This document provides an overview of public sector banks in India. It discusses the history of banking in India beginning with banks established by the British East India Company in the early 19th century. It notes that many major banks were nationalized by the government in 1969 and 1980. The document defines public sector banks as those where the government holds over 50% stake and are listed on stock exchanges. It then outlines various banking services provided by public sector banks like deposits, credits, general services, customized services and products.

1. Public Sectors Bank
&
It’s Services

2. History
• Modern banking in India is said to be developed during
the British era. In the first half of the 19th century, the
British East India Company established three banks – the
Bank of Bengal in 1809, the Bank of Bombay in 1840 and
the Bank of Madras in 1843. But in the course of time
these three banks were amalgamated to a new bank
called Imperial Bank and later it was taken over by the
State Bank of India in 1955.
Allahabad Bank was the first fully Indian owned bank.
The Reserve Bank of India was established in 1935
followed by other banks like Punjab National Bank, Bank
of India, Canara Bank and Indian Bank.
In 1969, 14 major banks were nationalized and in 1980,
6 major private sector banks were taken over by the
government.

3. What is public sectors Bank?
• Public Sector Banks (PSBs) are banks where a
majority stake (i.e. more than 50%) is held by a
government. The shares of these banks are listed
on stock exchanges. There are a total of 27 PSBs in
India [19 Nationalized banks + 6 State bank group
(SBI + 5 associates) + 1 IDBI bank (Other Public
Sector-Indian Bank) = 26 PSBs + 1 recent Bhartiya
Mahila Bank].

4. (A). Deposits
Banks are also called custodians of public money. Basically, the
money is accepted as deposit for safe keeping. But since the
Banks use this money to earn interest from people who need
money, Banks share a part of this interest with the depositors.
1. Fixed Deposit Accounts
2. Demand Deposits:
Savings Account
Current account

5. Fixed Deposits
Period SBI PNB BOI BOB Union bank
G.P. S.C. G.P. S.C. G.P. S.C. G.P. S.C G.P. S.C.
1 year 8.75 9.00 9.00 9.50 9.05 9.55 8.75 9.25 9.05 9.55
2 year 8.75 9.00 9.00 9.50 9.05 9.55 8.75 9.25 9.05 9.55
3 year 8.75 9.00 9.00 9.50 9.05 9.55 8.75 9.25 9.00 9.50
5 year 8.50 8.75 9.00 9.50 8.75 9.25 8.50 9.00 9.00 9.50

6. Demand deposits
• Savings Account:-
SBI PNB BOB BOI Union Bank
4% 4% 4% 4% 4%
• Current accounts:-

7. (B).Credits
Bill purchase and discount:-
• A source of receivables/working capital financing is bill
discounting arrangement offered by the banks and finance
companies.
- Provide short-term finance.
- Get the account receivables discounted which the client
would have otherwise received from the buyer at the end
of credit period.

8. Cash credit Account:-
• This account is the primary method in which Banks lend
money against the security of commodities and debt.
• It runs like a current account except that the money that can
be withdrawn from this account is not restricted to the
amount deposited in the account.
• Instead, the account holder is permitted to withdraw a certain
sum called "limit" or "credit facility" in excess of the amount
deposited in the account.

9. Overdraft:-
• The word overdraft means the act of overdrawing from a
Bank account.
• In other words, the account holder withdraws more money
from a Bank Account than has been deposited in it.

10. Term Loan:-
• Term Loans are the counter parts of Fixed Deposits in the Bank.
• Banks lend money in this mode when the repayment is sought
to be made in fixed, pre-determined instalments. This type of
loan is normally given to the borrowers for acquiring long term
assets i.e. assets which will benefit the borrower over a long
period (exceeding at least one year).
• Purchases of plant and machinery, constructing building for
factory, setting up new projects fall in this category. Financing
for purchase of automobiles, consumer durables, real estate and
creation of infrastructure also falls in this category.

11. Home loan:-
Particular Up to 30 lacs Up to 75 lacs Above 75 lacs
SBI 10.50% 10.15% 10.40%
BOB 10.25% 10.25% 10.25%
PNB 10.25% 10.25% 10.50%
BOI 10.20% 10.20% 10.45%
Union Bank 11.25% 11.50% 11.50%

12. Particular SBI BOB PNB BOI Union bank
For loan
upto 4 lacs
13.50% 12.75
%
13.25% 13.20% (Boys) (Girls)
upto Rs.7.50 lacs 13.75% 12.75
%
14.25% 13.20% 12.50% 12.00%
Above Rs.7.50
lacs
11.75% 12.00
%
12.25% 12.70% 12.25% 11.75%
Education loan:-

13. Two wheel loan:-
Particular Fixed Up to 3 years Above 3 years Up to 5 years
SBI - 18.25% - -
BOB 14.25% - - -
PNB
- 13.25%
(Salaried)
13.25% + TP
(Salaried)
-
- 14.00% (Busi.
Concern)
14.00% + TP
(Busi.
Concern)
-
BOI - - - 14.20%
Union Bank 15.00% - - -

14. Four Wheel Loan (New):-
Particular Women Men Fixed
SBI 10.40% 10.45%
BOB - - 10.50%
PNB - - 10.65%
BOI - - 10.65%
Union Bank - - 10.70%

15. (C). General services
1. Transferring Money From One Place To Another
• Apart from accepting deposits and lending money, Banks
also carry out, on behalf of their customers the act of
transfer of money - both domestic and foreign - from one
place to another.
• This activity is known as "remittance business”.

16. 2. Trustee Business:-
• Banks also act as trustees for various purposes.
• For example, whenever a company wishes to issue
secured debentures, it has to appoint a financial
intermediary as trustee who takes charge of the security
for the debenture and looks after the interests of the
debenture holders. Such entities necessarily have to
expertise in financial matters and also sufficient standing
in the market/society to generate confidence in the
minds of potential subscribers

17. Keeping valuables in safe custody:-
• Bankers are in the business of providing security to the
money and valuables of the general public.
• While security of money is taken care of through offering
various types of deposit schemes, security of valuables is
provided through making secured space available to general
public for keeping these valuables. These spaces are
available in the shape of LOCKERS.

18. Government business:-
• Earlier Government business used to be exclusively
carried out by Government Treasuries where all type
of transactions took place.
• However, now Banks act on behalf of the
Government to accept its tax and non-tax receipts.
Most of the Government disbursements like pension
payments and tax refunds also take place through
banks.
• While the Banks carry out this business for a fee to be
paid by the Government, providing this service
requires a lot of effort and organisation.

19. Credit card:-
• A card issued by a financial company giving the
holder an option to borrow funds, usually at point of
sale.
• Credit cards charge interest and are primarily used
for short-term financing.
• Interest usually begins one month after a purchase is
made and borrowing limits are pre-set according to
the individual's credit rating

20. (D).Customized services and product:-
• Derivative And Treasury Product:-
Treasury Operations Include Investments In Debt
Market (Sovereign And Corporate), Equity Market,
Mutual Funds, Derivatives, And Trading And Forex
Operations.

21. Para banking products:-
1) Hire purchase activities:-
• Hire purchase is a type of installment credit under
which the hire purchaser, called the hirer, agrees to
take the goods on hire at a stated rental, which is
inclusive of the repayment of principal as well as
interest, with an option to purchase.
• Under this transaction, the hire purchaser acquires
the property (goods) immediately on signing the
hire purchase agreement but the ownership or title
of the same is transferred only when the last
installment is paid.

22. 2) Leasing Business:-
• Lease is a contract between the owner of the asset (Lessor) and
the user of the asset called the lessee, whereby the Lessor gives
the right to use the asset to the lessee over an agreed period of
time for a consideration called the lease rental.

23. 3) Merchant Banking:-
• A merchant bank is a financial institution that engages
in underwriting and business loans, catering primarily
to the needs of large enterprises and high net
worth individuals. In the British market, the term
merchant bank refers to an investment bank.

24. 4)Factoring Activities :-
• “Factoring means an arrangement between a financial
intermediary (factor) and a business concern (client) which
includes at least two of the following services to be provided by
the factor:
• Finance
• Maintenance of accounts
• Collection of debts
• Protection against credit risk”

25. Top Public Sector Bank
• SBI
• BOB
• PNB
• BOI
• CANARA BANK
• UNIOU BANK
• CENTRAL BANK
• IOB
• SYNDICATE BANK
• UCO BANK

27. Need of Public sectors bank
• To protect the safety of the public’s savings.
• To control the supply of money and credit in order
to achieve a nation’s broad economic goal.
• To ensure equal opportunity and fairness in the
public’s access to credit and other vital financial
services.
• To promote public confidence in the financial
system, so that savings are made speedily and
efficiently.

28. • To avoid concentrations of financial power in the
hands of a few individuals and institutions.
• Provide the Government with credit, tax revenues
and other services.
• To help sectors of the economy that they have
special credit needs for
eg. Housing, small business and agricultural loans et