Bank On The Aggression Of Kotak Mahindra

Private banks in India have been darling of investors, especially during last three to four years and the categories include both the foreign and local players.

WHY PRIVATE BANKS ARE GROWING IN INDIA

They have reasons too to justify their liking towards the private players in the banking sector. Private banks as significant players in this industry have performed exceedingly well over the few years and created an impressive amount of wealth for its shareholders who have shown conviction in the private banking growth story in India.

Private banks, particularly those which started in the mid-90s and afterwards are witnessing one of the best period in the history of the industry since RBI opened up the sector.

With public sector banks (PSBs) continuing to struggle with non-performing assets (NPAs) menace, the most interesting aspect that plays out in the favour of the private banks is the subtle and swift shifting of deposits and advances from the PSBs to the private banks. Private banks are these days clearly encashing on the PSBs' mistakes and one must say pretty smartly as well.

Several of the key PSBs struggling with bad loans have ceded market share both in deposits as well as credit to rivals in the private sector. There are exceptions though, but just a handful.

Not only are the private banks gaining market share from the slow to negatively growing public sector banks but also these tech savvy private banks are seen snatching the market share from the foreign banks. Private banks are again seen reaping benefits even as few foreign banks halt their loan expansion since the start of 2015 owing to fear of piling up bad assets. Some of them even cut the size of the business and presence in India.