The banking system is the backbone of every country’s economy and India is not an exception, in fact, the Indian Banking System is the most regulated Banking system in the World. Reserve Bank of India or RBI is the Central Governing body for all commercial Banks in India and solely responsible for regulating, monitoring and implementing the policies and guidelines for the Indian Banking sector.
In a country of 1.32 Billion people, still, 195 million people do not have basic Banking access in India, which is the second-highest in the World after China. (Unbanked Population of China is 225 Million, according to the survey report by Global Findex Database, 2017). In percentage terms, 20.1% of India’s total population was unbanked when the Report was published in 2017.
Though the situation has been improving every year, due to Govt of India’s Financial Inclusion program which was launched in the year of 2014. Now anyone can open Bank Account with Zero Balance and get all the basic banking facilities. To accelerate the process of Financial Inclusion, RBI has also granted the license to set up Payments Bank in 2015. But in reality, most of the accounts under PMJDY are inactive.
Here, in this article, we will comparatively analysis the top 6 best Banks in India based on customer satisfaction, product offerings, branch network, Modern Banking Technology, and several other indicators.
Factors to be considered before opening the Bank Account
Here are the top factors you must consider before opening a Bank Account
- Purpose: What is your main reason to open the account with any Bank. For example, if you want to avail Home Loan in the future, then you should consider the Bank which has the lowest interest rate and Processing Fees with flexible tenure.
- Charges: One of the foremost reason to select any Bank, consider those Banks which are transparent in their fee structure, low charges, and no hidden fees. Private Banks have very bad reputations in these areas.
- Technology: Today, all your banking needs can be done from the smartphone, therefore, a Good Mobile Banking App or online Internet Banking portal is one of the top reasons you should consider.
- Bill Payments: Bank’s online internet banking portal should integrate all the Billers in India for hassle-free payments of Bills like Mutual Fund, Insurance, Visa Credit Card Payment, etc.
- Service Quality: India’s PSU Banks have a very bad reputation in this area, though they are now started to improve their service quality to compete with the Private Banks. Quality of Branch Banking should be given topmost priority.
- Branch Network: You must consider the Bank which has a very good branch network. If you are in any transferable job, then definitely consider the Bank which has branches in almost every place in India.
- Phone Banking: Every time, it is not possible to visit branches for any minor work, therefore a good Phone Banking service you must consider before selecting the right bank.
- Offers: One of the top reasons to choose the right bank which gives the most discounts and offers from the eCommerce websites. You can find a dedicated offer section on Bank’s official websites where the Bank provides the current offers or merchant discounts.
- ATM: You must consider the Bank which has a good number of ATM points at every place in India. You may withdraw money at any Bank’s ATM but there has a certain limit after which you have to pay charges for withdrawal or even balance inquiry.
Parameters considered selecting the Best Bank
Here I consider the parameters for selecting the Best Bank in India
- Online & Mobile Banking
- Branch Network
- Fees & Charges
- Offers & Discounts
- Customer Care
- Customer Satisfaction
Top 6 Best Banks in India
In a country of billions of people, the Word Best Banks in India is a very relative term. There are a total of 18 Public Sector banks, 22 Private Sector Banks and hundreds of Scheduled and Non-Scheduled Regional Rural Banks, Co-operative Banks, Foreign Banks, and Payments Banks operate in India. The term Best Bank in India varies from region to region and person to person. The Best Bank to any person may not the best for the other person. It all depends on personal experiences & individual satisfaction.
If you are staying in any urban areas then you might have access to several Bank Branches, and you can choose your favorite one. But if you are staying in any rural area, you might have only a single Bank Branch at your locality. Therefore, you do not have any other option to select.
Here is the list of 6 Best Banks in India considering several factors which we will categorically cover later in this article. The list contains both PSU and Private Banks in India. We consider customer satisfaction is the topmost deciding factor while preparing the list.
- HDFC Bank
- Kotak Mahindra Bank
- State Bank of India
- ICICI Bank
- Bank of Baroda
- Axis Bank Limited
Here’s how they Score on different parameters
|Name of Bank||Branches||ATM||Banking Technology Score||Customer Service||Charges||Visit|
|HDFC Bank||5314||13514||3/5||Very Good||High||Official Website|
|Kotak Bank||1391||2352||5/5||Very Good||High||Official Website|
|ICICI Bank||5275||15589||5/5||Good||High||Official Website|
|Bank of Baroda||9583||13400||3/5||Good||Low||Official Website|
|Axis Bank||4050||11801||4/5||Fair||High||Official Website|
Asset Size of Top 6 Best Banks as on 31.03.2019
1. HDFC Bank
HDFC Bank is the second-largest bank in India and ranked 1st in this list of best Banks in India. They are also named Number one Bank according to Forbes Magazine’s list of Best Indian Bank. HDFC Bank is one of the most reputed private sector Bank, headquartered in Mumbai and has more than 5300 branches spreads across 2768 cities in India. The Bank also has the largest Credit Card base in the country.
HDFC Bank is the most valuable brand in India in 2019 by brand value according to BrandZ.
HDFC Bank is so far the most secured Private Bank in India. You can easily change the mobile Number or update Address from other Private Bank’s ATM or NetBanking portal, but you can not do it in HDFC Bank. Though many find this process very backdated, but this is the right approach for the security of your Accounts.
HDFC Bank is the subsidiaries of Housing Development Fin Corp or HDFC Ltd which is a big financial conglomerate. HDFC offers different services and products like Mortage Loan, General Insurance, Life Insurance, HDFC Securities or Mutual Fund, etc.
HDFC Bank does not offer its own home loan or insurance products, they just market the products and services for their parent company Housing Development Fin Corp or HDFC Ltd.
HDFC Bank is the largest Private sector Bank in India in terms of Market Capitalization. HDFC Bank has also the best Asset quality amongst all Indian banks.
HDFC Bank is the first bank in India that has introduced the AI-powered conversational chatbot named EVA (Electronic Virtual Assistant) in the Indian banking system.
Why should you Choose this Bank?
- Second largest lender and largest private lender in India. Big Brand in Indian Banking Sector and most valuable brand in India by brand value.
- Largest credit card base in India.
- Most secured Bank amongst the all private Banks in India.
- The international transaction enabled Visa Debit Card. You can activate International Transaction rights from HDFC Bank’s net banking portal.
- Very good branch network, more than 5100 branches located in almost every urban or semi-urban areas in India.
- Good customer service, Phone Banking support, trained & professional branch staff.
- Excellent Bank for corporate salary Account holders.
- AI-fueled Conversational banking chatbot software with text and voice-based interface to perform banking tasks.
- Get transaction updates on Whatsapp.
- Feature-rich Debit cards with EMI on debit card facility for selected customers.
- Very good service for the Current Account holders, dedicated relationship manager for corporate customers.
- More transparent regarding charges, fees, rate of interest on different loan products.
- Exclusive Offers and Discounts programs with various eCommerce websites in India, HDFC Bank credit card is ranked one of the best in India in terms of providing various merchant discounts and offers.
- Register Mutual Fund SIP URN or Loan ECS mandate both from NetBanking and Debit Card.
- You can find every product like HDFC Mutual Fund, Life Insurance, General Insurance, Demat & Trading Account, Health Insurance from a single place.
Why should not you choose this Bank?
- Charges and Fees are very high. Thoroughly check the terms & conditions before availing any retail or personal loan from HDFC Bank.
- You have to maintain a very high minimum balance, Rs.10000 in urban areas and Rs.5000 in rural and semi-urban areas.
- Mobile Banking App is not very intuitive comparing other bank’s mobile banking app.
2. Kotak Mahindra Bank
Kotak Mahindra Bank is one of the highly reputed and technologically updated Bank in India. Their customer service is the best amongst all Indian Banks in India. Founded in 1985, as Kotak Mahindra Finance Ltd, Kotak Bank is now the second-largest Private Bank in India after HDFC Bank in terms of Market Capitalization. In the year 2015, Kotak Mahindra Bank acquired Bangaluru based private Bank ING Vysya Bank.
Headquartered in Mumbai, Kotak Mahindra Bank has around 1400 branches in India. The Bank offers a wide range of Products from Investment to Credit. Kotak Bank is also the best Digital Bank in India in terms of Banking Technology. You can create a free Digital Bank Account with an International Transaction enabled Visa Virtual Debit from Home within 5 minutes and do not have to maintain any minimum balance.
Kotak Bank is also an excellent Bank to open corporate salary Account and Current Account for business with auto swap facilities. Their Trading Account is the best 3 in 1 Trading Account Service amongst all Indian Banks in India.
The Bank offers a wide range of banking products from Investment to Insurance & Wealth Management.
Kotak Bank is also the first Bank where you can register the recurring Auto-Debit eMandate for Mutual Fund SIP URN or Loan EMI ECS from both Debit card and NetBanking.
Why should you Choose this Bank?
- Excellent Internet Banking & Mobile Banking App in India.
- Instant Digital Bank Account with international transaction enabled Virtual Debit Card.
- Best 3 in 1 Trading cum Savings Account in India.
- Dedicated relationship managers for corporate Banking customers.
- Register recurring eMandate for Loan EMI ESC or Mutual Fund SIP both from Debit card and Netbanking.
- Good Phone Banking Service.
- Kotak Moneywatch, Personal Finance Manager.
- High savings interest rate. Auto-swap facility for Current Account balance.
- Excellent Offers and Discount programs with various merchant websites.
Why should you not choose this Bank?
- Very Low Branch & ATM Networks.
- High minimum balance requirement for regular Savings or Current Account.
- Kotak Bank Credit card section is not as popular as HDFC, CITI or SBI Credit Card service.
- Not very transparent on their Fees and Charges. Kotak Bank starts taking charges for UPI Money Transfer Service.
- Thoroughly check the Interest rate, Processing fees, pre-closure charges, etc, if you want to avail of any retail loan or business loan from Kotak Bank. Like other Private Banks, Kotak Bank also has a very bad reputation of deducting hidden charges from the account.
3. State Bank of India
No need to give any introduction of SBI, India’s largest bank, with more than 23% of market share in India’s banking sector. SBI ranked 216 in the Fortune Global 500 company list in the year 2018, though they could not even rank at the top 10 best banks according to Forbes list of Best Bank India 2019. Though we can not deny the influences of SBI in India’s Banking system and we rank 3rd in the list of the best banks in India.
The name State Bank of India reminds us the lazy staff always replies to your queries “Come Tomorrow”. Though the situation has been improving from the last couple of years. The Bank is showing a more professional approach to compete with Private Banks in India.
SBI is the largest Bank in India with huge branches and ATM networks across the country. Though it is not a Government of India bank technically, it is a wholly-owned subsidiary of RBI and the majority of its share owned by RBI.
SBI is lately coming up with all the products which are the Private banks offering in India. Their Credit Card and Mutual Fund section is most prominent and competing with HDFC & CITI Bank. SBI Mutual Fund AMC is now the largest MF AMC in India toppling the HDFC AMC. Their approach to treating customers is also changing.
SBI board has also approved an investment of Rs.7250 crores in Yes Bank to rescue the struggling private sector bank.
Why should you Choose this Bank?
- Huge branch and ATM network, you can find the SBI branch or ATM at every corner of the city, even it is an urban area or rural area. Cardless cash withdrawal from Yono Mobile Banking App.
- Fees and charges are more transparent and less than private banks in India.
- SBI Credit card section one of the best in India, SBI owns 60% of the share and the remaining 40% owned by Carlyle Group.
- Low minimum balance maintenance, in urban area Rs.5000, in semi-urban area Rs.3000 and in rural areas it is Rs.1000.00. (Updates: SBI recently waives the minimum balance requirements from all types of savings accounts)
- Best Bank for Home Loan, one of the lowest interest rates in the market, though their interest rate on MSME loan is somewhat higher than other PSU Banks.
- Special Packages for corporate salary Account.
- Dedicated relationship manager for their corporate customers.
- One of the best internet banking portals in India, the mobile banking app is also very good.
- Very good offers & discounts programs for SBI credit holders in India.
- EMI on debit card facility on several eCommerce websites.
Why should not you choose this?
- Poor customer service at the branch level.
- Staffs are more busy in selling third-party products rather than Banking.
- Interest Rate on Business Loan is somewhat higher than the other PSU Banks.
- Does not offer international enabled Debit Card for the Savings Account Holders.
4. ICICI Bank
ICICI Bank Limited (Industrial Credit and Investment Corporation of India) is so far the most innovative bank in India in terms of implementing Banking Technology. They are the pioneer of several new technological innovations in India. ICICI Bank was launched by Industrial Credit and Investment Corporation of India in the year 1994, later both of them merged together to form a single entity.
Headquartered in Mumbai, ICICI Bank has 5275 Branches and 15589 ATMs across India and one of the largest private-sector banks in India. (Second largest Private Sector Bank in terms of Asset Size)
ICICI Bank was the first bank in India to introduce the Mobile Banking App in the year 2008, internet banking in the year 1996 and introduced the first contactless debit card in India. ICICI bank has a wide range of banking products from loans to investment. ICICI Pru is the third-largest mutual fund AMC in India.
If you are a Banking Tech freak, then I must recommend this Bank.
Why should you Choose this Bank?
- Most innovative and user-friendly mobile banking and online banking platform.
- Good Branch Network across India.
- Excellent Phone Banking and customer care service. You can complete your several minor works from Home.
- Very good Offers and discount programs with various eCommerce merchants websites in India.
- ICICI Bank Debit card is International Transaction enabled.
- You can avail of all the banking products from a single platform.
- Reward Points Program with PayBack, Number One rewards points program in India.
- Professional and trained staff to cater your all banking needs.
Why should you not choose this bank?
- Require to maintain a high minimum balance for both savings Bank or Current Accounts.
- High fees and charges. Not very transparent on their Fee structure.
- Bank staff always try to sell all the third-party products rather than banking.
- Credit Card is not so good as compared to the other credit card providers in the market like HDFC Bank or CITI Bank Credit cards.
5. Bank of Baroda
Bank of Baroda is the second largest bank in India in terms of Asset size and third-largest lender in India after SBI and HDFC Bank. After merging with Dena Bank and Vijaya Bank in the year 2018, the total Branch network of BOB is 9583, making it the second-largest PSU Bank in India after SBI. Bank of Baroda has the most number of Foreign branches amongst all the Indian branches (Total of 104 International Branches) making it the first Indian International Bank.
Bank of Baroda has the best service quality amongst all PSU banks in India. BOB has a more customer-centric approach like the Private Banks in India, though they have much less Banking Products of their own, mostly BOB ties up with third-party companies to provide Insurance, Mutual Funds, and other Banking products. BOB has also credit card services for its customers, though not as popular as SBI or HDFC Bank credit card service.
Why should you Choose this Bank?
- Wide Branch and ATM Networks after merging with Dena Bank and Vijaya Bank.
- Excellent 3 in 1 Trading cum savings Account.
- Most Number of international Branches.
- Low Charges and Fee structure for various Banking services.
- Very low minimum Balance requirement for Savings and Current Accounts.
- Excellent mobile Banking App.
- Very Good NetBanking portal.
- Best Bank for inward remittance of Foreign currency.
Why should you not choose this bank?
- Credit Card service not very popular.
- Branch Network not widely distributed across India, mainly covers Southern and Northern parts of India.
- Less Banking products to offer than other top Banks in India.
6. Axis Bank Limited
Axis Bank is the third-largest Private Sector Bank in India and most number of ATM amongst the Private Banks in the country. They have the Branches and ATMs equally distributed across all geographic locations in India. Currently, Axis Bank has 4050 branches and more than 11800 ATM in India.
Axis Bank’s ASAP Account is one of the best Digital Bank Account in India. They have also a wide range of banking products from Retail to Corporate Banking and one of the best banks for SME lending.
Axis Bank was launched in the year of 1993 under the administration of Unit Trust of India and LIC of India and named as UTI Bank. Later in 2007, the name UTI Bank was changed to Axis Bank Limited. LIC is the largest individual shareholder of Axis Bank.
This is the first Indian bank to introduce a dedicated innovation lab in Bengaluru. The Bank also has a very good mobile Banking App and NetBanking Portal.
Why should you Choose this Bank?
- Largest ATM Networks amongst the Private Banks in India.
- One of the best Digital bank in India.
- Very Good Mobile Banking App.
- International Transaction right enabled virtual Debit Card.
- Offers Wide ranges of Banking Products from Retail, Corporate to Investment Banking.
- Very Good Offers and Discounts programs with eCommerce merchant sites in India.
- Multi-currency Forex Cards for International Travel.
- Wide ranges of Credit Card.
Why should you not Choose this Bank?
- Very high Minimum balance requirement like the other private Banks in India.
- Not very transparent in their Fees and Charges. Unnecessary deducts charges from the Account.
- Customer Service is not as good as other Private Sector Banks.
- Rate of Interest on retail loans is very high compared to other lenders.
- The quality of credit card service is not as good as HDFC Bank or SBI.
Which is the Safest Bank in India?
All the commercial banks in India has a Deposit Insurance Scheme up to Rs.1.00 Lacs under Deposit Insurance and Credit Guarantee Corporation (DICGC), a subsidiary of RBI. In the recent Budget 2020, the amount has raised to Rs.5.00 Lacs. The deposit insurance scheme will cover your savings, current & fixed deposit balances including the interest accrued. The maximum upper limit is Rs.5.00 Lacs including all your deposits from the same bank. If you have any deposits in any other bank, the same insurance will cover up to the maximum limit to the other bank. If any bank goes for bankruptcy, then you may get only Rs.5.00 Lacs from the particular bank from DICGC.
Now, if you are looking for the best & safest Bank in India to secure your hard-earned monies, then I will recommend you select the Bank which has best Asset Quality. That means which bank has a lesser percentage of Gross NPA to total Loan Portfolio. The PSU banks GNPA is around 12 percent as of March 2019, whereas Private Sector Banks GNPA is around 3.2 percent during the same period. Though every Indian Bank tries to under-report its actual NPA figure, to show more profit.
If we consider Asset Quality is the best-ranking factor for selecting the safest bank, then HDFC Bank has the best Asset Quality amongst all the Indian commercial banks. Amongst the Private sector bank, Kotak Mahindra Bank has also a very good asset quality. Amongst the PSU bank, only the 3 PSB, State Bank of India, Canara Bank, and Indian Bank had the NPA ratio below 10 percent in March 2019. Therefore, in my view, the safest banks in India are HDFC Bank, SBI, Canara Bank and Kotak Mahindra Bank. Though I will always recommend you, try to diversify your deposits in different banks. I have already written an article on best savings bank accounts in India, you can read the article here
These are the top 6 Best Banks in India right now to open Bank Account. But again as I have mentioned earlier Best Bank is a relative word, its a matter of personal choice and varies on person to person. Some prefer PSU Banks for safety and some prefer Private Banks for Service Quality. You won’t find any complete Bank which fulfills your all Banking needs.
After the recent Government of India announcement, there will be only 12 Public Sector Banks after March 2020. The above ranking of banks may change in the future after the amalgamation of PSU Banks.
Above, in this article, I try to cover the Pros and Cons of the top 6 banks in India. If you have any other recommendations, then don’t hesitate to leave your comments below.
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