PRIVATE BANK VS PUBLIC BANK

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PRIVATE BANK VS PUBLIC BANK Ten new private banks were licensed in the country between 1980 and 2000. Since then, there was an atmosphere of competition and improvement in services in the banking sector. Along with private banks, facilities like ATM, mobile banking, internet banking, SMS alerts etc. also came on the market. It also impacted the functioning of public sector banks and brought about fundamental changes in the way they function. At present, there are 21 public banks and 22 private banks in the country. Apart from this, there are 56 Regional Rural Banks. About 70% of the state-owned banks are in the current banking market of the country. Due to the competition of private banks, the distance between spending and profits in the banking sector is steadily decreasing. According to a report, the profit per employee of private banks is 10.6-12.4% while in case of public banks it is only between 5.5% -7.00%. Altogether 10 lakh more employees are working in all the government and private banks of the country. In recent years, thousands of public sector bank employees moved to the private sector. Even in the case of lending, the growth rate of public sector banks is less than that of private sector banks. The lending rate of public banks increased by only 0.6% in March 2017 while the credit growth rate of private banks was 17.1% in March 2017.

In the case of bank deposits, private banks were ahead. In March 2017, the deposit growth rate of public sector banks was 6.5% while the deposit growth rate of private banks was 19.6%.


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