The current edition of the FE-EY India's Best Banks Survey has been compiled amidst cautious optimism and resilience of the Indian economy to sustain growth while battling with high inflation. Strong headwinds on domestic and global fronts have made banks more risk-averse. Reserve Bank of India has played a stellar role in balancing between providing impetus for economic growth and curbing inflationary pressures and at the same time ensuring cushion to absorb shocks emanating from black swan events.
The Indian banking sector has been the major driving force supporting the country's growth over the decades. Dynamically evolving world economic order, strong Indian consumption story combined with demographic advantages, emerging regulatory framework aimed at ensuring stability of Indian banks as they continue to strongly support India Inc's growth, drive the bank's strategy of expanding market share, maintaining operational flexibility and of enhancing efficiency and profitability.
As ever, each category of banks - public, old private, new private and foreign banks face its own unique challenges ranging from shrinking margins and maintaining credit quality to managing liquidity and winning the war for talent.
Further, basis various competing demands impacting Indian banks, internally as well as externally, and their FY 2010 performance, we have decided not to change the criteria as well as the weights assigned to each of them as compared to the previous year. Considering these aspects, Ernst & Young has ranked the players within the Indian banking sector - 27 public sector banks, 13 old private sector banks, 6 new private sector banks and 9 foreign banks based on their natural genres.
Five major criteria were selected to compare performance of the Indian banks. These criteria are - Strength and Soundness, Growth, Profitability, Credit Quality, and Efficiency. In the current and foreseeable economic scenario, we believe every Indian bank would be evaluating itself and making peer comparison based on the major criteria selected as above.
Strong banks are a reflection of a strong economy. Continued faith, of the depositors on their bank and of the bank on its borrowers to repay, is the foundation of the banking business. The measure