Indian Economy After Independence - Public Sector and Private sector banks | 11th Economics : Chapter 8 : Indian Economy Before and After Independence
Chapter: 11th Economics : Chapter 8 : Indian Economy Before and After Independence
Public Sector and Private sector banks
Public
Sector and Private sector banks
Public Sector Banks
Public
sector bank is a bank in which the government holds a major portion of the
shares. Say for example, SBI is public sector bank, the government holding in
this bank is 58.60%. Similarly PNB is a public sector bank, the government
holds a stake of 58.87%. Usually, in public sector banks, government holdings
are more than 50 percent. Public sector banks are classified into two
categories: 1. Nationalised Banks 2. State Bank and its Associates.
In case
of nationalized banks, the government controls and regulates the functioning of
the banking entity.Some examples are SBI, PNB, BOB, OBC, Allahabad
However, the government keeps reducing the stake in PSU banks as and when they
sell shares. So, to that extent they can also become minority shareholders in
these banks. This is in accordance with the privatization policy.
Private Sector Banks
In these
banks, most of the equity is owned by private bodies, corporations,
institutions or individuals rather than government. These banks are managed and
controlled by private promoters.
Of the
total banking industry in India, public sector banks constitute 72.9% share
while the rest is covered by private players. In terms of the number of banks,
there are 27 public sector banks and 22 private sector banks.As part of its
differentiated banking regime, RBI, the apex banking body, has given license to
Payments Bank and Small Finance Banks (SFBs). This is an attempt to boost the
government’s Financial Inclusion drive. (But, there may be other problems).
As a
result, Airtel Payments Bank and Paytm Payments Bank Limited have come up.
How far
these banks would help the poor people is not known.
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