Compare of Public and Private Sector Bank

4588 Words Feb 14th, 2011 19 Pages
A PROJECT ON COMPARISION OF PUBLIC BANKS AND PRIVATE BANKS WITH CAMEL METHODOLOGY

SUMBITTED TO:-
Prof. AMIT BHATTACHARYA

SUBMITTED BY:-
NIKITA DESAI.
FARNAZ KAZI.
MITTAL LAD.
BHAVISHA MISTRY.
VARSHA NANDA.
RITA PATIL

Abstract

What are the trends observed in the performance of Public Sector and Private Sector Banks? How do they perform when compared across the critical component of Capital Adequacy, Asset Quality, Management Efficiency, Earning Quality, Liquidity and Sensitivity to Market? A modest effort to compare public and private sector banks on the basis of six such crucial components

OBJECTIVES OF STUDY

➢ To do an in-depth analysis of the model.

➢ To analyze 6 banks to get the desired results by using CAMELS as a tool of
…show more content…
The two important challenges for public sector banks are: • To maintain profitability in spite of government norms and regulations, as to maintain their PLR. • Put in place appropriate technology of excellent standards that will make them be seen more as virtual banks rather than brick and mortar.

Private Sector Banks
There are two types of private sector banks, the old and the new. As far as the old (mostly regional banks) are concerned, inadequacy of capital will lead to their mergers sooner rather than later.
Private sector banks have good technology for handling transactions and also offer attractive products, but it cannot be said that corporate governance and risk management are far superior to that of the Public Sector Banks. Some of the most important challenges for private sector banks are: • Consolidation and Convergence: RBI may be inclined to approve the merger. The regulator, which has been insisting on promoters of smaller banks to lower their holdings, would possibly prefer such mergers. Centurion Bank of Punjab needs the additional business to compensate for its relatively higher cost structures. It can cross-sell its banking products through the LKB network, including traditional banking products and fee-based services like wealth management products, to affluent NRI customers.

• Priority sector credit: Generally, private sector banks lend money to individuals and corporate sector whereas