India's Best banks Survey: Why it is a golden period for Indian banks

Nearly three decades is a long time to track the evolution of India’s banks and non-banks. The latest BT-KPMG Survey of India’s Best Banks and NBFCs for 2023-24 takes a deep dive into the forces shaping this sector. From the burden of massive non-performing assets, our banks today are not just resilient but thriving. A recent S&P Global Ratings note highlights this resilience, citing stabilising asset quality and a projected decline in bad loans in the banking sector to 3% of gross loans by the end of the financial year.

Yet, as Anand Adhikari notes, headwinds remain. Interest rate volatility, liquidity pressures, and a decline in low-cost deposits are forcing banks to rethink strategies, including raising deposit rates—moves that could compress net interest margins and profitability. Rising delinquencies in micro-loans and tighter capital requirements for unsecured lending also signal potential risks.

The 29th BT-KPMG survey evaluated India’s banks and NBFCs across over 35 quantitative parameters, alongside qualitative inputs judged by a distinguished jury chaired by Jayant Sinha, former Chair of the Standing Committee on Finance and MoS Finance. Other eminent jury members were Kalpana Morparia, Alice G. Vaidyan, Subhash Chandra Garg, Dinesh Kumar Khara, Gunit Chadha, and A.P. Hota.

As Sinha puts it, the Indian financial system is doing extraordinarily well right now. “The hard work of the last 10 years to restore strength and resilience to the Indian financial system is paying off. Whether we look at our public sector banks, our private banks, or NBFCs, all are doing very, very well,” he says. Khara attributes this success to early risk identification, robust mitigation measures, and strong capital positions. Veteran banker Morparia sums it up best. “I have been in banking now for 49 years, and this is truly the golden period,” she says.

The jury picked ICICI Bank as the Bank of the Year; it also emerged as the Best Large Indian Bank. State Bank of India won the Best Bank in Innovation award, while Bajaj Finance emerged as the Best Large NBFC. J.P. Morgan won the Best Foreign Bank award, and the Lifetime Achievement Award went to Dinesh Kumar Khara, former SBI Chairman.

This edition also puts the spotlight on Ashok Vaswani, who occupies the C-suite at Kotak Mahindra Bank, which has moved up a notch to No. 3 among Large Indian Banks in the BT-KPMG study. In an exclusive interview, the global banking veteran talks about his vision for the bank, and says technology is the new arms race in the financial services space.

Meanwhile, the Reserve Bank of India is set for a fresh chapter under its new Governor, Sanjay Malhotra. With the RBI intensifying its focus on compliance and governance, the former IAS officer is expected to bring a fresh perspective to the growth-versus-inflation debate. As Surabhi and Teena Jain Kaushal write, the key question for 2025 is whether the RBI will cut rates early in the year to spur economic growth, which slowed to 5.4% in Q2FY25—well below expectations.