India has a strong banking and financial sector. The Indian banking system consists of 21 private sector banks, 27 public sector banks, 49 foreign banks, 56 regional rural banks, 1,562 urban cooperative banks and 94,384 rural cooperative banks, in addition to cooperative credit institutions as of October 2018, according to India Brand Equity Foundation (IBEF). It was found that the total deposits in the Indian banks increased at a CAGR of 11.66%, while lending increased at a CAGR of 10.94%, for the financial year FY17-18.
Indian Banking Rising
India has made significant progress towards financial inclusion in recent years, as recognised by the World Bank. It was found that of the of the 51.4 crore bank accounts opened across the world in 2014-17, a commendable 55% were in India. In India, the number of adult bank account holders has significantly increased, reaching 80% in 2017, from 53% in 2014. This was the result of the Indian government’s successful implementation of the Jan Dhan Yojana campaign that brought a large number of Indians into the formal banking system.
In March 2017, Jan Dhan account holders totalled 28.17 crore, which rose 31.44% by March 2018, according to government data published by Business Today in April 2018.
India is making its way towards complete digitization of financial transactions. In this process, the involvement of banks has been and will be instrumental. When someone decides to open a bank account, they look for some of the major features to make their banking experience blissful, while ensuring that all their hard earned money is in safe custody.
Features of a Good Bank
There are many factors customers consider when deciding whether a bank is good or not. Here are some of the practical considerations of the modern consumer:
- A great reputation for withstanding economic downturns
- Easily accessible brick and mortar branches
- No/low minimum balance requirements
- An extensive network of ATMs
- Great customer service
- Free bill payment
- Smooth online banking
- Competitive rate of interest
- Free checks
- Availability of credit and loans
Based on these features I have created a list of 10 largest banks in the country that offer all or most of the conveniences and facilities mentioned above.
— Mani Karthik (@manikarthik) August 16, 2019
Top 10 Banks in India
Here is a list of the ten best banks in India.
1. HDFC Bank
The Housing Development Finance Corporation or HDFC is a reputed private bank, offering services in India since 1994. Just like many others, this bank too is headquartered in Mumbai. As of March 31, 2018, HDFC had more than 88,000 permanent employees. The bank has nearly 4,800 branches and more than 12,000 ATMs spread across major parts of the country. Other than savings account, HDFC offers personal loans, credit cards, car loans, consumer financial services and forex cards. HDFC has grown to become a prominent choice for opening salary accounts. In terms of the best bank in the private financial division, HDFC runs neck-to-neck with ICICI.
Related: Best Credit Cards from HDFC Bank and HDFC NRI Services Review.
Personal review of HDFC Bank services
My experience with HDFC bank has been mixed. As soon as I returned to India from the USA, I contacted the local HDFC bank for a current account (for incorporating my startup) and although the employee was more than happy and willing to help me, the entire process of starting an account was tedious and non-exciting. Most of HDFCs account opening process is done on their mobile app today, which is supposed to make the whole process easy. But I was told that there were rejections on the app due to trivial reasons, like the photo not being clear, extra characters being added to fields etc. At one point, the guy was saying that a manual process would have been a lot easier.
Also, I found it annoying that HDFC bank employee was trying to upsell me their insurance product (which earns them a commission) for no reason. For starting a current account, they convinced me that I should open savings account for me, everyone in my family and finally gave me a bunch of quick starter kits (with account info, cards etc) for each account. Quite honestly, I was confused which one is which, as none of them has names but numbers on them. To top that, activating net banking was a pain. I would assume any bank account started should have mobile and net banking activated proactively. In my case, it wasn’t activated and I had to chase the guy for it for weeks.
I agree that their products are good and their choices are plenty (for example, their HDFC Regalia credit card is one of the best in the market today) but their services and customer interactions are at best, merely satisfactory.
Good things about HDFC bank: Choice of products, Product knowledge, Availability.
Bad things about HDFC bank: Customer satisfaction, Long and tedious processes.
Here are couple of issues customers have faced with HDFC Bank (via Twitter).
Dear @HDFC_Bank, loan details are leaked left right and center to who you call ‘freelancers’
Random people are aware of my EMI, amount and other details. I’ve DMd details which you’ve said they are not Hdfc bank Reps, in that case how did the data get out? @HDFCBank_Cares
— Santosh P (@santoshp) August 14, 2019
2. Axis Bank
The third largest private sector bank in India, Axis Bank was founded in 1993 in Ahmedabad as a part of the financial services offered by the Unit Trust of India (UTI). In 2007, the name was changed to Axis Bank. It offers consumer banking, corporate banking, credit cards, finance and insurance, investment banking, private equity, mortgage loans, wealth management and more. The main products and services include savings accounts, credit cards, fixed deposits and personal loans, which can be accessed and operated online too. The bank has more than 13,000 ATMs and over 3,000 branches in India.
Here are some of the issues faced by Axis customers.
@AxisBank Money transferred to NRE Account of my daughter Shreya Bose at Thakur Village Br not credited since last one week.Issues sorted out but yet money not credited.And to top it all none in Br picking up calls.Makes me wonder whether I am dealing with Havala dealers or bank.
— Bibu Bose (@bose_bibu) August 14, 2019
@AxisBank is a Joke Bank and the bigger one is their @AxisBankSupport .They sent a credit card on a account that is closed in February 2019 and instead of apologizing, they are not even willing to resolve it. How worse it can get? I should report it to @RBI Ombudsman. #AxisBank
— D3Vashi5H (@4stroguy) August 14, 2019
3. IDFC Bank (Updated)
IDFC Bank is one of my personal favourites (Not any more).
Update: Ever since IDFC has become IDFC First Bank, their services have taken a hit. I mean, good customer service was the ONLY thing this bank could promise and looks like it’s gone to the dogs now. To give you an example, when it was IDFC Bank (pre-acquisition) you could dial in to their customer support and there would be no IVR, and get connected directly to a support agent who would know who you are (provided you are calling from the registered mobile number). Not any more! An average support call goes to the typical IVR, and takes about 13+ minutes to address. Ugh!
— Mani Karthik (@manikarthik) August 14, 2019
Old Content –
Now, I know a lot of you will not even know if there’s a bank like this but trust me, they are a good bank. A recently launched bank, IDFC recently merged with Capital First and renamed them as IDFC First bank. But why do we care about it? What I really like about IDFC First bank is that they don’t have too many customers, while having amazing features.
Their debit card is pretty awesome with so many features like..
- You can use it at any ATMs in India.
- You can update limit settings on the card live from the app/website.
- You get better FD rates.
- Starting an account is super easy (only takes 10 minutes or so).
- Free 250 Rs cashback every month for movies watched on BookMyShow.
But since they don’t have too many customers, I get good treatment from them. Like they have “home-service” available, where the assistant will come home to pick up cheques or just about get anything done. Super useful for a busy guy like me. I currently have all my business accounts and personal accounts and most of my personal savings in IDFC.
The problem with them is that they are not available everywhere. I have one branch in my area and I’m pretty sure that, it’s the only one in the state. So, that’s how rare they are. Also, in my area, they don’t have all their products available. Like credit cards or loans. They say, it’s coming up but it’s been a while now.
4. State Bank of India
Thinking of an establishing banking institution in India, the first name that comes to mind for most people is State Bank of India or SBI. State Bank of India is a government-owned bank, headquartered in Mumbai, Maharashtra. It was founded on June 2, 1806 and is one of the oldest banks in India. The bank offers a wide range of services, including corporate banking, consumer banking, investment banking, finance and insurance, credit cards, home loans, car loans, mortgage loans, private banking, savings, securities, private equity, wealth management and asset management. SBI serves a worldwide audience, with a strong presence both in India and internationally. It has more than 18,000 branches in the country alone.
In comparison with other banks in India, SBI has a wider reach among Indian households. This bank is touted as one of the safest banks. Generations of many families have been putting their money and trust in SBI. Despite the interest rates being lower than many multinational banks, SBI’s popularity has not dimmed. SBI has also made prominent contributions to the 2014 Pradhan Mantri Jan Dhan Yojana for financial inclusion and helped open a large number of accounts.
My personal review of SBI services
I like SBI for what it is, but there is no way it would let me like it. It almost feels like a Govt. office whenever I go there. Staff are all elder and not very co-operative and judging. They treat you with almost a vengeance, I assume they are dealing with too much work and perhaps exhausted or tired. No smiles, no caring. I’ve seen instances where SBI employees shout at customers!
I used it for my NRI services when in USA, and it had the benefit of offering good exchange rates working together with SBI Cal (SBI California, a US bank but off-shoot of SBI). Even in the US, going to an SBI bank was something you never would get excited for. In India, when I returned, there was one branch manager in the local area who got very friendly with me and would do anything she could on a phone call. I assume this isn’t normal procedure and she was probably trying to save from me taking my savings deposit elsewhere. (Local branches have their targets)
Good things about SBI bank: Choice of products, Product knowledge, Availability.
Bad things about SBI bank: Customer satisfaction, Long and tedious processes, Tired employees who don’t know how to behave with customers.
5. Bank of Baroda
Bank of Baroda is another state-own banking and financial service in India. It is headquartered in Baroda, (now Vadodara), in Gujarat, with its corporate office in Mumbai. In July 1906, Maharaja Sayajirao Gaekwad III, the then Maharaja of Baroda, founded this bank. On July 19, 1969, Bank of Baroda was nationalized by the Indian government, after which the bank came under the category of a PSU (profit-making public sector undertaking). As of July 2017, Bank of Baroda boasts a network of 5,538 branches and more than 10,000 ATMs in the country and abroad.
6. Punjab National Bank
Offering a wide range of services, including savings account, loans and credit cards, Punjab National Bank or PNB can be a one-stop destination for all your banking needs. It is a state-owned, Indian multinational banking and financial services company, headquartered in New Delhi. The bank offers internet banking, mobile banking and SMS banking. Unfortunately, the bank has seen some really hard times after the February 2018 Nirav Modi fraudulent loans case. However, the bank still managed to make a prominent contribution to the digital India initiative. According to recent findings by the Department of Financial Services, PNB is ranked as the #1 PSU bank in digital transactions in India, says an article by The Economic Times.
7. ICICI Bank
ICICI is another very popular private bank in India. Its wide range of banking products and financial services are designed to suit the needs of both retail and corporate customers in the country. In 2014, ICICI gained the second position among banks with the highest assets and third position in terms of market capitalization. ICICI has a presence in 18 countries across the world, apart from India. It was founded by the Industrial Credit and Investment Corporation of India in June 1994 in Vadodara. The bank operates through more than 8,700 branches and over 14,000 ATMs spread across major parts of the country. Its subsidiaries specialize in life insurance, non-life insurance, investment banking, asset management and venture capital funding. ICICI’s online investment and personal banking services add to its popularity. Regular Amazon shoppers will be interested to know that ICICI collaborated with Amazon Pay in 2018 to come up a credit card that offers extra reward points (uncapped) to Amazon Prime users, to make their online shopping experience even more satisfying, says an article by The Economic Times.
— vishnu (@vishnu_heda) August 14, 2019
8. Canara Bank
One of the largest and the oldest public banks, Canara Bank was established by Ammembal Subba Rao Pai in Mangalore in 1906. This government bank is headquarters in Bangaluru. It was nationalised by the government of India in 1969. Consumer banking, commercial banking, retail banking, investment banking, private banking, mortgage, credit cards, asset management and pensions are some of the major products and services offered by Canara Bank. It offers a seamless experience to its customers through its easy-to-use net banking services.
9. IDBI Bank
Industrial Development Bank of India or IDBI is a public sector bank, founded in July 1964 to finance large industries, as a special act of Parliament. The bank is headquartered in Mumbai. IDBI can be a convenient choice for corporate banking, consumer banking, investment banking, finance and insurance, private banking, mortgage loans, private equity and agriculture loans. The bank offers a wide range of credit card and hassle-free loan options. IDBI has also been making major contributions to the Digital India campaign, allowing most transactions to be made online.
10. Bank of India
One of the top five nationalized banks, Bank of India (BOI) is a commercial bank founded in 1906. This government-owned bank is also headquartered in Mumbai. The bank offers the convenience of mobile banking and online payments. As of the beginning of 2017, BOI has more than 5,000 branches throughout the country. The bank was setup with the aim of serving all Indian communities.
11. Kotak Mahindra Bank
Touted as one of the most trusted private financial institutions in India, Kotak Mahindra Bank was founded in 1985. The bank is once again headquartered in Mumbai. It has more than 2,000 ATMs and 1,300 branches across the country. The bank offers a wide range of banking and financial services, including personal banking, investment banking, life insurance, general insurance and wealth management. The bank is highly popular for its various savings accounts, designed to meet the unique needs of different customers.
So, these were my top 10 picks for the best banks in India. However, to choose a bank that’s right for you, determine your money habits, along with ATM usage, online banking needs, investment accounts, low account balances, deposits and credit cards.
It is really important that you have at least one brick and mortar branch in close proximity, even if you do all your banking online. Pay close attention to the bank’s customer service and its financial outlook to make an informed decision.
From your experience, which is the best bank in India today?