After a six-month-long process of crunching numbers of banks and non-banking financial companies (NBFCs),
the moment finally arrived to crown the champions of the 29th BT-KPMG India's Best Banks and NBFCs
Survey 2023-24 this November.
A high-powered jury, led by Jayant Sinha, Former Chair of the Standing Committee on Finance and Former
Minister of State for Finance, deliberated on the data. Other members included Subhash Chandra Garg,
Former Economic Affairs Secretary; Dinesh Kumar Khara, Former Chairman of State Bank of India; Kalpana
Morparia, Former Chair (South & Southeast Asia), J.P. Morgan; Gunit Chadha, Founder of APAC Financial
Services; Alice G. Vaidyan, Former CMD of GIC; and A.P. Hota, former MD & CEO of NPCI.
When it came to picking winners, the jury prioritised 'impact' while evaluating several categories,
particularly in innovation and fintech engagement.
Dinesh Kumar Khara recused himself from deliberations on the Lifetime Achievement Award, where he was
a nominee, and the Best Bank in Innovation Award, where SBI's innovation was listed among the top
three. A.P. Hota, a board member of Federal Bank, also stepped aside from the Lifetime Achievement
Award since former MD & CEO Shyam Srinivasan was a nominee. Sinha excused himself from the Best
Fintech in Lending Award since his wife, Punita Kumar Sinha, serves as an independent director on
the board of MobiKwik.
The jury selected nine winners across 10 categories. The Best Bank in Fintech Initiative award was
dropped for the lack of strong entries. In addition, six winners were picked purely on the basis of
a quantitative analysis, independent of the jury.
QUANTITATIVE AWARDS
For rankings based on financial performance, data was taken from published annual reports of banks
for FY21 to FY24. The survey covered 52 scheduled commercial banks (SCBs) that had published annual
reports in the public domain or provided them prior to October 31, 2024. Foreign banks with a
balance sheet size of less than `25,000 crore as on March 31, 2024, were not considered. Also not
covered were SCBs whose financial statements were not available or which had not completed four
years of operations in India as on March 31, 2024, or were involved in mergers in the last three
years, or were under liquidation.
The Ranking Process
The banks were divided between 'Indian Banks' (consisting of public and private sector banks),
'Foreign Banks' (branches of foreign banks in India), and Indian Small Finance Banks. Banks were
further classified based on balance sheet size as on March 31, 2024.
The banks were divided between 'Indian Banks' (consisting of public and private sector banks),
'Foreign Banks' (branches of foreign banks in India), and Indian Small Finance Banks. Banks were
further classified based on balance sheet size as on March 31, 2024.
Group I Indian banks with a balance sheet size of more than or equal to `5 lakh crore
Group II Banks with a balance sheet of more than `2 lakh crore and less than `5 lakh crore
Group III Banks with a balance sheet of less than or equal to `2 lakh crore;
Group IV Foreign banks with a balance sheet size of more than or equal to `25,000 crore
Group V Small finance banks
Ranking parameters
The banks were judged on three parameters—growth, size and strength—divided into 38 sub-parameters:
Growth: There were 12 sub-parameters, which included year-on-year (YoY) growth in total
deposits, alongside three-year* compound annual growth rate (CAGR) of total deposits; YoY growth in
current account savings account (CASA) deposits, alongside three-year* CAGR of CASA deposits; YoY
growth in loans and advances, alongside three-year* CAGR in loans and advances; YoY growth in fee
income (commission, exchange, and broking income plus miscellaneous income), alongside three-year*
CAGR in fee income; YoY growth in operating profit, alongside three-year CAGR in operating profit;
and absolute increase in market share of deposits and of CASA balances.
*Two years for DBS Bank India
Size: There were three sub-parameters: size of deposits, size of operating profits, and size
of balance sheet as on March 31, 2024.
Strength: There were four overarching sub-parameters:
Quality of assets: Increase in gross net performing assets (GNPAs): Additions to GNPAs during
the year as a percentage of average net loans and advances (i.e., the average of the closing balance
of FY23 and FY24); NPA coverage: provisioning as on March 31, 2024, for NPAs as a percentage of
gross NPA closing balance; net NPAs as a ratio of net advances: GNPAs closing balance net of
provisioning as of March 31, 2024, expressed as a percentage of net advances; GNPAs as a ratio of
gross advances: GNPAs closing balance as on March 31, 2024, expressed as a percentage of gross
advances; secured net advances (net of provisions) to total net advances (net of provisions):
secured net advances to total net advances as at March 31, 2024; divergence in gross NPAs:
difference between GNPAs as per Reserve Bank of India (RBI) rules as a percentage of addition to
NPAs; divergence in provisioning for NPAs: difference in provision for NPAs as per RBI rules as a
percentage of reported profit before provisions and contingencies; deposits of 20 largest depositors
as a percentage of total deposits, advances to 20 largest borrowers as a percentage of total
advances, exposure to 20 largest borrowers/customers as a percentage of total exposure.
For rankings based on divergence in GNPAs and provisioning for NPAs, banks with divergences of less
than 5% each and banks with no divergences were assigned the highest rank. For determining rankings
based on provision coverage ratio (PCR), banks having zero NPAs and those having a PCR of 100% were
assigned the highest rank.
Productivity and efficiency: Cost-to-income ratio: operating expenditure as a percentage of
operating
income; cost-to-average asset ratio: operating expenditure as a percentage of average total assets
(i.e., average of closing balance of FY23 and FY24); absolute increase in return on assets (ROA):
basis points increase YoY in ROA; percentage increase in ratio of operating profit to total income
YoY; profit per employee.
Quality of earnings: ROA: ratio of net profit to average total assets (i.e., average of
closing
balance of FY23 and FY24); fee income as a percentage of total income; return on capital employed
(ROCE): reported net profit divided by average net worth; NIM: total interest income minus total
interest expenses as a percentage of average interest-earning assets; penalties imposed by RBI
during the year.
Capital adequacy and liquidity coverage: Capital-to-risk-weighted-assets ratio for FY24;
Tier-I
capital: total of equity capital and disclosed reserves; liquidity coverage ratio: ratio of
high-quality liquid assets (HQLA) to total net cash outflows over the following 30 calendar days.
Final scoring and rating
A score was assigned for each bank on each of the sub-parameters, based on its rank on those
parameters. That was multiplied by the parameter's weight to arrive at the final score. The results
were aggregated to arrive at the final rankings based on the total score.
Banks not considered
In total, 38 banks were not considered due to mergers, liquidation, non-availability of annual reports
in the public domain for FY24, and foreign banks with balance sheet size of less than `25,000 crore.
QUANTITATIVE AWARDS (Upper Layer NBFCs)
For rankings based on pure financial performance, data was taken from published annual reports of
NBFCs for FY21 to FY24. The survey covered 10 NBFCs out of 15 classified in the upper layer
(NBFC-UL) by the RBI. One classified as a core investment company and four involved in mergers in
the last three years were not considered.
The ranking process
NBFCs were judged on three parameters—growth, size, and strength—divided into 29 sub-parameters:
Growth: There were six sub-parameters in this category, which included growth over FY23 in
loans, alongside three-year CAGR in loans; growth over FY23 in borrowings, alongside three-year CAGR
in borrowings; and growth over FY23 in operating profit, alongside three-year CAGR in operating
profit.
Size: There were two sub-parameters: size of operating profits and size of balance sheet as on
March 31, 2024.
Strength: There were five overarching sub-parameters:
Quality of assets: Increase in gross Stage-3 loans ratio: additions to gross Stage-3 loans
during the year as percentage of average gross loans (i.e. average of closing balance of FY23 and
FY24); PCR: provisioning as on March 31, 2024, for Stage-3 loans as percentage of gross Stage-3
loans as on March 31, 2024; net Stage-3 loans as ratio of net loans: gross Stage-3 loans closing
balance net of provisioning expressed as percentage of net loans as at March 31, 2024; gross stage 3
loan ratio: gross Stage-3 loan balance as a percentage of gross loan balance as on March 31, 2024;
impairment on loans to gross loans ratio: impairment on loans debited to the statement of profit and
loss including loans written off as bad debts (net of recoveries) in FY24 as a percentage of gross
loan balance as on March 31, 2024; gross Stage-2 loan ratio: gross Stage-2 loan balance as a
percentage of gross loan balance as on March 31, 2024; secured loans to total loans: secured gross
loans to total gross loans as on March 31, 2024.
Productivity and efficiency: Cost-to-income ratio: operating expenditure as a percentage of
operating income; cost-to-average asset ratio: operating expenditure as a percentage of average
total assets; absolute increase in ROA: basis points increase YoY in ROA; and percentage increase
YoY in ratio of operating profit to total income.
Quality of earnings: ROA: ratio of net profit to average total assets; ROCE: reported net
profit divided by average net worth; NIM: total interest income minus total interest expenses as a
percentage of average interest-earning assets; penalties imposed by RBI and other regulatory
authorities during the year; amount involved in frauds reported during the year as required to be
disclosed by the Master Direction-Monitoring of Frauds in NBFCs (Reserve Bank) Directions, 2016
issued by RBI**.
**NBFCs that did not provide fraud disclosure as required have been ranked the lowest.
Liability management: Diversified funding mix; debt-equity ratio: total of debt securities,
deposits, borrowings, and subordinated liabilities as a percentage of total equity share capital and
other equity as on March 31, 2024.
Capital adequacy and liquidity coverage: Capital adequacy ratio:
capital-to-risk-weighted-assets ratio for FY24; Tier I capital: total of equity capital and
disclosed reserves; liquidity coverage ratio: ratio of HQLA to total net cash outflows over the
following 30 calendar days.
Final scoring and rating
A score was assigned for each of the 29 sub-parameters, based on rank. The score were multiplied by
the parameter's weight. The results were aggregated to arrive at the final rankings.
QUALITATIVE AWARDS
Three qualitative awards recognised the initiatives undertaken by banks in innovation, fintech
collaboration, talent and workforce.
Best Bank in Innovation award: Banks had to describe innovation initiatives across five critical
focus areas: customer experience, product innovation, business model, service delivery, and digital
adoption. Every initiative was evaluated and ranked based on four parameters: area of impact,
uniqueness of solution, adoption of solution, and impact created by the initiative.
Best Bank in Fintech Collaboration Award: Banks were asked to describe collaborations with fintech
companies.
Best Bank in Talent & Workforce award: Banks were evaluated on interventions across four critical
focus areas under technology as an enabler to drive employee experience; innovation in talent
acquisition; innovation in talent management; initiatives around diversity, equity, inclusion, and
governance.
QUALITATIVE AWARDS
(Upper Layer NBFCs)
There were two awards:
Best Upper Layer NBFC Innovation award: Promising initiatives were evaluated across five focus
areas—customer experience, product innovation, business model, service delivery, and digital
adoption.
Best Upper Layer NBFC—Talent and Workforce award: NBFCs were evaluated on interventions across four
focus areas under technology as an enabler to drive employee experience in the employee lifecycle;
innovation in talent acquisition; innovation in talent management; initiatives around diversity,
equity, inclusion, and governance.
QUALITATIVE AWARDS
(Payments, lending and value added services segments)
Fintech companies were evaluated under three qualitative award categories: Best in Payments, Best in
Value Added Services, and Best in Fintech Lending. The key parameters considered were company health
(for example, years of operation, revenue generated per employee), business maturity (equity raised,
profitability metrics), business volumes, differentiation (basis business models, product features,
IP and technology, key focus and solutions), and adoption levels across customer segments and
geographies.
