A Comparative Study of a Public Sector

Bank and a Private Sector Bank in India

(Based on Balance Sheets as at 31st March
– Current Financial Year)
 1. Introduction
The Indian banking system consists of public sector banks
and private sector banks, both playing a crucial role in
financial intermediation and economic development. Public
sector banks focus on financial inclusion and priority sector
lending, while private sector banks emphasize efficiency,
technology, and profitability. This project presents a
comparative study of one public sector bank and one private
sector bank based on their Balance Sheets and financial
performance.
 2. Objectives of the Study
 To study the composition of deposits of a public and a private
sector bank.
 To compare the percentage of demand deposits to total deposits.
 To analyze profitability of both banks.
 To study the composition of loans and advances.
 To compare total interest earned.
 To comment on which sector bank is better managed from the
profit point of view.
 3. Research Methodology
Type of Study: Descriptive and analytical
Source of Data: Secondary data
Data Sources:
Annual Report of Punjab National Bank (Public Sector Bank)
Annual Report of ICICI Bank Ltd. (Private Sector Bank)
Period of Study: Financial year ending 31st March (current year)
4. Profile of Selected Banks
 4.1 Punjab National Bank (PNB)
Punjab National Bank is one of the largest public
sector banks in India, with a strong presence in rural
and semi-urban areas. It plays a significant role in
priority sector lending and government-sponsored
schemes.
 4.2 ICICI Bank Ltd.
ICICI Bank is one of the leading private sector banks
in India, known for its strong retail banking franchise,
advanced technology, and efficient risk management
practices.
 5. Meaning of Deposits
Bank deposits are funds placed with banks by
customers. Deposits form the primary source of funds
for banks and are classified as:
o Demand Deposits
o Savings Deposits
o Term Deposits
6. Composition of Deposits
 6.1 Deposits of Punjab National Bank
Higher proportion of savings and term deposits
Strong base of CASA deposits due to government accounts
and rural outreach
Demand deposits form a moderate share of total deposits
 6.2 Deposits of ICICI Bank
Higher CASA ratio
Larger share of demand and savings deposits
Strong retail and corporate deposit base
7. Percentage of Demand Deposits to Total Deposits Analysis:
ICICI Bank has a higher proportion of demand deposits, which
reduces cost of funds and improves profitability.

Particulars PNB ICICI Bank

Demand Deposits (%) Lower Higher
 8. Meaning of Profitability in Banking
Profitability indicates a bank’s ability to generate
income over expenses. Key indicators include:
Net Profit
Return on Assets (ROA)
Net Interest Margin (NIM)
9. Profitability Analysis
 9.1 Profitability of Punjab National Bank
Improvement in net profit compared to previous
years
Profitability affected by higher operating costs
and provisioning
Lower ROA compared to private sector banks
 9.2 Profitability of ICICI Bank
Consistently high net profit
Strong ROA and NIM
Better cost efficiency and asset quality
10. Composition of Loans and Advances
 10.1 Loans of Punjab National Bank
Higher share of priority sector lending
Significant exposure to MSMEs, agriculture, and
government schemes
Relatively lower share of high-yield retail loans
 10.2 Loans of ICICI Bank
Higher proportion of retail loans
Well-diversified corporate loan portfolio
Better credit appraisal and recovery mechanisms
11. Total Interest Earned

Analysis: ICICI Bank earns higher interest income due

to a larger retail loan portfolio and better asset utilization.

Particulars PNB ICICI Bank

Total Interest Earned Moderate Higher
 12. Cost of Funds and Efficiency
PNB has a relatively higher cost of funds
ICICI Bank benefits from low-cost CASA
deposits
Private sector bank shows higher operational
efficiency
 13. Asset Quality Comparison
PNB has improved asset quality but still carries
legacy stress
ICICI Bank maintains lower NPAs and better
provisioning coverage
 14. Use of Technology
PNB is adopting digital banking steadily
ICICI Bank leads in digital platforms and
customer experience
 15. Risk Management Practices
ICICI Bank has advanced risk management systems
PNB follows regulatory norms with relatively
conservative lending
 16. Social Banking Role
PNB plays a major role in financial inclusion
ICICI Bank focuses more on profitability with
selective inclusion initiatives
 ICICI Bank (Private
Criteria PNB (Public Sector)
Sector)
Demand Deposits Lower Higher

Profitability Moderate High

Loan Composition Priority sector oriented Retail & diversified

Interest Earned Moderate Higher

Management Efficiency Average Superior

 18. Findings of the Study
Private sector bank has a higher proportion of demand
deposits.
ICICI Bank shows better profitability indicators.
PNB focuses more on social and developmental
objectives.
Efficient management improves profit performance.
1) Deposits & Deposit Composition

Item Punjab National Bank (PNB) ICICI Bank

₹15,65,744 crore (Global)
Total Deposits ₹16,10,348 crore (ICICI Bank)
(Business Standard)
CASA Deposits (Current + ₹5,73,543 crore (≈36.6% of total ₹6,737.29 billion (≈41.9% of total)
Savings) deposits)* (ITI Securities) (ICICI Bank)
– Current Deposits ₹75,114 crore (ITI Securities) ₹2,329.57 billion (ICICI Bank)
– Savings Deposits ₹4,98,429 crore (ITI Securities) ₹4,407.72 billion (ICICI Bank)
CASA Ratio ~36.6% (derived) 39.0% (ICICI Bank)
Deposits & Deposit Composition

Interpretation:
ICICI Bank’s CASA ratio
(~39%) is higher than PNB’s
(~36.6%), indicating relatively
cheaper core deposits for
ICICI, which can support better
margins and profitability.
 Loans & Advances
Item PNB ICICI Bank

₹11,17,407 crore (Global

₹13,41,766 crore (Advances)
Total Advances / Loans Advances) (Business
(ICICI Bank)
Standard)
Advances increased; exact
~13.6% increase (Business annual % estimates ~14–
Loan Growth (YoY)
Standard) 15% (from MD&A) (ICICI
Bank)
Retail significant
Not official disclosed
Retail Loan Share (historically ~50%+ of book)
publicly
needs official source
 Profitability (Profit, NIM)

Metric PNB ICICI Bank

Not available in public summary; ₹472.27 billion (~₹47,227 crore)*

Net Profit (FY 25)
needs Annual Report (ICICI Bank)
~4.32% (from integrated report)
Net Interest Margin (NIM) Data not publicly summarized
(ICICI Bank)
Grew ~11% in recent quarter
Net Interest Income (NII) Not available
(Reuters) (Reuters)
 Asset Quality / Ratios

Metric PNB ICICI Bank

~1.67% at March 2025

Gross NPA Ratio Not in summary
ICICI Bank
Can be calculated approx
Credit–Deposit Ratio ~71.37% Business Standard
~83% (Advances/Deposits)
 Sample Comparative Summary (Key Ratios)
Metric PNB ICICI Bank

CASA Ratio ~36.6% ~39.0% (ICICI Bank)

Total Deposits (₹ Cr) 15,65,744 (Business Standard) 16,10,348 (ICICI Bank)

Total Advances (₹ Cr) 11,17,407 (Business Standard) 13,41,766 (ICICI Bank)
Gross NPA Need data ~1.67% (ICICI Bank)
Net Profit Need data ∼₹47,227 crore (ICICI Bank)

Higher CASA supports lower funding

CASA Funding Cost Advantage Lower CASA than ICICI
cost (ICICI Bank)
 19. Conclusion
From the profit point of view, the private sector bank
(ICICI Bank) is better managed due to higher demand
deposits, efficient loan composition, better asset
quality, and superior profitability. However, public
sector banks like PNB play an essential role in
economic development and financial inclusion.
 22. Bibliography
Annual Report of Punjab National Bank
Annual Report of ICICI Bank Ltd.
RBI Publications