The banking industry consists of public, private, foreign, regional rural and co-operative banks. Nearly 80% of the market share is dominated by public sector banks. Over the years, Indian private sector banks and foreign sector banks have exhibited improvements in their profitability, asset quality, lower credit costs and healthy capital reserves. On the other hand, public sector banks (PSBs) are facing decline in their earnings growth, reduction in profit margins, asset quality deterioration and increase in credit costs. The credit growth of overall SCBs substantially decelerated to 8.6% in financial year 2016 from 10.0% in financial year 2015. This was majorly due to stress in the balance sheet of public sector banks. Public sector banks witnessed a credit growth of only 3.7% in comparison to a growth of 24.9% growth in by private sector banks and 12.7% by foreign sector banks.

The total business growth of all SCB also declined to 7.5% in financial year 2016 as compared to 10.0% in financial year 2015. The credit growth has been the lowest in the last 53 years. During financial year 2016, public sector banks accounted for 72.8% share in the total business, registering a growth of only 3.2% in comparison to 8.4% in financial year 2015. The slow growth of bank credit can largely be attributed to banks adopting an extra cautious approach on account of rising NPAs and weak investment demand from corporate sector. The overall deposits growth of all SCBs witnessed a significant slowdown to 7.5% in financial year 2015 as compared to 11% in financial year 2016. The slowdown in the deposit growth can be attributed to lower interest rates, availability of alternate avenues of savings, tightening of KYC norms and lower household saving rates in past two years.

The present article is to study the factors which lead the business performance of selected banks in Coimbatore city. The opinion was collected from 600 respondents from the various parts of Coimbatore city.  

KEYWORDS: banking industry, asset, deposits, credit growth