About Private Sector Banks - 15 Minutes Seminar Notes

 About Private Sector Banks - 15 Minutes Seminar Notes

Private Sector Banks are those banks in which the majority of the stake is held by shareholders of the bank and not by the government. RBL bank, HDFC Bank, ICICI Bank, Yes Bank, etc. are the private sector banks in India. They provide all the banking products and services to the customers. These products include Fixed Deposit, Savings Deposit, RD, Home Loan, Personal Loan, Car Loan, Locker, Demat Facilities, Debit/ Credit Card, ATM, Foreign Exchange Transactions, Insurance, Wealth Management, Net Banking, etc. Private banks are known for introducing information technology in the banking system.

Private banks are managed and controlled by private promoters. There are 2 different categories in which these private banks have been divided:

1.Pre-liberalisation

2.Post-liberalisation

Pre-liberalisation:-

There are total 12 banks which exist from the period before liberalisation in India that took place in 1990. These banks include Federal Bank, Karnataka Bank, Karur Vysya Bank, RBL Bank, etc.

Post-liberalisation:-

There are total 9 banks which got licenses and came into being after liberalisation in India that took place in 1990. These banks are called new age banks and include HDFC Bank, ICICI Bank, Axis Bank, Yes Bank, etc.

Their main functions & activities include:

• They provide services of opening deposit accounts with high-interest rates on savings accounts and other benefits.
  
• These banks suggest and decide on different investment strategies for clients to meet their end results. In other words, they also offer investment planning services.
  
• They give suggestions and recommendations of finance options for real estate.
  
• They provide loans and credit at cheap rates.
  
• Various banks in India assist the clients regarding tax compliance and the future trends in taxation.
  
• Similar to tax trends, banks aid customers with future uncertainties and risks including market conditions, interest rate changes, liquidity risks, etc.
  
• They offer cash flow management of different clients by managing bills and receipts.
  

Advantages of Private Sector Bank:-

• Private Sector Banks offer quick service to the customers.
  
• These banks also offer customized services according to the customer’s financial needs.
  
• Private Sector Banks has a streamlined management system.
  
• Quick financial decision making is possible in private sector banks.
  

Disadvantages of Private Sector Bank:

•  Private Sector Banks charge extra on every financial service
•  These banks only operate in cities and out of reach for the rural population
•  Private Sector Banks offer no job security to the employees
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Presented by,

Kousalya

Banking  Student

Magme School Of Banking