Public Sector Banks - 15 Mints Seminar Notes
INTRODUCTION TO PUBLIC BANKS
Public Sector Banks (PSBs) are a major type of government owned banks in India, where a majority stake (i.e. more than 50%) is held by the Ministry of Finance of the Government of India or State Ministry of Finance of various State Governments of India.
EMERGENCY OF PUBLIC SECTOR BANKS
- The Central Government entered the banking business with the nationalization of the Imperial Bank of India in 1955.
- A 60% stake was taken by the Reserve Bank of India and imperial Bank of India was named State Bank of India.
- The seven other state banks became subsidiaries of the new bank in 1959 when the State Bank of India (Subsidiary Banks) Act, 1959 was passed by the Union government.
- The next major government intervention in banking took place on 19 July 1969 when the Indira government nationalised an additional 14 major banks.
- The total deposits in the banks nationalised in 1969 amounted to 50 crores. This move increased the presence of nationalised banks in India, with 84% of the total branches coming under government control.
BEFORE THE ECONOMIC LIBERATION
- The share of the banking sector held by the public banks continued to grow through the 1980s.
- By 1991 public sector banks accounted for 90% of the banking sector.
- A year later, in March, 1992, the combined total of branches held by public sector banks was 60,646 across India, and deposits accounted for ₹1,10,000 crore.
- The majority of these banks was profitable, with only one out of the 21 public sector banks reporting a loss.
AFTER LIBERATION IN THE 2000s
The nationalised banks reported a combined loss of ₹1160 crores.
However, the early 2000s saw a reversal of this trend, such that in 2002-03 a profit of ₹7780 crores by the public sector banks: a trend that continued throughout the decade, with a ₹16856 crore profit in 2008–2009.
Then the public sector banks further classified into 3 types:
1.State Bank of India.
2.Nationalised Banks.
3. Regional Rural Banks.
The largest Public sector banks is SBI.
The oldest bank in India is Allahabad bank established in 1865.
MERGERING OF BANKS
- The consolidation of SBI-associated banks started first by State Bank of India merging its subsidiary State Bank of Saurashtra with itself on 13 August 2008.
- Thereafter it merged State Bank of Indore with itself on August 27, 2010.
The remaining subsidiaries, namely
PUBLIC SECTORS PAYMENTS BANK
- the State Bank of Bikaner & Jaipur,
- State Bank of Hyderabad,
- State Bank of Mysore,
- State Bank of Patiala and
- State Bank of Travancore,and
- Bharatiya Mahila Bank were merged with State Bank of India with effect from 1 April 2017.
- Vijaya Bank and Dena Bank were merged into Bank of Baroda in 2018.
- IDBI Bank was categorised as a private bank with effect from January 2019.
- On 30 August 2019, Finance Minister Nirmala Sitharaman announced the government's plan for further consolidation of public sector banks:
- Indian Bank's merger with Allahabad Bank (anchor bank - Indian Bank);
- Punjab National Bank's merger with Oriental Bank of Commerce and United Bank (anchor bank - Punjab National Bank);
- Union Bank of India's merger with Andhra Bank and Corporation Bank (anchor bank - Union Bank of India); and
- Canara Bank's merger with Syndicate Bank (anchor bank - Canara Bank).
- The mergers took effect from 1 April 2020.
PUBLIC SECTORS PAYMENTS BANK
Indian Post payments bank;
- On 19 August 2015, the India Post received licence to run a payments bank from the Reserve Bank of India.
- On 17 August 2016, it was registered as a public limited government company for setting up a payments bank.
- IPPB is operating with the Department of Posts under Ministry of Communications.
BANKS IN INDIA
There are total of 56 banks in India.
12- nationalised banks.
1- public sector payments bank.
43- Regional Rural Banks.
Nationalized Banks (Government Shareholding %, as of 30 June 2021):
- State Bank of India (55%)
- Bank of Baroda (64%)
- Canara Bank (69.33%)
- Punjab National Bank (73.1%)
- Indian Bank (78.86%)
- Union Bank of India (83.5%)
- Bank of India (90.34%)
- Central Bank of India (93.08%)
- Bank of Maharashtra (93.33%)
- UCO Bank (95.39%)
- Indian Overseas Bank (96.4%)
- Punjab and Sind Bank (98.07%).
Public Sector Payments Bank.
India Post Payments Bank.
43 Regional Rural Banks in India Since 1 April 2020
Andhra Pradesh
- Andhra Pragathi Grameena Bank
- Chaitanya Godavari Gramin Bank
- Saptagiri Gramin Bank
- Arunachal Pradesh Rural Bank
- Assam Gramin Vikash Bank
- Dakshin Bihar Gramin Bank
- Uttar Bihar Gramin Bank
- Chhattisgarh Rajya Gramin Bank
- Baroda Gujarat Gramin Bank
- Saurashtra Gramin Bank
- Sarva Haryana Gramin Bank
- Himachal Pradesh Gramin Bank
- J&K Grameen Bank
- Ellaquai Dehati Bank
- Jharkhand Rajya Gramin Bank
- Karnataka Gramin Bank
- Karnataka Vikas Grameena Bank
- Kerala Gramin Bank
- Madhyanchal Gramin Bank
- Madhya Pradesh Gramin Bank
- Maharashtra Gramin Bank
- Vidharbha Konkan Gramin Bank
- Manipur Rural Bank
- Meghalaya Rural Bank
- Mizoram Rural Bank
- Nagaland Rural Bank
- Odisha Gramya Bank
- Utkal Grameen Bank
- Puduvai Bharathiar Grama Bank
- Punjab Gramin Bank
- Baroda Rajasthan Kshetriya Gramin Bank
- Rajasthan Marudhara Gramin Bank
- Tamil Nadu Grama Bank
- Telangana Grameena Bank
- Andhra Pradesh Grameena Vikas Bank
- Tripura Gramin Bank
- Aryavart Bank
- Prathama UP Gramin Bank
- Baroda UP Bank
- Uttarakhand Gramin Bank
- Paschim Banga Gramin Bank
- Bangiya Gramin Vikash Bank
- Uttarbanga Kshetriya Gramin Bank
Presented by
Shaiju
Banking Student
Magme School of Banking
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