1. 8 SHODH, SAMIKSHA AUR MULYANKAN
International Indexed & Refereed Research Journal, ISSN 0974-2832,(Print) E- ISSN-2320-5474, December,2013, VOL-V * ISSUE- 59
Introduction
This paper provides a sound coverage of all
the services provided by the Private Sector Banks and
the Public Sector Banks. It contains a review of what
the people think of these services.
• What kind of accounts they hold in these banks?
• How often do they transact with the Government
bank & private banks?
• How user friendly the bank and their services are?
• What all services are being offered to them?
• Their viewpoints regarding the services provided to
them.
Bank has moved a long way from the safe deposit
houses that they were. They have now taken the role
of an agent, a Private sector investor etc . . . In simple
words they have increased their scope by a wide mar-
gin. Until Private sector banks were introduced bank-
ing for Indians was an inevitable, time consuming and
a complicated activity.
These Private sector banks are providing new and
innovative services like
• Tele banking
• Internet banking • Tele Draft facility
• Credit card • Cash delivery at door step and
• ATM
IndianFinancialSystem
Commercialbanks
Financial institution
Financial institutions
Non-banking financial companies
Long term instruments
FinancialSystem
Financial instruments
Short term instruments
Capitalmarket
Research Paper -Commerce
December , 2013
AComparativeAnalysis The Services Provided By
Government Sector Banks With Private Sector Banks
*Anil Kumar
* Assist. Professor , Shah Satnam ji Boys'College , Sirsa.
Banking Industry in India has always revolved around the traditional function of deposits and credit. Their role had been
defined as to assist the overall economic growth with majority of share being controlled by the Government of India in most
of the banks. But with the process of liberalization, the banking industry has also undergone tremendous change in the last
5 years. The market, which was largely controlled by the public sector banks, has now been facing stiff competition not only
from foreign players but also from the new generation private sector banks. The rules of the game have been changing with
the RBI introducing new norms to make banks more accountable and to adopt the practices followed worldwide.
A B S T R A C T
Financialmarkets
Money market
Opportunity Spectrum For IndianBanks
DomesticOpportunities:-
• Consumer Finance • Low Penetration
• Rising Income Levels • GrowingConsumer Class
• Robust Industrial Investment Outlook • L a r g e
Infrastructure Development Plans • Rural Banking
• UntappedMarketforFinancialProducts&Services
• Growing Transaction Sizes Leading to Higher
Profitability • Sustained Economic Growth
GlobalOpportunities:-
• Vast Indian Diaspora (About 20 million people of
Indian origin)
• Permanent Residents Overseas
• BothIndiaLinkedandLocalPersonalBankingNeeds
• Small and Medium Businesses
Commercial banks
Financial
institution
Financial
institutions
Non-banking
financial
companies
Long term
instruments
FINANCIAL
SYSTEM
Financial
instrument
s
Short term
instruments
Capital market
Financial
markets
Money market

2. 9SHODH, SAMIKSHA AUR MULYANKAN
International Indexed & Refereed Research Journal, ISSN 0974-2832,(Print) E- ISSN-2320-5474, December,2013, VOL-V * ISSUE- 59
• Global Orientation of Indian Businesses •Growth
in Foreign Trade • Increase Export Revenues
• Emergence of Indian Multinationals
Challenges In Indian Banking Industry
It is by now well recognized that India is one
of the fastest growing economies in the world. Evi-
dence from across the world suggests that a sound and
evolved banking system is required for sustained eco-
nomic development.. The challenges that the banking
sector in India faces are: -
Interest Rate Risk: -
Interest rate risk can be defined as exposure
of bank's net interest income to adverse movements in
interest rates. A bank's balance sheet consists mainly
of rupee assets and liabilities. Any movement in
domesticinterestrateisthemainsourceofinterestrate
risk
Non-PerformingAssets:-
Thebestindicatorofthehealthofthebanking
industry in a country is its level of NPAs. Given this
fact, Indian banks seem to be better placed than they
were in the past. A few banks have even managed to
reduce their net NPAs to less than one percent (before
the merger ofGlobal Trust Bank into Oriental Bank of
Commerce,OBCwasazeroNPAbank).Butasthebond
yields start to rise the chances are the net NPAs will
also start to go up. This will happen because the banks
have been making huge provisions against the money
they made on their bond portfolios in a scenario where
bondyieldswerefalling.ReducedNPAsgenerallygives
the impression that banks have strengthened their
credit appraisal processes over the years.
TheUrgetoMerge:-
In the recent past there has been a lot of talk
aboutIndianBankslackinginscaleand size.TheState
Bank of India is the only bank from India to make it to
thelistofTop100banks,globally.MostofthePSBsare
eitherlookingtopickupasmallerbankorwaitingto be
picked up by a larger bank. The central government
also seems to be game about the issue and is seen to
be encouraging PSBs to merge or acquire other banks.
Future
The future of Indian Banking represents a unique
mixtureofunlimited opportunitiesamidstinsurmount-
able challenges. On the one hand we see the scenario
represented bythe rapid processofglobalizationpres-
ently taking shape bringing the community of nations
in the world together, transcending geographical
boundaries, in the sphere of trade and commerce, and
even employment opportunities of individuals. All
theseindicatenewlyemergingopportunitiesforIndian
Banking.
ImprovingDelivery&ReducingCosts
ATMs rapidly became popular because of a
servicethatwasquicker,less errorprone and available
24/7.However,ATMsnowlooksecond-bestforevery-
thing except cash, when compared with individual
access via the telephone, PC, TV or mobile phone; all
of which are private, flexible and don't have queues.
Strategic Challenges
Credo is currently investigating a number of
strategic issues that banks are grappling with:
1. Does it still make sense to have a transactional/
currentaccountasthecoreofthecustomerrelationship?
2. Can you develop and maintain a major financial
services brand without a big current account base?
3. Is it time to reduce costs by sharing or outsourcing
"commoditised" traditional delivery infrastructure
(i.e. branches,ATMs, bill paying, call centres and card
payments)?
4. How can you manage the transition to new, largely
electronicdeliverychannelswhileminimisingthe sub-
stantial transitional increases in costs?
Conclusion And Findings
Respondent who are holding accounts both
in the Government Banks as well as the Private sector
banks agreeto the factthat theyare beingoffered more
variety of services by the Private sector banks. Al-
though these services for 54% of the respondents
come for a cost even after that they are happy with the
services provided to them. 54% of the Private sector
bank account holders have rated the transaction with
theirbanksasexcellentand77%ofthemhaveratedthe
timetakenforremittingcashasveryfast.Hencewecan
say that Private sector banks in India are providing
quality services to their customers.
1 Banking Industry Data Base - Asian CERC Information Technology Ltd., 2004
2 G.Opah (eds) Emerging Perspectives on Services Marketing, pp 25-28
3 PSU Banks find NRI remittance red hot, Times News Network, 13 September 2006
4 Banking : The Network is the bank', by Yogesh Sharma, Dataquest, January 31, 2005
5 Ting, D.H. (2004) 'Service Quality And Satisfaction Perceptions: Curvilinear And Interaction Effect' International Journal
of Bank Marketing, Vol. 22 No. 6, pp. 407-420
6 'The future is in e-banking' by Mr. K.V. Kamath (Managing Director, ICICI), April 14, 2005, Business Line.
7 http://www.indiainfoline.com 8 http://www.thebharat.com 9 http://www.icicibank.com 10 http://www.hdfcbank.com
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