Private-sector banks in India

The private-sector banks in India represent part of the Indian banking sector that is made up of private and public sector banks. The "privatesector banks" are banks where greater parts of share or equity are not held by the government but by private share holders.

Banking in India has been dominated by public sector banks (since the 1969) when all major banks were nationalised by the Indian government. However, since liberalisation in government banking policy in the 1990s, old and new private sector banks have re-emerged. They have grown faster & bigger over the two decades since liberalisation using the latest technology, providing contemporary innovations and monetary tools and techniques. The private sector banks are split into two groups by financial regulators in India, old and new. The old private sector banks existed prior to the nationalisation in 1968and kept their independence because they were either too small or specialist to be included in nationalisation. The new private sector banks are those that have gained their banking license since the liberalisation in the 1990s.

The Nedungadi Bank was the first private sector bank in India which was founded in 1899 by Rao Bahadur T.M. (Thalakodi Madathil) Appu Nedungadi in Kozhikode, Kerala.

Old private-sector banks

The banks, which were not nationalized at the time of banks are closely held by certain communities their operations are mostly restricted to the areas in and around their place of origin. Their Board of directors mainly consist of locally prominent personalities from trade and business circles.( Private sector banks) One of the positive points of these banks is that, they lean heavily on service and technology and as such, they are likely to attract more business in days to come with the restructuring of the industry round the corner.

New private-sector banks

The banks, which came in operation after 1991, with the introduction of economic reforms and financial sector reforms are called "new private-sector banks". Banking regulation act was then amended in 1993, which permitted the entry of new private-sector banks in the Indian banking s sector. However, there were certain criteria set for the establishment of the new private-sector banks, some of those criteria being:#The bank should have a minimum net worth of Rs. 200 crores.

1. The promoters holding should be a minimum of 25% of the paid-up capital.
2. Reliance Capital, India Post, Larsen & Toubro, Shriram Transport Finance are companies pending a banking license with the RBI under the new policy, while IDFC & Bandhan were given a go ahead to start banking services for 2015.
3. Within 3 years of the starting of the operations, the bank should offer shares to public and their net worth must increase to 300 crores.

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