FY24: Public Sector Banks Uphold Customer Welfare as Private Banks Surge in Commissions
Financial Year 2024 data shows a sharp gap in commission income ratios between Public Sector and Private Banks. Private lenders like Axis Bank and YES Bank lead, as commission income from insurance and financial products becomes a key revenue stream beyond interest income.
Author: Kalyani Mali
Published: 12 hours ago
Commission income to total income ratios for 15 major Indian banks in Financial Year 2024 (FY24) highlight their earnings from insurance, marketing, and distribution businesses. Axis Bank had the highest ratio at 25.2%, while HDFC Bank reported the highest absolute income at ₹6,467 crore. Public sector banks (PSBs) like Canara Bank, Indian Bank, and Central Bank of India showed lower ratios and income figures.
Private Banks Lead in Commission Income
Private sector banks have clearly taken the lead in leveraging commission-based revenue. Axis Bank tops the chart with an impressive 25.2% commission income to total income ratio, followed closely by IDFC First Bank (23.6%), YES Bank (23.3%), and IndusInd Bank (22.1%). These banks have aggressively pursued distribution businesses to supplement their core operations.
Image: Commission income to total income ratios and distribution earnings of major Indian banks in FY24.
Courtesy: :@BahlKanan
Public Sector Banks Lag Behind
Public sector banks continue to show significantly lower ratios, reflecting low reach in third-party product distribution. Punjab National Bank (PNB) (7.9%), Bank of Baroda (BoB) (6%), Union Bank (4.5%), and Canara Bank (3.3%) trail their private peers. Although they are among the largest banks, their fee-based income remains relatively lower compared to some other banks.
A public sector bank employee summed up the sentiment on social media: “Look at these two reports — you’ll see how private banks work for commissions, while public sector banks work for the country. We may not earn as much in commissions, but we’re doing the real work — financial inclusion. Over 42 crore Jan Dhan beneficiaries and ₹2 lakh crore in deposits speak for themselves.” The comment reflects a growing pride within PSBs, highlighting their role in nation-building over revenue maximisation.
Image: Post highlighting the contribution of Public Sector Banks to financial inclusion, serving 42 crore+ Jan Dhan beneficiaries despite lower commission income ratios.
Source: @sunnyjamshedpur
SBI’s Mixed Position: Low Ratio, High Absolute Income
The State Bank of India (SBI) holds a 13.3% commission income ratio, lower than many private banks. However, it generated ₹3,893 crore from insurance and distribution services, indicating strong volume despite a lower ratio. SBI’s scale allows it to generate significant absolute income even with conservative penetration rates.
FY24 data shows Private Sector Banks generally have higher commission income to total income ratios compared to Public Sector Banks. Private banks like Axis Bank and YES Bank recorded ratios above 20%, while several public sector banks had ratios below 10%. This reflects differences in income composition across the banking sector.
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