore of funds.

The number of branches of Axis Bank in India is more than 2000.

The bank has a vast network of branches in India and abroad, with over 700 offices across 19 countries including the United States (US), China & Singapore.

Indusind Bank

Next on the list of top commercial banks in India is Indusind Bank.

It was established in 1999 and has its registered office in Mumbai, Maharashtra (India). The bank’s total loans & advances are 20%.

Financial services offered by Indusind Bank include investment banking through Securities which is based out of Gurgaon with over Rs 8000 crore funds under management.

One good thing about Induind bank is that it is a leading player in the real estate banking sector.

The bank has a wide network of branches in India and abroad, with over 700 offices across 19 countries, including the United States (US), China & Singapore. The bank offers its services through online banking as well which is available 24×365 on the Indusind Internet Banking portal or mobile app for customers to transact anytime, anywhere.

Above mentioned commercial banks are the largest in India. With a good market share, these banks compete with each other to serve more people and earn more profits.

Types of commercial banks in India

While a commercial bank is a financial institution whose main purpose is to earn profits, there are further three types of commercial banks. These 3 types are:

Public Sector Banks – Public sector banks are the ones that are owned by the government. They offer a range of products and services to customers, including loans for agriculture & industry, business, and individual personal needs.

An example of a commercial bank in India that comes under the public sector is the State Bank of India.

Private Sector Banks – Private sector banks are the ones that are not owned by the government. These are owned by a company and are governed by the Reserve Bank of India.

The best example of a private commercial bank in India is ICICI Bank or Axis Bank.

Foreign Banks – The banks that have their headquarters outside of India come under the category of foreign banks. These banks can do business in the country and serve the people of India with their financial services.

Bank of America is an American bank but has a branch in Mumbai. This is the best example of a foreign commercial bank in India.

How Indian Commercial Banks Earn Profits?

One significant way commercial banks in India earn profits is through the difference in loan interests of lenders and borrowers. Let us thoroughly understand this.

If you go to a bank to take a loan, the bank charges an interest of 14%. On the other hand, if you deposit money in a fixed deposit, the bank pays you 7% interest. You see, there is a difference of 7% and this directly goes to the profits of the bank.

Through this article, I hope that I was able to explain to you what commercial banks are and give you a list of the top commercial banks in India.

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