About privet banking sector in India

Initially all the banks in India were private banks, which were founded in the pre-
independence era to cater to the banking needs of the people. In 1921, three major banks
i.e. Banks of Bengal, Bank of Bombay, and Bank of Madras, merged to form Imperial
Bank of India. In 1935, the Reserve Bank of India (RBI) was established and it took over
the central banking responsibilities from the Imperial Bank of India, transferring
commercial banking functions completely to IBI. In 1955, after the declaration of first-
five year plan, Imperial Bank of India was subsequently transformed into State Bank of
India (SBI).

Following this, occurred the nationalization of major banks in India on 19 July 1969. The
Government of India issued an ordinance and nationalized the 14 largest commercial
banks of India, including Punjab National Bank (PNB), Allahabad Bank, Canara Bank,
Central Bank of India, etc. Thus, public sector banks revived to take up leading role in
the banking structure. In 1980, the GOI nationalized 6 more commercial banks, with
control over 91% of banking business of India.

In 1994, the Reserve Bank Of India issued a policy of liberalization to license limited
number of private banks, which came to be known as New Generation tech-savvy banks.
Global Trust Bank was, thus, the first private bank after liberalization; it was later
amalgamated with Oriental Bank of Commerce (OBC). Then Housing Development
Finance Corporation Limited (HDFC) became the first (still existing) to receive an 'in
principle' approval from the Reserve Bank of India (RBI) to set up a bank in the private
sector.

At present, Private Banks in India include leading banks like ICICI Banks, ING Vysya
Bank, Jammu & Kashmir Bank, Karnataka Bank, Kotak Mahindra Bank, SBI
Commercial and International Bank, etc. Undoubtedly, being tech-savvy and full of
expertise, private banks have played a major role in the development of Indian banking
industry. They have made banking more efficient and customer friendly. In the process
they have jolted public sector banks out of complacency and forced them to become more
competitive.

Following are the privet banks operating in India

Bank of Punjab:

Bank of Punjab is operating from April 1995 when its first branch was opened in
Chandigarh. By March 1996, its deposit base was Rs. 2342.17 Crores. In 4 years, the
annual growth rose to Rs. 3244.76 which was 200%.

Bank of Punjab is the first bank to focus on retail banking and to introduce faxbanking
and telebanking for its customers.
It has a tie up with Master Card International for its MAESTERO, SWADHAN and
CIRRUS International Card Network.

It has set up Dr. Inderjit Singh Institute of Banking and Insurance Management at
Gurgaon, near Delhi, to provide ideal learning environment banks, insurance and
financial sectors professionals.

Centurion Bank has merged with Bank of Punjab on June 29, 2005 to form Centurion
Bank of Punjab at swap ratio to 4:9. This mean that for every four shares of Bank of
Punjab, its shareholders will receive nine shares of Cunturion Bank.

The following is the pro-forma combined figures as of March 2005:

Branches and ext. Counters 235

ATMs 382
Number of Customers 2.2 million
Net Worth (Rs. Crores) 696
Total Assets 9,395
Deposits (Rs. Crores) 7,837
Operating Profit (Rs. Crores) 43

Bank of Rajasthan:

Bank of Rajasthan was set up at Udaipur in 1943 with an initial capital of Rs.10.00 lacs.
An eminent Industrialist Late Seth Shri Govind Ram Seksaria was the founder Chairman.
It was classified as the Scheduled Bank in 1948. The Bank also established a rural
(Gramin) bank Mewar Anchlik Gramin Bank in Udaipur District in Rajasthan on 26th
January, 1983.

The bank's central office is located at Jaipur, while registered office is in Udaipur.
Presently the bank has 463 branches

Recently BOR has been merged with ICICI Bank. ICICI paid Rs.3000 Crores for it. Each
118 shares of BOR will be converted into 25 shares of ICICI Bank

Catholic Syrian Bank

Catholic Syrian Bank Limited is a private sector bank situated in Thrissur city of Kerala
state in India. Catholic Syrian Bank has 363 branches, 1 extension counter and over 125
ATMs, and a net profit of Rs 36.56 crore in 2007-08 on revenues of Rs 50 crore. Catholic
Syrian Bank has a strong presence in rural India and around 80% of the bank’s branches
are located in the semi-urban and rural areas of India.

The Catholic Syrian Bank was founded on November 26, 1920 in Thrissur city and
commenced business on January 1, 1921 with an authorised capital of Rs 5 lakhs and a
paid up capital of Rs 4,5270. In August 1969, the bank was included in the Second
Schedule to the Reserve Bank of India Act 1934. In 1975, the bank attained the status of
"A" Class Scheduled Bank when its total deposits crossed Rs 25 crores

Merger with federal bank:

Aluva-based Federal Bank in 2008 has proposed the merger with CSB. The other largest
shareholder in CSB is Thailand-based NRI, Surachan Chawla with a 21% stake. After the
Reserve Bank of India’s mandate to bring down his stake to 10% per cent, Chawla
reduced his exposure to 21% in 2008 from 34 per cent in 1994. While Federal Bank and
L&T hold 5% each, a group of local investors hold close to 14%, the Mauritius-based
AIF Capital India owns 15%, Edelweiss has 2% and the rest is held by the public. Chawla
has also agreed to sell his stake to Federal Bank, but the value is not known. Chawla and
AIF Capital Development have one man each on the eleven member board.[4] Federal
Bank had mandated KPMG to conduct a financial due-diligence in September, 2009 to
consider the merger proposal between the banks. It is learnt that KPMG valued CSB at a
little over Rs 400 crore, on the basis of which Federal Bank made an offer. In 2010,
official in the CSB close to the development said that any hopes of a merger can be given
a burial after due to differences over valuation

The Centurion Bank of Punjab

The Centurion Bank of Punjab (formerly Centurion Bank) was an Indian private-sector
bank that provided retail and corporate banking services. It operated on a strong
nationwide franchise of 403 branches and had over 5,000 employees. The Bank's
shares were listed on the major Indian stock exchangesand on the Luxembourg Stock
Exchange.

On 23 May 2008 HDFC Bank acquired Centurion Bank of Punjab

City Union Bank

City Union Bank is an Indian bank, earlier known as 'The Kumbakonam Bank Ltd.' It
was incorporated as a limited company on 31st October, 1904. It was included in the
Second Schedule of RBI Act of 1934 on 22nd March 1945. The first branch of the
Bank was opened at Mannargudi on 24th Jan.'1930. The Bank took over the assets
and liabilities of the Commonwealth Bank Limited in 1957 at Aduthurai, Kodavasal,
 Valangaiman, Jayankondacholapuram and Ariyalur Branches. The City Forward
Bank Limited and The Union Bank Limited were also amalgamated in April, 1965.
In the same year the name was also changed to The Kumbakonam City Union Bank
Limited.

Dhanalakshmi Bank
Dhanalakshmi Bank Ltd is an old private sector bank headquartered in Thrissur city,
Kerala, the "Cultural Capital of Kerala". It is headed by Amitabh Chaturvedi,
Managing Director and CEO of the bank. The bank is focusing mostly on Southern
states like Karnataka, Tamil Nadu, Andhra Pradesh and Kerala. In 2009, bank started
a brand transformation initiative which will include changing the logo and related
branding treatment across all its customer touch-points.

Dhanalakshmi Bank Ltd was incorporated on 14th November 1927 by a group of

enterprising entrepreneurs at Thrissur city, the "Cultural Capital of Kerala" with a
capital of Rs 11,000 and 7 employees. It became a Scheduled Commercial Bank in
the year 1977. It has today attained national stature with 181 branches and 26
Extension Counters spread over the states of Kerala, Tamil Nadu, Karnataka, Andhra
Pradesh, Maharashtra, Gujarat, Delhi and West Bengal. in 2010 they were started the
six branch in Gujarat[vadodata, ahmedabad veraval palanpur bardoli

The Dhanalakshmi Bank serviced a business of Rs 8,212 crore as on 31.03.2009

comprising deposits of Rs 4,969 crore and advances of Rs 3,243 crore. The bank
made a net profit of Rs 57.45 crore for the year ended 31st March 2009. The Capital
Adequacy Ratio of the Bank as on 31.03.2009 was 14.44% (Basel I) and 15.38%
(Basel II) and its networth exceeded Rs 400 crore as on that date. The bank’s
business growth rates during the year 2008-09 far exceeded that of the banking
industry.

The Dhanalakshmi Bank has deployed technology widely as an instrument for enhancing
the quality of customer service. It has introduced Centralised Banking Solution
(CBS) on the Flexcube Platform at all its branches for extending
anywhere/anytime/anyhow banking to its clientele through multiple delivery
channels. The bank has set-up a state-of-the-art Data Centre in Bangalore, to keep
the networked system operational round the clock. A Disaster Recovery Centre is
also operational at Thrissur for meeting various contingencies.

Development Credit Bank

A new generation private sector bank, Development Credit Bank (DCB) is the preferred
banking services provider across 80 state-of-the-art branches across 10 states and
two union territories. The Bank has recently launched several value added initiatives
 and intends to become one of the country’s preferred and profitable private sector
banks, providing a comprehensive suite of “best in class” products for customers in
Retail, SME and Corporate Banking market segments in chosen geographies.

DCB has deep roots in India since its inception in the 1930’s. Its promoter the Aga Khan
Fund for Economic Development (AKFED) holds over 23% stake. AKFED is an
international development agency dedicated to promoting entrepreneurship and
building economically sound enterprises in the developing world. It had co-promoted
HDFC in India in the late seventies. AKFED operates as a network of affiliates
comprising 90 separate project companies. Employing over 30,000 people, it
reported annual revenues in excess of US$1.5 billion. The Fund is active in 16
countries in the developing world.

Federal Bank
In 1931, Kulangara Paulo Hormis established the Travancore Federal Bank at
Nedumpuram, a place near Tiruvalla in Central Travancore. After initial moderate
success, the bank came to the verge of bankruptcy. In 1944, K P Hormis ,and his
close relatives and friends obtained a controlling interest in the bank. The next year,
the bank shifted its registered office to Aluva and the Bank commenced business by
opening its first branch at Aluva. In 1947 it changed its name to Federal Bank.

In 1964, the bank embarked on a series of acquisitions that would substantially increase
its size. It acquired the Chalakudy Public Bank in Chalakudy, the Cochin Union
Bank in Trichur, and the Alleppey Bank in Alleppey. The next year it acquired the
St.George Union Bank in Puthenpally. Lastly, in 1968, it acquired the Marthandom
Commercial Bank in Trivandrum.

In 1970, the bank became a Scheduled Commercial Bank.

In 2006, Federal Bank acquired Ganesh Bank of Kurundwad after the Reserve Bank of
India suspended the bank. Established in 1920, Ganesh Bank had its headquarters at
Kurundwad, Maharashtra. The bank had a network of 32 branches and its operations
were concentrated in Sangli and Kolhapur in Maharashatra and Belgaum in
Karnataka. Prior to the merger, Federal Bank had 20 branches in Maharashtra.

Recently, it opened a representative office in Dubai. In March 2008, Federal Bank

entered into a joint venture with IDBI Bank and Fortis Insurance International to
form IDBI Fortis Life Insurance, of which Federal Bank owns 26 percent. The
company ended the year with over 300 Cr in premiums as on 31 March 2009.

As of 2008 it had 674 branches and 681 ATMs around the country.
HDFC Bank
HDFC Bank Ltd. (BSE: 500180, NYSE: HDB) is a major Indian financial services
company based in Mumbai, incorporated in August 1994, after the Reserve Bank of
India allowed establishing private sector banks. The Bank was promoted by the
Housing Development Finance Corporation, a premier housing finance company (set
up in 1977) of India. HDFC Bank has 1,725 branches and over 4,232 ATMs, in 779
cities in India, and all branches of the bank are linked on an online real-time basis.
As of September 30, 2008 the bank had total assets of INR 1006.82 billion.[4] For
the fiscal year 2008-09, the bank has reported net profit of Rs.2,244.9 crore, up 41%
from the previous fiscal. Total annual earnings of the bank increased by 58%
reaching at Rs.19,622.8 crore in 2008-09

HDFC Bank was incorporated in the year of 1994 by Housing Development Finance
Corporation Limited (HDFC), India's premier housing finance company. It was
among the first companies to receive an 'in principle' approval from the Reserve
Bank of India (RBI) to set up a bank in the private sector.The Bank commenced its
operations as a Scheduled Commercial Bank in January 1995 with the help of RBI's
liberalization policies.

In a milestone transaction in the Indian banking industry, Times Bank Limited (promoted
by Bennett, Coleman & Co. / Times Group) was merged with HDFC Bank Ltd., in
2000. This was the first merger of two private banks in India. As per the scheme of
amalgamation approved by the shareholders of both banks and the Reserve Bank of
India, shareholders of Times Bank received 1 share of HDFC Bank for every 5.75
shares of Times Bank.

In 2008 HDFC Bank acquired Centurion Bank of Punjab taking its total branches to more
than 1,000. The amalgamated bank emerged with a strong deposit base of around Rs.
1,22,000 crore and net advances of around Rs. 89,000 crore. The balance sheet size
of the combined entity is over Rs. 1,63,000 crore. The amalgamation added
significant value to HDFC Bank in terms of increased branch network, geographic
reach, and customer base, and a bigger pool of skilled manpower.

ICICI Bank
ICICI Bank (formerly Industrial Credit and Investment Corporation of India) is a major
banking and financial services organization in India. It is the 4th largest bank in India
and the largest private sector bank in India by market capitalization. The bank also
has a network of 2,016 branches (as on 31 March 2010) and about 5,219 ATMs in
India and presence in 18 countries, as well as some 24 million customers (at the end
of July 2007). ICICI Bank offers a wide range of banking products and financial
services to corporate and retail customers through a variety of delivery channels and
specialization subsidiaries and affiliates in the areas of investment banking, life and
non-life insurance, venture capital and asset management. (These data are dynamic.)
 ICICI Bank is also the largest issuer of credit cards in India. ICICI Bank's shares are
listed on the stock exchanges at Kolkata and Vadodara, Mumbai and the National
Stock Exchange of India Limited; its ADRs trade on the New York Stock Exchange
(NYSE).

The Bank is expanding in overseas markets and has the largest international balance sheet
among Indian banks. ICICI Bank now has wholly-owned subsidiaries, branches and
representatives offices in 19 countries, including an offshore unit in Mumbai. This
includes wholly owned subsidiaries in Canada, Russia and the UK (the subsidiary
through which the HiSAVE savings brand is operated), offshore banking units in
Bahrain and Singapore, an advisory branch in Dubai, branches in Belgium, Hong
Kong and Sri Lanka, and representative offices in Bangladesh, China, Malaysia,
Indonesia, South Africa, Thailand, the United Arab Emirates and USA. Overseas, the
Bank is targeting the NRI (Non-Resident Indian) population in particular.

ICICI reported a 1.15% rise in net profit to Rs. 1,014.21 crore on a 1.29% increase in
total income to Rs. 9,712.31 crore in Q2 September 2008 over Q2 September 2007.
The bank's CASA ratio increased to 30% in 2008 from 25% in 2007.

ICICI Bank is one of the Big Four Banks of India, along with State Bank of India, Axis
Bank and HDFC Bank — its main competitors.

IndusInd Bank
IndusInd Bank Limited is a Mumbai based Indian new generation bank,[1][2] established
in 1994. The bank offers commercial, transactional and electronic banking products and
services. Indusind Bank was incorporated in April 1994 by Dr. Manmohan Singh the then
Union Finance Minister. Indusind Bank is the first among the new-generation private
banks in India.

The bank started its operations with a capital amount of Rs.1,000 million among which
Rs.600 million was donated by the Indian Residents and Rs.400 million was raised by the
Non-Resident Indians. The bank has specialized in retail banking services and
continuously upgrades its support systems by introducing newer technologies. It is also
working on expanding its network of branches all across the country along with meeting
the global benchmark. According to the bank, its name is derived from the rich and vivid
Indus Valley Civilisation.
ING Vysya Bank
Vysya Bank was established in 1930, in Bangalore (now Bengaluru) with the aim of
offering banking services to those who were currently not privileged enough to do so. In
1948 Vysya Bank became a scheduled bank. On 7 October 2002 ING Group took over
the Management of the Bank. ING Vysya Bank currently has about 470 branches spread
all over India. ING Vysya Bank Limited, is an Indian retail bank, formed after the global
financial institution ING acquired a 44% stake in Vysya Bank Ltd in October 2002, and
took over management of the bank.

Jammu & Kashmir Bank Ltd.

The Jammu & Kashmir Bank was founded on October 1 1938 under letters patent issued
by the Maharaja of Kashmir, Hari Singh. The Maharaja invited eminent Kashmiri
investors to become founding directors and shareholders of the bank, the most notable of
which were Abdul Aziz Mantoo, Pesten Gee and the Bhaghat Family, all of whom
acquired major shareholdings.

The Bank commenced business on July 4, 1939 and was considered the first of its nature
and composition as a State owned bank in the country. The Bank was established as a
semi-State Bank with participation in capital by State and the public under the control of
State Government.

The bank had to face serious problems at the time of independence when out of its total
of ten branches two branches of Muzaffarabad, Rawalakot and Mirpur fell to the other
side of the line of control (now Azad Kashmir) along with cash and other assets.
Following the extension of Central laws to the state of Jammu & Kashmir, the bank was
defined as a government company as per the provisions of Indian companies act 1956.

Karnataka Bank
Karnataka Bank Limited is a private sector banking institution based in the town of
Mangalore in Karnataka, India. The Reserve Bank of India has designated Karnataka
Bank as an A-class scheduled commercial bank.

The bank now has a national presence with a network of some 463 branches across 19
states and 2 Union Territories. It has over 4,800 employees and 3.5 million customers,
including farmers and artisans in villages and small towns throughout the country. Its
shares are entirely privately-owned by some 68,942 shareholders.

For the quarter that ended on December 12, 2008, the total interest earned was Rs. 508.4
crores. The total income for the bank was Rs. 607.17 crores and the expenditure, Rs.
468.86 crores, thereby yielding a profit of Rs. 138.31 crores.
The Karnataka Bank has been striving to keep pace with advances in banking technology
by adopting Core banking and Internet banking, and establishing its MoneyPlant
Automated Teller Machine system

In August 2008, Karnataka Bank received the Sun and NDTV Green IT Award. Sun
Microsystems and NDTV gave the award to Karnataka Bank in recognition of the bank's
"green policies" and use of earth-friendly technology such as solar power

Laxmi Vilas Bank

The Lakshmi Vilas Bank Limited (LVB) was founded eight decades ago ( in 1926) by
seven people of Karur under the leadership of Shri V.S.N. Ramalinga Chettiar, mainly to
cater to the financial needs of varied customer segments. The bank was incorporated on
November 03, 1926 under the Indian Companies Act, 1913 and obtained the certificate to
commence business on November 10, 1926, The Bank obtained its license from RBI in
June 1958 and in August 1958 it became a Scheduled Commercial Bank.

During 1961-65 LVB took over nine Banks and raised its branch network considerably.
To meet the emerging challenges in the competitive business world, the bank started
expanding its boundaries beyond Tamil Nadu from 1974 by opening branches in the
neighboring states of Andhra Pradesh, Karnataka, Kerala, Maharashtra, Madhya Pradesh,
Gujarat, West Bengal, Uttar Pradesh, Delhi and Pondicherry. Mechanization was
introduced in the Head office of the Bank as early as 1977. At present, with a network of
273 branches,1 satellite branch and 8 extension counters, spread over 16 states and the
union territory of Pondicherry, the Bank's focus is on customer delight, by maintaining
high standards of customer service and amidst all these new challenges, the bank is
progressing admirably. LVB has a strong and wide base in the state of Tamil Nadu, one
of the progressive states in the country, which is politically stable and has a vibrant
industrial environment. LVB has been focusing on retail banking, corporate banking and
banc assurance.

The Bank's business crossed Rs. 12,606 Crores as on March 31, 2009. The Bank earned a
Net profit of Rs. 50.30 Crores. The Net owned Funds of the Bank reaches Rs. 453.70
Crores. With a fairly good quality of loan assets the Net NPA of the bank was pegged at
1.24 % as on March 31, 2009.

South Indian Bank

South Indian Bank Limited (SIB) is a private sector bank headquartered at Thrissur in
Kerala, India. It is headed by Dr.V A Joseph, Managing Director & CEO of the bank.
South Indian Bank has 580 branches and 3 extension counters spread across more than 26
states and union territories in India. It has set up 375 ATMs all over India. In the current
year 2010-11, the bank is planning to add 60 more branches throughout India which aims
in having presence in all the states of India. The current growth plan of the bank is to
establish 750 branches, 750 ATMs and 75000 crores of business by the end of financial
year 2013. The bank offers major services in various segments of accounts and deposits,
loans, mutual funds, insurance, money transfers and other value added services. The
Kerala Government had given permission to SIB to accept commercial taxes. The bank
has been appointed as the largest service provider (point of sale) for the New Pension
Scheme (India) launched by the Government of India.

South Indian Bank was formed on the 29th January 1929 by a group of 44 enterprising
men, who with a capital of only Rs 22,000.00, joined together at Thrissur city to liberate
the business community from the clutches of greedy money lenders.The bank received
very good support from the public at large. Initially the growth was slow but steady. The
number of branches opened each year testified its stability and popularity. It was included
in the second schedule of the Reserve Bank of India and became a scheduled Bank on 07-
08-1946. SIB was the first scheduled Bank in the private sector in Kerala to get the
licence under section 22 of the Banking Regulation Act 1949 from RBI on 17-06-1957.
The bank gained the confidence and received the patronage of the public in increasing
measure over the years and in the 1960s when there was a crisis in the banking industry
in Kerala, South Indian Bank took over fifteen other smaller banks.

AXIS Bank
Axis Bank, formally UTI Bank, is a financial services firm that had begun operations in
1994, after the Government of India allowed new private banks to be established.
The Bank was promoted jointly by the Administrator of the Specified Undertaking of
the Unit Trust of India (UTI-I), Life Insurance Corporation of India (LIC), General
Insurance Corporation Ltd., National Insurance Company Ltd., The New India
Assurance Company, The Oriental Insurance Corporation and United India Insurance
Company UTI-I holds a special position in the Indian capital markets and has
promoted many leading financial institutions in the country. The bank changed its
name to Axis Bank in April 2007 to avoid confusion with other unrelated entities
with similar name. After the Retirement of Mr. P. J. Nayak, Shikha Sharma was
named as the bank's managing director and CEO on 20 April 2009.

As on the year ended March 31, 2009 the Bank had a total income of Rs 13,745.04 crore
(US$ 2.93 billion) and a net profit of Rs. 1,812.93 crore (US$ 386.15 million).

On February 24, 2010, Axis Bank announced the launch of 'AXIS CALL & PAY on
atom', a unique mobile payments solution using Axis Bank debit cards. Axis Bank is
the first bank in the country to provide a secure debit card-based payment service
over IVR.

At the end of October 2009, The Bank has a very wide network of more than 1000
branches and Extension Counters (as on 31st March 2010).The Bank has a network
of over 4055 ATMs (as on 31st March 2010). The Bank has loans now (as of June
2007) account for as much as 70 per cent of the bank’s total loan book of Rs
 2,00,000 crore. For HDFC Bank, retail assets are around 57 per cent (Rs 28,000
crore) of the total loans as of March 2007.

In the case of Axis Bank, retail loans have declined from 30 per cent of the total loan
book of Rs 25,800 crore in June 2006 to around 23 per cent of loan book of
Rs.41,280 crore (as of June 2007). Even over a longer period, while the overall asset
growth for Axis Bank has been quite high and has matched that of the other banks,
retail exposures grew at a slower pace.

If the sharp decline in the retail asset book in the past year in the case of Axis Bank is part
of a deliberate business strategy, this could have significant implications (not
necessarily negative) for the overall future profitability of the business.

Despite the slower growth of the retail book over a period of time and the outright decline
seen in the past year, the bank’s fundamentals are quite resilient. With the high level
of mid-corporate and wholesale corporate lending the bank has been doing, one
would have expected the net interest margins to have been under greater pressure.
The bank, though, appears to have insulated such pressures. Interest margins, while
they have declined from the 3.15 per cent seen in 2003-04, are still hovering close to
the 3 per cent mark. (The comparable margins for ICICI Bank and HDFC Bank are
around 2.60 per cent and 4 per cent respectively. The margins for ICICI Bank are
lower despite its much larger share of the higher margin retail business, since
funding costs also are higher).