Me

The private sector banks have made tremendous strides in the last few years. It was in mid 1990's when Indian banking scenario witnessed the entry of some new private sector banks and in the period between 2002 -2007 these banks have grown by leaps and bounds. They have increased their incomes, asset sizes and outperformed their public sector counterparts in many areas.

This growth was accompanied by a rapid branch expansion. The network of private sector bank grew at almost three times of all scheduled commercial banks and more than four times that of public sector banks (refer to the table below). The star performers among these banks were the Centurion Bank of Punjab (CBoP), HDFC Bank, ICICI Bank, and the Axis Bank (formerly UTI Bank). These big four expanded their branch network at a rapid rate of 14-16 percent per annum in terms of compound growth rates.

Another trend in the banking sector during this period was the increase in staff strength by private sector banks, while the public sector banks witnessed a decline in the number of employees. The private sector banks recorded a compounded growth of 24% in their staff strength. The decline in public sector bank staff can be attributed to restructuring and adoption of IT infrastructure.

Private sector recorded a growth ranging from 30% to 68% in terms of capital, reserves and surplus. The deposits increased in the range of 32% to 51%, while the advances showed a growth trend between 39% to 71%. The net profits by private sector banks recorded a compound annual growth of 27% to 36%. The table below shows the progress of private sector banks:

Operations of Private Sector Banks: Progress

Item

2002-03

2003-04

2004-05

2005-06

2006-07

Compound growth (%)

1

2

3

4

5

6

7

No. of branches

Centurion Bank of Punjab 62

63

77

242

279

45.6

HDFC Bank 215

295

446

515

638

31.2

ICICI Bank 392

419

515

569

713

16.1

UTI Bank/Axis Bank 137

185

250

352

501

38.3

All Private Sector Banks 5,592

5,950

6,453

6,813

7,363

7.1

All Public Sector Banks 47,963

48,299

48,970

49,817

51,392

1.7

All Scheduled Commercial Banks 53,768

54,474

55,669

56,893

59,031

2.4

No. of employees

Centurion Bank of Punjab 945

1112

1,374

4,471

14,458

97.8

HDFC Bank 4,791

5673

9,030

14,878

21,477

45.5

ICICI Bank 11,544

13,609

18,029

25,384

33,321

30.3

UTI Bank/Axis Bank 2,338

3,447

4,761

6,553

9,980

43.7

All Private Sector Banks 59,374

81,120

90,530

110,505

139,285

23.8

All