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July 6, 2001
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Money > Reuters > Report July 6, 2001 |
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State-run banks dominate India's banking sectorState-run commercial banks continued to dominate the Indian banking industry in the year ended March 2001, accounting for more than 75 per cent of deposits and loans, although their share fell marginally from the previous year, according to central bank data released late on Thursday. The Reserve Bank of India showed that 19 public sector banks, in which the central government is a majority shareholder, accounted for 53.6 per cent of total deposits at the end of March 2001, slightly lower than 54.0 per cent a year earlier. The country's largest commercial bank, the State Bank of India, and its seven associate banks accounted for another 24.7 per cent of total banking industry deposits at end-March 2001, unchanged from the year-ago period. The RBI is the largest shareholder in SBI, with a stake of nearly 60 per cent. The shares of other private commercial banks, foreign banks and regional rural banks in the industry's total deposits were 12.3 per cent, 5.3 per cent and 4.0 per cent respectively at the end of 2000-01. Public sector banks also had a major share of the industry's loans, accounting for 46.9 per cent of all advances while SBI and its associate banks accounted for 29.4 per cent. At end-March 2000, the share of state-run banks in total loans was 47.6 per cent, while SBI and its associate banks accounted for 29.1 per cent. The shares of other commercial banks, foreign banks and RRBs in the industry's loans at end-March 2001 were 12.8 per cent, 8.1 per cent and 2.8 per cent, respectively. State-run banks have the benefit of a wide branch netowrk which enables them to tap rural and semi-urban areas. Most private banks, on the other hand, tend to be regional in nature. Some private banks, started after the central bank eased the norms for issuing bank licences in 1994, have shown sharp growth in recent years although they are yet to seriously challenge state-run banks in terms of size. The RBI currently restricts the number of branches that can be opened by foreign banks to 12 per year.
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