PSBs lag behind in digi transaction values: Report

The public-sector banks (PSBs) are lagging behind the counterparts from the private sector when it comes to the digitisation of the transaction, reveals a study.

According to the Britain-based Elara Capital’s report on Banking and Financials reveals that in terms of market share for real-time gross settlement, only two PSBs make it to the top 10 – SBI with 10.4% is at the second slot, while IDBI Bank, which has been under the prompt corrective action of the Reserve Bank, is at 10th slot with 2.2% market share. Private sector lender HDFC bank leads in RTGS transfers with 22.6% market share.

In terms of the market share for NEFT transactions as well, only two PSBs – SBI at second slot and loss-ridden Punjab National Bank (PNB) made it to the top 10, while all other banks in the top 10 are from the private sector, the study shows.

For market-share of mobile transaction, three out of top 10 banks are PSBs – SBI, Bank of Baroda which is about to be merged with Vijaya Bank and Dena Bank, and Bengaluru-based Canara Bank.

For credit cards, only one PSB – SBI -- makes to the top 10 in terms of the market share.

India’s largest private-sector lender HDFC Bank leads the banking system in terms of market share for the digital transaction: NEFT (15.2%), mobile transactions (16.1%) and credit card transactions (28.1%).

“Four banks currently dominate India’s digital banking space. Of the four, three are private — HDFC Bank, ICICI Bank and Axis Bank and one is public sector, SBI — with more than two-thirds market share. While SBI is the leader in volume terms, it lags its three peers in value terms in most payment businesses,” the report said.

During December 2015-18, domestic banking system posted a credit card CAGR of 25% and debit card CAGR of 14.2%. During the same period, credit card transaction value increased by 37% CAGR and debit card transaction value at 52% CAGR.

“The sharper rise in debit card transaction value could be attributed to demonetisation,” says the report.