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Why NPA is more in public sector banks?

Why NPA is more in public sector banks?

The study highlights that the primary causes of higher NPAs in PSBs are their liberal credit policies and loose terms and conditions of loans, deficiencies in the credit sanctions, and disbursements of loans.

Why public sector bank is better than private sector bank?

One of the advantages of public sector banks over private sector banks is that the former usually charge lower on these additional fees compared to private counterparts. One reason could be that private banks incur high overheads in the form of more expensive offices, higher salaries to employees and other costs.

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Which bank has more assets in India?

As of March 2021, HDFC Bank was the leading Indian private bank with total assets over 15 trillion Indian rupees. Within the banking sector, HDFC bank comes second after the public State Bank of India which is worth nearly 40 trillion Indian rupees in terms of assets during the same time period.

What are the advantages of public sector bank?

Advantages of Public sector banks

  • High-interest rate on deposits.
  • Low-interest charge on loans.
  • Employees get full job security.
  • These employees also get a pension after retirement.
  • Offer service to a large customer base.
  • Offer their service to the rural part of the nation.
  • Offer financial service through multiple branches.

What is difference between public and private bank?

Public Sector Banks are the banks whose more than 50\% shareholding lies with the central or state government. Private Sector Banks are the banks whose majority of stake is held by private corporations or individuals.

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Which is largest public sector banks in India?


Rank Bank Name 2016-17
1 State Bank of India 18.45
2 Punjab National Bank 5.31
3 Bank of Baroda 5.03
4 Canara Bank 4.27

Are public banks better than private banks?

Public sector banks are known for their better organizational structure and greater penetration in the customer base. Job security is much higher as compared to private sector banks and for some, this could be the prime attraction for building a long-term career.

Are public sector banks facing more NPAs than private banks?

Here are some of the NPA statistics: Public Sector Banks, on the other hand, have reported NPA in the range 5-6\%. Clearly, PSBs are facing the brunt of NPAs more than their Private counter-parts. So what exactly is leading to high NPAs in the PSBs?

What is driving up non-performing assets of Indian banks?

In the current fiscal, gross non-performing assets (NPAs) of Indian banks are seen edging up by 20 basis points (bps) to 4.5 per cent of advances – or rise by Rs. 600 billion to four trillion. The banking sector has witnessed two years of slower economic growth that led to projects being stalled and corporate balance sheets getting stretched

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How many non-performing assets (NPAs) are there in India?

There are about Rs.10.0 lakh crore of advances and loans had been recognized as non-performing assets (NPAs) on total commercial credit of Rs.54.0 lakh crore as at the end of March 2018 [ 17] . It is estimated that there are about Rs.3.00 lakh crore of undeclared and undisclosed non-performing assets in the books of banks by March 2018.

Why are public banks under-performing in India?

The Reserve Bank of India has decided to make periodic inspection into sub-standard assets record of PSBs. One of the major reasons why Public Banks are under-performing in contrast to Private Banks, is the lack of expertise in the higher hierarchy of the bank.