Banking: Comparative Analysis of Public and Private Sector Banks

Topics: Bank, Central bank, Banking in India Pages: 11 (3809 words) Published: February 6, 2013


The economic reforms in India started in early nineties, but their outcome is visible now. Major changes took place in the functioning of Banks in India only after liberalization, globalisation and privatisation. It has become very mandatory to study and to make a comparative analysis of services of Public sector Banks and Private Sector banks. Increased competition, new information technologies and thereby declining processing costs, the erosion of product and geographic boundaries, and less restrictive governmental regulations have all played a major role for Public Sector Banks in India to forcefully compete with Private and Foreign Banks. this paper an attempt to analyze how efficiently Public and Private sector banks have been managing NPA. The last decade has seen many positive developments in the Indian banking sector. The policy makers, which comprise the Reserve Bank of India (RBI), Ministry of Finance and related government and financial sector regulatory entities, have made several notable efforts to improve regulation in the sector. The sector now compares favourably with banking sectors in the region on metrics like growth, profitability and non-performing assets (NPAs). A few banks have established an outstanding track record of innovation, growth and value creation. Banking in India was defined under Section 5(A) as "any company which transacts banking, business" and the purpose of banking business defined under Section 5(B),"accepting deposits of money from public for the purpose of lending or investing, repayable on demand through cheque/draft or otherwise". In the process of doing the above-mentioned primary functions, they are also permitted to do other types of business referred to as Utility Services for their customers (Banking Regulation Act, 1949). During Bruisers' time, three Presidencies’ Banks were opened in Bengal (1809), Bombay (1840) and Madras (1843) with powers to isue Notes.

The table below gives a wide view about the availability of the services in the various Public and Private sector banks: Schemes| Public Sector Banks| Private Sector Banks|
Sweep in Facility inSaving Account| Not available in these banks| Available in these banks| Demat Account| Available in some banks| Available in these banks| Minor Account| Minor can only open an account jointly with his guardian.| No such conditions is applicable over here. A minor can open an account independently.| Women Account| No Special benefits are provided| Special benefits are provided to theaccount holders| Investments| These banks do not deal in goldinvestment| These banks offer the customers toinvest in pure gold| Online Shopping| This facility is not available in these banks| This facility is available in these banks| Internet Banking| Not Satisfactory| Very efficient|

Time Norms| Time norms for providing the services are quite long and complicating. The customers have to wait for a long time for getting these services as in most cases these norms are not followed.| Time norms for providing the services are less. The customers do not have to wait for a long time to get these services| Core Banking Facilities| Not so efficient in public sector banks.| All banks have this facility and are providing them efficiently.| Interest Rates are deposits| Rate of return is low on deposits with the banks| Rate of return is high on deposits with the banks| Interest Rate on loansand advances| Rate of interest levied on loans and advances is low. Public Sector banks are able to provide as better services as those by private sector banks| Rate of interest levied on loans and advances is high. Private sector banks offer more and better services than public sector banks to give the best to its customers| Working Hours...
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