1. India's Best Banks 2011
Bank of Baroda tops the BT-KPMG Best Banks Survey of 2011
Anand Adhikari Edition: Nov 27, 2011
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Downgrade! Downgrade! Like a flu spreading like
IN NUMBERS wildfire from the US to Europe to Asia, the 'D' word is
List of Best Banks in India sending shivers down the spines of pinstriped bankers
around the world. In just over a month, the big three
global ratings agencies have set the alarm bells ringing. Standard & Poor's, or S&P,
lowered the ratings of close to a dozen Spanish financial institutions, including the country's
two biggest banks - Banco Santander and Banco Bilbao Vizcaya Argentaria. Moody's
painted Russia's banking system with a negative bias from stable, and also downgraded
Bank of America's long-term rating by two notches. And Fitch Ratings declared a negative
outlook on Italy's five largest banks.
In fact, even France-based BNP Paribas, the world's largest bank in term of assets at $2.72
trillion, joined the downgrade bash this October when S&P cut its rating by a notch. The
threat of downgrade is also looming large over marquee names such as Morgan Stanley,

2. Goldman Sachs and JPMorgan.
The Winners
BEST LARGE BANK
Bank of Baroda
BEST MID-SIZED BANK
IndusInd Bank
BEST SMALL BANK
JPMorgan Chase
MOST CONSISTENT LARGE BANK
Axis Bank
GROWTH, QUALITY OF ASSETS (LARGE
BANKS)
YES Bank
PRODUCTIVITY & EFFICIENCY (LARGE
BANKS)
IDBI Bank
GROWTH (MID-SIZED BANKS)
Dhanlaxmi Bank
QUALITY OF ASSETS (MID-SIZED BANKS)
Karur Vysya Bank
PRODUCTIVITY & EFFICIENCY (MID-SIZED
BANKS)
City Union Bank
PRODUCTIVITY & EFFICIENCY (SMALL
BANKS)
JPMorgan Chase
GROWTH, QUALITY OF ASSETS (SMALL
BANKS)

3. Mizuho Corporate Bank More from Special
Videos | Pics | Features
QUALITY OF ASSETS (SMALL BANKS) After the subprime lending fiasco,
Bank of America banks find themselves in another
quagmire - the euro debt crisis and
slowdown in credit demand. Only Chinese banks are sitting pretty - ICBC and China
Construction Bank are today the world's largest in terms of market cap - though Hong Kong
banks with high exposure to the mainland are looking more vulnerable.
In India, the country's largest bank, State Bank of India, or SBI, came under Moody's
scanner, which downgraded its perpetual bond ratings by a notch. The downgrade indicates
that India's banking sector is not in the best of health. There are growing concerns on
deteriorating asset quality, capital challenges and issues such as financial inclusion as 50
per cent of the Indian population has no banking access.
Let's take the capital challenges first. There is an estimate that Indian banks will require
more than Rs 10 trillion (one trillion equals 100,000 crore) over the next 10 years to fund
growth requirements. That's a tall order, especially for public sector banks - which control
75 per cent of the Indian banking system - where the government is a reluctant partner
when it comes to pumping in capital. In an interview with BT a few hours after announcing
the 13th interest rate hike in the past one and a half years, Reserve Bank of India, or RBI,
Governor D. Subbarao said that India, being a rapidly transforming economy, will require
more credit than it did in the past. "The capital requirements of banks are going to be more
than we would project from previous history," he said.
The government is also mulling a holding structure for PSU banks - that saves them from
diluting its stake - for allowing them to raise capital. On the asset quality front,
nonperforming assets, or NPAs, are creating a headache with gross NPA figures closing in
on Rs 1 trillion (see In Default Mode, page 84). In this challenging environment, banks have
to make efficient use of capital, write good quality assets, reward shareholders, and play an
integral role in India's economic development.
It is in this context that the 2011 edition of the Business Today-KPMG Best Banks study
was conducted. And not surprisingly, the study has thrown up some, um, surprises. Private
sector major HDFC Bank was the undisputed leader in the BT-KPMG study from 2003 to
2008, but when it pounced on Centurion Bank to acquire size, it lost out on many
performance parameters and the top slot. A public sector bank - Bank of India - rose to the
top in 2009 when the global financial meltdown affected many a bank in the country. A year
later, Axis Bank came out tops.
MUST SEE: Winners in pictures
This year, the country's fifth largest bank, Bank of Baroda, has galloped like a dark horse
to the peak. The bank's rise is made unique by the fact that it did not top in any of the 27
parameters in its group, yet emerged overall winner. Another surprise winner is the
Hindujas owned IndusInd Bank in the mid-sized category .

4. IndusInd's rise to the top is a shot in the arm for corporate houses eyeing the fast-growing
banking sector, including the Tatas, Reliance, Birla and Mahindra. Romesh Sobti, Managing
Director and CEO of IndusInd Bank, says: "A country's GDP funnels through the banking
system. India's growth story will require many more banks to meet its credit needs." Chanda
Kochhar, Managing Director & CEO of ICICI Bank, says India's economic fundamentals
should enable it to average eight per cent real GDP growth over the next several years. To
support this, bank credit would need to grow by about 2.5 times, or 20 per cent, annually.
This means the current non-food credit of about Rs 40 trillion will grow to about Rs 200
trillion by 2020. "This is the kind of scale we have to be ready for if banks are to play the
role they need to play in this growing economy," she says. "I believe these are conservative
estimates; we are basing this projection on India's growth in absolute terms as well as
relative to other markets."
The aspiration is not just size. It is a robust, innovative banking system: Chanda Kochhar
It is no secret that there is ample growth potential. Even as many
argue that metros and urban centres are saturated, there is a strong
view that both will remain twin tracks of future growth. Today, more
and more customers in urban and metro markets are moving toward
Internet banking, ATMs and mobile banking. "This self-directed
population is growing faster than the normal channel," says Rajiv
Sabharwal, Executive Director at ICICI Bank. But the bigger market
would undoubtedly be the hinterland or the unbanked areas, where the competition is
already building up.
Does that mean India's banks will also have to bulk up? "Size and scale are important, but
we should not forget that Indian banking has done remarkably well despite difficult global
conditions," says M.D. Mallya, Chairman of Bank of Baroda. In fact, when it comes to
transactions, SBI claims to be the biggest bank in the world. "We have 250 million accounts
and about 170 million customers," says SBI's Managing Director A. Krishna Kumar. "We
have about 40-45 million transactions daily. The peak was 52 million in March this year."
But these transaction values, when converted into dollars, remain insignificant.

5. We have about 40-45
million transactions
daily. The peak was
52 million in March: A.
Krishna Kumar
But at a time
when central
bankers and
governments
around the world
are striving to
ensure that banks don't become too big to fail, size is certainly going to take a back seat.
"The aspiration is not just size," says ICICI Bank's Kochhar. "It is a robust, innovative
banking system that effectively meets the growth needs of all segments of the Indian
economy."
Ergo, size should be seen together with growth, productivity, efficiency, quality of earnings
and capital adequacy. How well Indian banks are doing on this front is what the BT-KPMG
study captures every year. .
Classified bank :-
ndian banks can be broadly classified into public sector banks (those banks in which the Government of India holds a
stake), private banks (government doe not have a stake in these banks; they may be publicly listed and traded on
stock exchanges) and foreign banks.
Bank Fixed Deposits
Bank Fixed Deposits are also known as Term Deposits. In a Fixed Deposit Account, a certain sum of money is
deposited in the bank for a specified time period with a fixed rate of interest. The rate of interest for Bank Fixed
Deposits depends on the maturity period. It is higher in case of longer maturity period. There is great flexibility in
maturity period and it ranges from 15days to 5 years.
Current Account
Current Account is primarily meant for businessmen, firms, companies, public enterprises etc. that have numerous
daily banking transactions. Current Accounts are cheque operated accounts meant neither for the purpose of earning
interest nor for the purpose of savings but only for convenience of business hence they are non-interest bearing
accounts

6. Demat Account
Demat refers to a dematerialised account. Demat account is just like a bank account where actual money is replaced
by shares. Just as a bank account is required if we want to save money or make cheque payments, we need to open
a demat account in order to buy or sell shares.
Recurring Bank Deposits
Under a Recurring Deposit account (RD account), a specific amount is invested in bank on monthly basis for a fixed
rate of return. The deposit has a fixed tenure, at the end of which the principal sum as well as the interest earned
during that period is returned to the investor.
Reserve Bank of India
The Reserve Bank of India was established on April 1, 1935 in accordance with the provisions of the Reserve Bank of
India Act, 1934. Though initially RBI was privately owned, it was nationalized in 1949. Its central office is in Mumbai
where the Governor of RBI sits.
Savings Bank Account
Savings Bank Accounts are meant to promote the habit of saving among the citizens while allowing them to use their
funds when required. The main advantage of Savings Bank Account is its high liquidity and safety.
Senior Citizen Saving Scheme 2004
The Senior Citizen Saving Scheme 2004 had been introduced by the Government of India for the benefit of senior
citizens who have crossed the age of 60 years. However, under some circumstances the people above 55 years of
age are also eligible to enjoy the benefits of this scheme.
Foreign Banks in India
Foreign banks have brought latest technology and latest banking practices in India. They have helped made Indian
Banking system more competitive and efficient. Government has come up with a road map for expansion of foreign
banks in India.
Nationalised Banks
Nationalised banks dominate the banking system in India. The history of nationalised banks in India dates back to
mid-20th century, when Imperial Bank of India was nationalised (under the SBI Act of 1955) and re-christened as
State Bank of India (SBI) in July 1955.
Private Banks 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.