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Best Banking Stocks to Buy In India 2023

04 Dec 2023

What are the best bank stocks to buy in 2023? You may have asked yourself this as you start a fresh year of investing in the stock market. In the indices in India, some banking stocks hold some of the most weight. This is because the banking sector in India has witnessed considerable growth over the past few years. Banking is a key sector of the Indian economy. As an investor, you may want to consider this sector seriously.  

The Best Bank Stocks to Buy - Why this sector?

Generally speaking, the banking sector can be classified into public-sector banks and private-sector banks. The banks in the public sector are managed, controlled and owned by the Indian government. The banks in the private sector are controlled, managed and owned by private institutions or private parties. The regulatory authority that governs and oversees the banking sector within India is the Reserve Bank of India (RBI).  

In the past few years, the banking sector has witnessed a fair deal of growth and development, and certain banks have expanded operations to meet demands. The growth of the banking sector has largely been driven by such factors as increasing disposable income, rising economic growth, a surge in urbanisation, and a booming demand for loans. With the growth of the banking sector in India, the best bank stocks to buy in India are compelling investors to invest in this sector. 

Technology has also had its part to play and has made processes like opening new accounts much easier than previously. Online banking is available in the furthest parts of the country and the entire process of banking and investing can be done online. The ease of banking operations has played a large role in compelling people to get into the banking sector with enthusiasm. There is also a growth in exposure/education of people, with more and more households starting to coax their children to learn about banking and start accounts while in their youth. 

Which are the best bank stocks to buy in 2023?

The banking sector may be considered by some as the most reliable and steady sector to invest in. Banks play a larger than life role in the Indian economy, and for many years to come, the sector is bound to be stable with a growing array of promising stocks for investment. Here are some of the best bank stocks to buy in 2023: 

  • HDFC Bank 

One of the largest banking corporations in the private sector, HDFC Bank has proved its worth as one of the best stocks to buy in the sector for a while now. The company is well known for its robust financial performance and the ability to adapt to challenging market conditions. The bank has consistently managed to deliver healthy earnings growth and has expanded operations rapidly and easily in both urban and rural India. 

  • State Bank of India 

The State Bank of India (SBI) has a reputation that precedes itself and is the largest public-sector banking institution in the country. The company boasts a market capitalisation of INR 4.75 trillion. 

The State Bank of India has a large network of more than 28,000 branches and 50,000 ATMs across the length and breadth of India. This makes it easily accessible to SBI customers. Furthermore, SBI has seen success in its expansion in the international market. The bank has been growing its global presence in several countries too. 

  • ICICI Bank

ICICI Bank, a leading private sector bank in India, with a market capitalisation of INR 6.17 trillion,  has a diverse business model. It has a healthy presence in corporate banking, retail banking and international banking. The bank has a robust distribution network and has 5,000+ branches with over 15,000 ATMs across the country. Additionally,  the bank has achieved expansion with its presence in the global market, having a network of operations overseas. Considered one of the best bank stocks to buy in India, this one may be a winner. 

  • Yes Bank

Yes Bank is a leader in private-sector banking in India, having a market high market capitalisation. Yes Bank has a sturdy retail banking franchise and has seen great success in expanding its global arm in the space of digital banking. The bank boasts an innovative smartphone app among other digital initiatives that draw in a wide customer base. Yes Bank has also witnessed success in business model diversification, focusing on wealth management and corporate banking. 

  • Axis Bank

Axis Bank, another bank gaining momentum in retail and corporate banking, is a private-sector bank with a market capitalisation of over $30 billion. Axis Bank has a diversified business model and a strong presence in international banking. With a network that is spread over 4,000 branches and 10,000+ ATMs across the nation, this is a bank with a wide reach in India. The bank is a global player with inroads in 10 countries. 

  • Punjab National Bank

If you are interested in a public sector undertaking in the banking industry, the Punjab National Bank stock is worth looking into. Boasting one of the largest public sector Indian banks, this banking corporation has a market capitalisation of over $8 billion. The organisation has 7,000 branches with 10,000 ATMs and a pan-India presence. The key areas of banking that this bank is popular for are agriculture banking, corporate banking and retail banking. With a presence in international markets, the bank has managed to diversify its business model and expand its reach. 

Consider Banking on Bank Stocks

When you open a demat account intending to invest in the stock market, you can look at a few bank stocks to diversify your portfolio. It is important to note that while bank stocks may be considered strong investments, it is always good to do your research into any company’s fundamentals. This is true for banking stocks or an upcoming IPO of any other sector as well. 


Related Articles: How to Open a Demat Account Without a Broker | Factors to Keep in Mind While Opening a Demat account | Factors to Consider When Opening a Demat Account 


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