The financial system, as we all know refers to the borrowing of funds as well as lending the same to various individuals, organisations, and institutions. It is basically comprised of two parts. First one is the money market and the second one is a capital market. The Indian money market is both organised as well as unorganised. The organised sector comprises of the public sector banks, private sector banks, and foreign banks.
The financial system of our nation is undoubtedly very strong. Also, the financial stability of India can be easily judged by the strength of the banking sectors. Some years back when many US banks went into a subprime crisis, other banks also suffered. But, the public sector banks of India remained unscathed. This happened because of the control exercised by the apex bank i.e. The Reserve Bank of India and the strong values that are imbibed in the Indian banks.
Ranking of banks can be done by taking into consideration various factors like the asset quality of bank, the total market capitalisation of banks, overall business of the bank, the revenue earned, etc. The top 10 best public sector banks of India 2018 are as follows.
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10. Indian Overseas Bank
Indian Overseas Bank was established in the year 1937. Primarily this bank is Chennai based and at present, it has about 3397 branches in the whole country. Among all these branches, one-third of them are located in Tamil Nadu. It has also eight branches outside India but within Asia. It is estimated that Indian Overseas bank has a business of nearly 397241 crores. The percentage of the Non-Performing Assets is greatest in comparison to other banks. The estimated percentage is nearly 18%. As such it suffered a massive loss of around 2900 crores in the year 2015-2016.
9. Syndicate Bank
Syndicate Bank was established in the year 1925. This bank is mainly Manipal based i.e. South India based. At present, it has nearly 3859 branches in the whole country and this also includes an overseas branch. The overseas branch is located in London. There are fifty-one regional offices which smoothly control all the business operations of this bank across various parts of the country. This bank has an overall business of 468185 crores. Again the level of the Non-Performing Assets is quite less in comparison to the other commercial banks. The NPA percentage is nearly 7 percent. It also suffered a loss of 1644 crores in the year 2015-2016.
8. IDBI Bank
It is one of the public sector banks that has its headquarter in the city of Mumbai. It was established in the year 1964. At present, it has nearly 1846 branches all throughout India. Industrial Development Bank of India (IDBI) carries out the business of nearly 481615 crores. The Non-Performing Asset position is relatively is relatively high. It is estimated to be around 11.53%. On account of this IDBI has incurred a loss of around 3670 crores in the financial year 2015-2016.
7. Central Bank of India
It is one of the renowned public sector banks based in Mumbai. The man behind the birth of this bank is Sorabji Pochkanwala, a prominent banker. Central Bank of India was established in the year 1911 and it has gradually expanded its operation in the northern parts of the country also. This bank is also popular among the masses for the quality customer service they offer. At present, it has nearly 4729 branches. It carries out the business activity of around 456337 crores. The NPA is nearly 11.95% that reduces the level of profit.
6. Bank Of India
Bank Of India, well abbreviated as BOI can be placed among the few old banks of India. It was founded in the year 1906 and has carried out strong business during the later years. The estimated figure is around 872192 crores. This bank is also Mumbai based and at present has more than 5000 branches including both Indian branch and overseas branch. The Non-Performing Asset Level is quite high i.e. around 14 percent. Hence, there is a downward swing in their profit level. BOI has also incurred a huge loss this year amounting to rupees 6090 crores.
5. Canara Bank
Canara Bank is a South India based bank that has its headquarter situated in the city of Bengaluru. It is one of the robust banks that has nearly 5850 branches and some of them are overseas also. It was founded in the year 1906 in Mangalore. Canara Bank made a total business of around 804509 crores and still faced a heavy loss of nearly 2813 crores in the fiscal year 2015-2016. However, the NPA level suggests that this bank has the potential to rise up again in the near future.
4. Bank of Baroda
This is one of the banks which is based on the Western Parts of the country. At present, its headquarter is situated in Baroda, Gujrat. The total strength of the bank in terms of its branches is 5379. It has even some branches that are situated overseas, mainly in the Gulf States. It was established in the year 1908 and carries out business worth rupees 957810 crores. The NPA percentage is relatively high and it is around 11 percent. For this reason, it has suffered a loss of nearly 5400 crores in the year 2015-2016.
3. Union Bank of India
It is one of the public sector banks of India that was established in the year 11919. Basically, Union Bank of India is Mumbai based and carries out the business of nearly 620447 crores. At present, it has nearly 4000 branches all throughout the country while some are located overseas too. The Non-Performing Asset percentage is also very decent and it is around 9%. This bank has also made a good net profit of around 1350 crores in the financial year 2015-2016. The excellent performance of Union Bank of India states that it has got the potential to attain the first position.
2. Punjab National Bank
Punjab National Bank well abbreviated as PNB can also be well placed in the list of the few oldest banks. This bank was established in the year 1894 and its headquarter is situated in Delhi. The business figure of this public sector bank is very impressive and it is around 965379 crores. However, the Non-Performing Asset percentage is high i.e. around 14 percent. At present, it has more than 6500 branches all throughout the country.
1. State Bank of India
The State bank of India or SBI is the largest nationalised bank in the country that has more than 13000 branches. It carries out a business activity of around 3194423 crores. All the finance related business of the Government of India is with SBI. The NPA percentage is also very low and it is around 6.6%. This bank even had a huge net profit worth rupees 9955 crores in the current fiscal year.
Although the entire banking system has various parameters that are necessary for the correct evaluation, yet only a few of them has been taken into consideration for preparing the above list as they were successful in withstanding the toughest situations during the financial crisis.