KOLKATA: Public sector banks are stepping up their push into wealth management, traditionally dominated by private lenders, by leveraging their large customer base, digital capabilities and expanded advisory services.
The move is aimed at improving customer engagement as household savings shift from bank deposits to market-linked instruments and risk products. Indian Bank plans to set up a wealth management vertical targeting high net worth individuals, while sectoral leader State Bank of India aims to grow its wealth assets under management fivefold to Rs 15 lakh crore by 2030.
“The rationale for setting up a wealth management vertical is rooted in a fundamental shift in both the market landscape and the bank’s own growth imperatives,” Indian Bank managing director Binod Kumar told ET. “At a macro level, India’s household savings are increasingly moving away from deposits toward market-linked and insurance products. In this context, the fastest-growing share of customer wallets is moving outside the bank’s current core offerings, making a strong wealth proposition essential to remain relevant.”
Indian Overseas Bank is also evaluating entry into the segment, according to managing director Ajay Kumar Srivastava. “This is under active consideration,” he said.
Live EventsThe wealth management market in India is estimated to double to $2.3 trillion by FY29 from $1.1 trillion in FY24, while the country’s HNI population is projected to double to 1.7 million by 2027, according to reports.
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To be sure, Bank of Baroda and Uco Bank currently offer investment services to its customers across income levels through partnerships with fintech firm Fisdo giving customers access to mutual funds, systematic investment plans and tax-saving products.
Chennai-based Indian Bank also has a tie-up with Fisdom, but is now looking to build a broader platform offering personalised services to HNIs.
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“A formal wealth management vertical will strengthen customer stickiness, improve CASA quality and enable a shift toward fee-based income, reducing reliance on interest income,” Kumar said.
“This represents a strategic opportunity to unlock value from its existing customer base, where a significant portion of investment needs is currently met outside the bank.”
Bank deposits have steadily lost share in household financial savings, declining to 35% in FY25 from more than 58% in FY12, after falling to a low of 31.9% in FY22, according to the Economic Survey 2025-26. The share of equity and mutual funds in annual household financial savings increased to over 15.2% in FY25 from 2% in FY12.
Private banks, which have long dominated the wealth management space, offer specialised services for high net worth individuals, including personalised banking, lending and investment solutions. Some also provide broader services such as financial planning, tax optimisation and estate planning.