Thursday, December 20, 2007

Banking sector of India

Banking sector of India

Banking and retailing are the vigorously growing sectors of Indian market. At present there are about 25 foreign banks functional in the country and almost the same number will get functional by the end of year 2009. Surely it will boost already stiff competition in the sector and this is proving a cause of concern and stress for the nationalized and local banks of the country.

Survival of fittest principle of Darwin will come in the activity scene of this sector and this is forcing the nationalized bank to be aware and prepared for the future competitions and challenges posed by the presence of foreign banks in the sector. Look at the State Bank of India, which is trying for the merger of its associated banks like State Bank of Hyderabad, State Bank of Maysore, State Bank of Bikaner and Jaipur, State Bank of Tirvonkore etc. to raise its capital and remain away from the competition and problems created by the foreign banks at least for next 20 years.

There are some restrictions of Reserve Bank of India on the local banks as for as the loans are concerned where as foreign banks are free from such restriction and in fact this is most probable reason of worries for the Indian banks as Indian economy has started to revolve and grow around the personal and commercial loans.

Foreign banks come with technological excellence and more professional attitude towards the customer care and services. Though in the recent times a few are being fined by Reserve Bank of India for practicing muscular power and other malpractices for the recovery of their loans, but still this excellence and professional attitude is attracting thousands of clients for them. It is fact that foreign banks are preferring metros like Mumbai, Kolkatta, Chennai, and Delhi etc for their branches but they are expanding their functional wings even to rural areas of the country. Most recent illustration is the taking over of The Sangli Bank by the ICICI in the south Maharashtra.

In the coming days it is sure to see a very stiff competition in the banking sector of the country and many of co-operative and local banks are bound to go for opting a merger with larger fish of the ocean but surely the client will be benefited most and industry is going to find considerable loans available for the taking.

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