Indian Corporates Optimistic, Strengthen Ties With Major Banks

Indian businesses are teaming up with the country's major banks to boost their expansion, international presence, and efficiency.

According to the recent Coalition Greenwich India Corporate Banking Study, almost 90 per cent of large and middle-market Indian companies are optimistic about their future prospects, with a third expressing high positivity for the near-term outlook.

This optimism stems from India's robust economy, driven by favorable demographics, a strong and growing consumer base, and increased foreign investment due to companies like Apple diversifying their supply chains away from China. The Indian government's efforts to create a more business-friendly environment have also contributed to the current favorable conditions for corporates.

Gaurav Arora, Coalition Greenwich Global Head of Competitor Analytics, attributes this positive development to structural reforms introduced over the past decade and the changing geopolitical landscape.

The study also reveals that from 2021 to 2022, a higher percentage of Indian corporates chose to work with major private sector banks for corporate banking services. Meanwhile, the involvement of large foreign banks also saw an increase during the same period.

While larger private and foreign banks experienced growth, some smaller banks, including certain public sector banks, faced challenges. State Bank of India managed to maintain corporate relationships better than its smaller counterparts, contributing to the consolidation trend among major banking providers. Consequently, the share of Indian corporates working with smaller private sector banks decreased.

In the realm of Indian Large Corporate and Middle Market Banking, HDFC Bank emerged as the leading local bank, surpassing State Bank of India. For middle market corporates, HDFC maintained its top position among local banks and shared the title of 2023 Greenwich Quality Leaders with ICICI.