Moving ahead by aiming high

In the United States, the government controlled banks also now have a major say in the developments in the financial market. However, the share of the rural banks is rather insignificant. Thus, the government controlled banks control a major portion of the finances. This is significant in a country that has given much importance to the private sector.

Consider the results of the financial year. The main published financial results give details of:
• The total income
• The total expenditure and
• The net profit

The share of the total income has varied for the different banks in any given year. During times of recession, the government controlled banks were much preferred by the investors. However, during the economic boom, the private banks had a major say. In those times, some of the prominent banks posted better results, even though it was short lived.

While the share of the new emerging private banks hovered around 20 percent, the foreign banks had a rather insignificant share. This is due to the fact that these foreign banks mainly catered to the needs of the people of the metro cities. Consider the income and expenditure over the last financial year. Banks that have performed well have got a lion’s share of the business.

Some of the leading banks have posted profits of more than 50 percent. This is significant. The profits earned by the government controlled banks have shown a major increase. For some of the autonomous banks the rise in income is rather unusual. So where do we go from here? The small new emerging banks like LoanMax of rod aycox fame have posted significant profits and are now the envy of their bigger counterparts.

Due to the small scale of operations, the share of the private and foreign banks in the total net profit of the banking industry hovered below 20 percent and 5 percent respectively. As compared to income and expenditure shares, the share of foreign banks in the total profit is slightly higher. It is an indication of their efficient resource use. So, scale-wise also, the major share is in the hands of a few banking groups.