India's banking industry
is anticipated to project robust growth in the forecast period on account of
the surging population base of India, digital banking experience, rising
awareness for systematic loans and subsidized interest rates.
The RBI is in charge of
India's banking system, which consists of cooperative and commercial banks.
Scheduled Commercial Banks (SCBs) and Non-Scheduled Commercial Banks are both
classified as commercial banks. While cooperative banks include both urban and
rural lenders. SCBs are further divided into private, public, and foreign banks
as well as Regional Rural Banks (RRBs).
In India, Public Sector
Banks (PSBs) is a significant category of government-owned banks. The Ministry
of Finance of the Government of India or state ministries of finance of various
state governments hold a majority stake (> 50%). In India, public sector banks
predominate in loan issuance and deposit collection, though competition has
grown significantly over time as the private sector and foreign banks have
emerged.
The majority of the
remaining deposits were held by private sector banks, with public sector banks
(PSBs) accounting for roughly 70% of the total. Furthermore, the cooperative
credit institutions of the Indian banking system include 12 public sector
banks, 21 private sector banks, 44 foreign banks, 43 regional rural banks,
1,484 urban cooperative banks, and 96,000 rural cooperative banks.
Bank assets increased in
all sectors in 2020–2022. In March 2022, the total assets of the banking
industry (including public and private sector banks, foreign banks, small
finance banks, and payment banks) rose to USD29.08 billion. The combined assets
of the public and private banking sectors were respectively USD17.05 billion
and USD9.89 billion in 2022. The Public Credit Registry (PCR), a sizable credit
database open to all stakeholders, has been established by RBI. It is
anticipated that the passing of the Insolvency and Bankruptcy Code (Amendment)
Ordinance, 2017 Bill will strengthen the banking industry.
The number of bank
accounts opened as of June 1, 2022, under the government's major initiative for
financial inclusion, "Pradhan Mantri Jan Dhan Yojana (PMJDY)" reached
45.60 crores, with deposits totaling Rs. 1.68 trillion (USD21.56 billion) in
the Jan Dhan bank accountsl. Rising income is anticipated to increase the
demand for banking services in rural areas and, as a result, fuel the sector's
expansion. With 82% of all online lenders worldwide, India has the largest
market for Android-based mobile lending apps. There are currently 887 active
lending apps in India. The way credit is distributed in India will undergo
significant change as a result of the digital payments revolution. After
demonetization, debit cards have largely taken the place of credit cards as the
preferred method of payment in India. Unified Payments Interface (UPI) data
shows that there were 5.95 billion transactions in May 2022 totaling Rs.10.41
trillion (USD 133.46 billion).