2.1.3.2. Private Sector Banks

It consists of both Indian banks and the foreign banks. Few examples of private banks are ICICI, Axis, HDFC bank etc.

♤ Indian banks – These are classified by RBI as old banks and new banks for the convenience of comparing performance of all Indian banks.

o Old banks – The banks except those were nationalized continued to be in the hands of privates. These private banks and those which were set up before 1990s are called old banks

o New banks – Banks set up in private sector in 1990s and after are called new banks. Latest by 2014 RBI issued license for new banks. It also came up with the proposal of small banks and payment banks. The RBI observes these banks as “niche” or “differentiated” banks with the common objective of furthering financial inclusion

Differentiated banks focus on different areas and develop competence in that. RBI has already issued licenses for small finance banks and payment banks. The third category is wholesale and long term finance banks (WLTF).