Banking in India is fairly mature in terms of supply, product range and reach-even though reach in rural India still remains a challenge for the private sector and foreign banks... I think from a long term perspective the only way is 'UP'....
From a global perspective - Indian banks are very limited in size (example: SBI - India's largest bank in all respects doesn't figure in top 50 banks worldwide. I think it is no. 89 or so on the list). Nevertheless - I reckon RBI is taking more measures to speed up banking growth. New banking licenses coming in by end of 2013 is one such indicators...
Banking (and Insurance - which is nascent in India and somewhat related) would be long term growth story. Last private sector banks to be given licenses were - Yes Bank, Kotak Mahindra.. nearly 9 years back. Before that sometime in 1990's - ICICI / HDFC (one knows the meteoric rise of these banks).
From a growth perspective, my picks -
Yes Bank - One of the fastest growing banks in India. Have been accumulating ever since 2008 when it reached sub 50 levels... some nice buying opportunity now when its hovering sub 300 levels now..
South Indian Bank - One of the oldest private banks in India. Steady presence in south.. patronized by NRI's. Nice one to pick sub 20's.
DCB - Its sort of rising again as a phoenix... dark horse worth holding. Once the debt goes (hopefully next year) - I like this one.
What could be interesting bets - some of the applicants for new banking licenses - LIC Housing Finance, L and T Finance Holdings, AB Nuvo, others... I'm kinda looking at averaging the top 6 - 7 players who most probably will get a license. Seems like the safest strategy for me!
Ciao till next time...Harsha
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