Commercial Banks — Public, Private and Foreign

Commercial banks are banks that accept deposits from and lend to the general public and businesses, operating on a commercial (profit-making) basis, subject to RBI regulation under the Banking Regulation Act, 1949. They are classified by ownership into three groups:

1. Public Sector Banks (PSBs) — banks in which the Government of India holds a majority stake (typically 51% or more). India's PSB structure includes the State Bank of India (SBI), created under its own SBI Act, 1955, and the nationalised banks — banks that were originally private but were brought into Government ownership through two waves of nationalisation (14 major banks in 1969 and 6 more in 1980), later consolidated through mergers into fewer, larger entities (e.g. Punjab National Bank, Bank of Baroda, Canara Bank, Union Bank of India). PSBs dominate India's branch network, especially in rural and semi-urban areas, and play a major role in implementing Government schemes (priority-sector lending, financial inclusion drives).

2. Private Sector Banks — banks owned mainly by private shareholders, licensed by the RBI. These include older private banks that survived nationalisation because they were below the size threshold (e.g. some regional private banks) and new private banks licensed from 1993 onward following banking-sector liberalisation (e.g. HDFC Bank, ICICI Bank, Axis Bank, Kotak Mahindra Bank). Private banks are generally known for early adoption of technology, customer service, and a more selective branch network concentrated in urban and commercially active areas.

3. Foreign Banks — banks incorporated outside India that operate branches within India under RBI licence (e.g. Citibank, HSBC, Standard Chartered), primarily serving international trade finance, corporate banking and high-value retail customers; their overall branch presence in India is much smaller than that of domestic banks.

| Basis | Public Sector Banks | Private Sector Banks |

|---|---|---| …