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List of Best, Safe Banks in India

By Kavinkal Satyanarayan
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At the outset, a “Safe Bank” is a euphemism created more by historical prejudices and myths than by anything that is based on facts or events. The safety of Banks in the true sense has rarely if at all been tested in our country. All Banks, be they Government or Private, are legally safe only up to Rs 1 Lakh savings under the provisions of the Deposit Insurance and Credit Guarantee Corporation Act 1961.

 
List of Best, Safe Banks in India

Even this provision has never been invoked post-independence. This provision is also being adversely modified by the Financial Resolution and Deposit Insurance Bill, 2017. But more about that in the conclusion of this article.

 

So, we do need a more holistic view of the safety of Banks that goes beyond the guarantee of our savings being available to us even if a financial calamity befalls the country or the world. Banks are safe when markets repose confidence in them or when they have abundant assets to cope with financial distress. Safety of banks may be judged by numerous parameters including professionalism of management, consistent performance, Risk management, level of automation etc.

It is a subjective judgement based on some magic combination of these parameters which every stakeholder makes based on his or her knowledge and experience.

The following is a list of Banks selected with a holistic view of their credentials that make them safe. They are arranged in no particular order. Their strengths and shortcomings where significant have been highlighted.

1) HDFC Bank

If market confidence is a measure of the soundness of a Bank, then HDFC Bank takes the cake. At over Rs 11 lakh crore market capitalisation, it tops the chart, even if its assets are just a fifth of the largest Bank in the country. It stands out for its outstanding business leadership and professional managerial skills.

2) State Bank of India

With over Rs30 Trillion assets under management, it is easily the largest Bank in the country and hence also the safest bank in India. It is more than 2.5 times bigger than the runner up i.e. ICICI Bank. Being a Government Bank, it is well regulated and is manned by well-trained staff. It is also somewhat a rule-based bureaucratic organisation with its traditional cumbrous ways.

3) ICICI Bank

ICICI Bank was at the forefront of the post 89 digital revolutions of Indian Banks. They pioneered the shift from rule-bound bureaucracies to policy guided process-driven banking systems. Its market capitalisation is the third next to SBI and ranks second in asset size.

4) AXIS Bank

Axis Bank is the third-largest bank in the private banking sector in India and hence it is very safe to invest. Axis Bank has nine international branches at Singapore, Hong Kong, Dubai (at the Dubai International Financial Center), Shanghai, Colombo and representative offices at Dhaka, Dubai, Sharjah and Abu Dhabi. It is offering suitable financial products to the customers to fulfil their needs and wants like CASA, Investments, Fixed deposits, Credit Cards, Business Loans, Agriculture loans, Personal loans, Car loans, Mutual funds, Insurance and more. Also, it provides securable services for Retail banking, corporate banking and international banking operations. The bank offers different loans and fee-based products and services to large and mid-corporate customers. In retail banking, the bank is separately allotted executives to provide services to meet customers and explaining them about financial products which are suitable for them. The product services are card services, Internet banking services, automated teller machines (ATM) services, depository, financial advisory services, and Non-resident Indian (NRI) services. Axis bank has a separate brand image for customer service and maintaining customer relationships.

5)Bank of Baroda:

Bank of Baroda (BOB) is an Indian multinational company of banking and financial services in the public sector. The Government of India announced that the Vijaya Bank and Dena Banks are merged into Bank of Baroda. This is the first tripartite merger of banks in India, which makes the combined geographical scope of 9,490 branches, 13,400 ATMs with 85,678 employees who They serve 120 million customers. The bank of Baroda has become the second-largest public sector bank in India after its merger with Dena and Vijaya Bank, respectively. The merger of the two lenders with BOB will be effective as of April 1, 2019.

All Dena and Vijaya Bank branches will function as Bank of Baroda branches and customers of both banks will be treated as BOB customers, the RBI stated that customers will also continue to use the same account number, IFSC code, MICR code along with their current chequebooks and ATM cards.

According to several reports in the media, the main PSU lenders such as Punjab National Bank (PNB), Bank of Baroda (BoB), Bank of India (BOI), Canara Bank and Union Bank of India would take about 3 under their umbrella -4 banks to create a large entity and would have a massive distribution channel to show off. The merger will add to the operational strength of PSU banks. Therefore, see in the table where the PSU banks will be located if the proposed merger structure takes effect.

6)PNB (Punjab National Bank)

Punjab National Bank is one of the major government owned banks in India that offer multinational banking and financial services. PNB had the privilege of taking over Nedungadi Bank, the oldest private sector bank, as well as the accounts of Indian national leaders.

The merger of the Oriental Bank of Commerce and the United Bank with the Punjab National Bank had led to it becoming the second public sector bank in India.

The Punjab National Bank, India's first Swadeshi Bank, began operations on April 12, 1895, from Lahore, with an authorized capital of Rs 2 and working capital of Rs 20,000. The Bank was created by the spirit of nationalism and was the first purely Indian-managed bank with Indian capital. Over the long history of the Bank, 7 banks have merged with PNB.

Since it is a government owned bank, the deposits of the bank are safe. It has a very long history and track record of serving people in the country.

7) Kotak Mahindra Bank, IndusInd Bank

These private sector Banks Rank fourth to seventh in the bank market capitalisation list. Kotak Mahindra and IndusInd are backed by reputed business houses. All of them are well managed and have the potential to give the top few banks a run for their money in the times to come.

Bank of Baroda, Canara Bank, Vijaya Bank. These former private banks that had been nationalised have a largely conservative culture and are gradually expanding their all India presence. Most have a strong rural footprint at least in their local areas. These are well capitalised and enjoy the confidence of the markets.

The safety of a Bank is best Judged in contrast. Check out these. Allahabad Bank, UBI, Corporation Bank, IDBI, UCO Bank, BOI, Central Bank of India, IOB, Oriental Bank of Commerce, Dena Bank, Bank of Maharashtra. All on the RBIs PCA list and five more waiting in the wings. How safe would you feel if you had Rs10 Lakhs FD going for the last ten years, to mature in fifteen in one of these Banks?

In a free-market economy, the concept of risk-free investment is just that, a concept. As the Government cedes control over the economy it also abdicates responsibility. The bail in the provision of the FRDI bill is just that. It eventually passes the risk to the beneficiary of the Bank’s services i.e. the clients, amongst others. The Indian Free market is here to stay. The Indian economy is huge. Too huge for any one entity, even the Government to bear all the Risks in it. The safety of our investment is our responsibility and the Bank has only so much to do with it.

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