Public Sector Banks - 15 Minutes Seminar Notes

Public Sector Banks - 15 Minutes Seminar Notes

What are public sector banks?

• Public sector banks are the banks where a majority stake is held by a government.
  
• The shares of these banks are listed on stock exchanges.
  

Emergence of public sector banks:

• The central government entered the banking business with the nationalization of the imperial Bank Of Indian in 1955.
  
• A 60% stake was taken by the RBI and the new bank was named as the State Bank of India.
• The seven other state banks became the subsidiaries of the new bank when nationalized on 19th July 1960.
  
• The next major nationalization of banks took place in 1969 when nationalized an additional 14 major banks.
• The next round of nationalization took place in April 1980. The government nationalized 6 banks
  

Some nationalization banks are:

Union Bank of India

• Uco Bank
• SBI Bank
• Indian Overseas Bank
• Indian Bank
  
• Central Bank of India 
• Canara Bank of India
• Bank of Maharashtra
  
• Bank of India
• Bank of Baroda
  

Which is the largest public sector bank in India?

 SBI bank

Why should one choose public sector banks?

• They are safe and people who are keeping money in fixed deposit and saving account do not have to worry.
• Less hidden charges and also lower limit of amount to be held as minimum deposit as far as in saving account . So for example in case of private banks minimum balance to be maintained is anywhere between 5000 to 20000 rupees whereas in case of public sector banks it is 1000 and in case of student account and no frill account it is 0.
  

Who gives the best deal in loans?

Processing charges: Processing chargers are cheaper in the case of government bank. State Bank of India is charging a home loan processing fee of 0.25 per cent on loan up to Rs 25 lakhs. Home loan processing fee at private sector banks can be high as 1 percent.

Interest rate fluctuation: They keep same policies for all loan customers and decreased rate is effective for existing customers also almost immediately.

Prepayment period: They do not have any such clause.

You can start prepaying from day 2 of loan itself.

Prepayment charges: Public sector banks do not charge you a penny to prepay.

Prepayment amount: Again, no such clause here. You can prepay any amount which you like.

 

 

 

Presented By,

Pooja 

Banking Student 

Magme School Of Banking