Overview of privatization of indian public sector banks in india

1. 1

2. Huge market size.
• Public sectorbankshavetotaldeposit ofRs84,86,215crore.
• Private sector bankshavetotaldeposit ofRs37,70,013crore.
• FDI inpublic sector bankingis allowedupto20%inIndia.
• FDI inprivate sectorbankingis allowedupto74%inIndia.
• Public sectortotal assetsstandingat Rs7,18,784crore.
• Private sector total assetsstandingat Rs3,69,363crore.
TheIndianbankingsystem consistsof 12public sector banks,22private sectorbanks,46foreign banks,56
regional rural banks,1485urbancooperativebanksand96,000rural cooperativebanks.
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3. • Public sector banks had 8 lakh employees in march 2018.
• Private sector banks had 4,20,000 employees in march 2018.
Asof 2018publicsector banksaccountsfor 62%of totalbankingassets and58%of totalincome,
therest byprivate sectorbanks.
Thegross-nonperforming assets inIndianpublicsector banksarevalued ataroundRs
400000crore whichrepresents 90%oftotalNPAs.
• Great financialinclusion throughPSBs:
• PMJDY(PradhanMantriJandhanYojana).
• Totalbeneficiaries- 41.16crores, Total balance-1,31,461crore
• Digitalization.
• UPIrecorded 1.25billion transactionsin March2020,valued at Rs2.06lakhcrore.
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4. 95.8
4
INDIAN
OVERSEAS
BANK
94.4
4
UCO BANK
92.4
9
BANK OF
MAHARASHTR
A
89.1
0
BANK OF
INDIA
GOVERNMENT
SHAREHOLDING
PERCENTAGE IN PSBs
4

5. 89.0
7
UNION BANK
OF INDIA
88.0
6
INDIAN BANK
85.5
9
PUNJAB
NATIONAL
BANK
83.0
6
PUNJAB AND
SINDH BANK
GOVERNMENT
SHAREHOLDING
PERCENTAGE IN PSBs
5

6. 78.5
5
CANARA BANK
78.5
5
CENTRAL
BANK OF
INDIA
71.6
0
BANK OF
BARODA
57.6
4
STATE BANK
OF INDIA
GOVERNMENT
SHAREHOLDING
PERCENTAGE IN PSBs
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7. • The privatization of any institution is the process of transferring the
ownership from the government to the private hands.
• For a bank to be privatized government should own less than 50% of
shareholding or private parties should own more than 51% of stake.
Indiahas12NationalizedBankswhichactunderTheReserve Bankof Indiaand
governed byIndianGovernment.
Indiawent for privatizationinthehistoric reforms budget of 1991,alsoknownas NEW
ECONOMICPOLICYor LPG policy.
Governmentbankscanbeconverted into private banksintwo ways.
1. Bywithdrawalof thegovernment from ownership andmanagementof publicsector banks.
2. Byoutright saleof publicsector banks.
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8. Privatization is considered to bring more efficiency and objectivity to
the bank.
Privatizationis importantto economyandscaleup ahealthy competitioninthemarketand
reduces theprice.
Having privateownership ofbankswill bring changesinstructuring incentivesand
accountability.
Mainpurpose behind theplanofprivatizationofPSBs isto stallfuturebailouts byusing
taxpayersmoney.
Big economicevents like demonetizationandbankmergers brought a lot ofuncertainty andchangeswith
them.
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9. Benefits of privatization of bank
Increased efficiency.
Issue of dual control will be resolved.
Clearing bad loans
Risk mitigation
Strict against loans and frauds.
Help to reduce burden on GOI.
Encourages foreign investments.
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10. Privatization of Banks will definitely have some positive and also some
adverse effect directly on society and indirectly on economy.
Privatizationof bankswill behelpful ingetting a better customerservice. Itwill also effect the
economyandhelps ingrowth.
Privatizationof IndianBankswill remove irregularity andbring punctualityandwill led to
accountabilityin theservice.
Private banks’profit driven motivescancreate economicgap.
Better utilizationof taxpayersmoney.
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11. Issue of
Governance
here
PSBs as an
instrument for
social justice.
here
Peoples
trust in
Public sector
banks.
Government
scheme will
not work in
private sector
banks.
To what
extend govt
will be
influential
after
privatization.
Issues Related To Privatization of Banks
11

12. 01
Making
the poor
poorer.
Adverse
effect on
employe
es.
02 03
opens the
way for
the
dominatio
n of the
economy
by foreign
capital.
Prone to
failure.
04
DARK SIDE OF PRIVATIZATION
OF PSBs
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13. 02
NPAs
Quick resolution of
NPAs beyond NCLT
and IBC.
Governance
For better governance
interference and
intervention from
government should be
minimal.
Structure
Instead of rapid re-
privatization of public
sector banks
government should
come up with better
governance structure.
03
01
Recommendations
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14. CONCLUSION
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15. 01
There are some
adverse aspects of
privatization of
banks but there are
some good aspects
of it.
02
Both kind of
banking structure
are essential for
the economy. They
both have some
deficiencies.
Let Both thrive with
Improved governance and
professionalism and
reduce political
interference for PSBs to
improve their overall
performance.
03
OPEN OPEN OPEN
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16. THANK YOU
Yashi Agrawal-
20DM252
Abhishek Varma-
20DM258
Vishal Shinde-
20DM246
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