PSU Banks Case Study

Introduction: Banking sector The Indian Banking industry governed by the Banking Regulation Act of India, 1949, falling into two broad classifications, non-scheduled banks and scheduled banks. Within the commercial banks there are nationalized banks, the State Bank of India and its group banks, regional rural banks and private sector banks (the old/ new domestic and foreign). With the economic growth picking up pace and the investment cycle on the way to recovery, the banking sector has witnessed a transformation in its vital role of intermediating between the demand and supply of funds. The revived credit off take (both from the food and non food segments) and structural reforms have paved the way for a change in the

Table 4 summarises descriptive statistics of RATE, the un-weighted (weighted) risk disclosure index (RDI) as well as SSB for all bank fiscal years, as well as for each of the eight firm years investigated, separately from 2006 to 2013. Table 4 shows a number of remarkable outcomes. First, it reports that there is a high amount of variation in ratings between banks. For instance, RATE ranges from a minimum of 1 (Default) to a maximum of 19 (AA- which mean very high credit quality) with the median RATE 14.12 (Good credit quality) that indicate most banks in MENA have good rating, but there has been a continuous decreases in ratings during 2008 and years after which reflects the impact of continues crises beginning with GFC in 2007 and credit crunch in 2010. For instance, the average banks ratings is 14.4, 14.29, 14.09, 13.77, 13.69 and 13.84 in 2008, 2009, 2010, 2011 and 2012, but RATE begin to increases in 2013 which indicates recovery in MENA banks from GFC crisis effects. Finally, there is evidence that the level of listed bank RATE before GFC is higher than during and after GFC.

All the recommendations and suggestions that will be provided by this study would be helpful for the management of the National bank and Allied bank of Pakistan, in taking decisions related to their business processes, assets management, loans and other areas. This study would be beneficial for the investors, shareholders, creditors, state bank and government, because it shows the performance of the bank. In this way Shareholders would be able to know the performance of bank, profits and also know about those factors which are not significant for success of bank. New investors will attract if study proves that bank is working excellent. Overall this study will provide comprehensive information about financial performance of National bank and Allied bank of Pakistan; through the help of this research other banks can also know about those factors which largely contribute in the enhanced financial performance of a

With the rapid improvements in electronic technology and faster communication technology, the society has become more sophisticated than in the olden days. The workforce is better educated, better informed, better organized and better paid than existed in the olden days. Consequently, the long term-trend is for the customers who will be more aware of the value of the funds, time and convenience. This has led to a demand for more efficient banking system with efficient payment methods. The situation has resulted in more competition among the banks and stimulated more technological developments. Hence, there is a continuous increase in the use of electronic technology to meet the ever increasing competition in banking which is transforming brick and mortar banking (banking at a fixed branch premises) to electronic banking. The delivery of bank’s services to a customer at his office or home by using electronic technology can be termed as electronic banking. The quality, range and price of these electronic services decide a bank’s competitive position in the industry (Kumar, 2000).

In this paper I have discussed about different types of bank rates prevails in Indian banking system, their history and impact on economy if changed.

Being a developing country going through significant transformation in its political and economic life, banking is one of the major industries that is shaping the business landscape, however, the industry is dominated by public sector and retail customers who are the major depositors in the bank (source of funds) while institutional funds is a very small part of deposit. The nature of the industry made it a very competitive one; so, banks have to compete rigorously with each other for deposits from public sector and other retail sources.

The research data was collected over six months to June 2009. The researcher chose the survey as the appropriate research design for the study, and as such, questionnaires and interviews were used as research instruments. Some unclear or hanging issues in the questionnaires were clarified in interviews. A sample of 10 commercial banks randomly chosen was used in this analysis. Twenty questionnaires were used to gather data with two for each commercial bank chosen. A total of 10 interviews were held with the heads of credit or senior managers from those banks. The questionnaire had 12 short questions designed for the bankers and or senior managers from those banks so that they would not have a difficulty in answering questions. The first two questions constituted the respondent profile. The two questions that followed formed the administrative section where the research was obtaining information about the financial institution. Question five up to the end of the questionnaire formed the main body from which the crucial data for the research was

Secondary data is used for the study. The required data for the study is collected and compiled from “PROWESS” database of Centre for Monitoring Indian Economy (CMIE) for the period from 2013 to 2017 which is a reliable and empowered corporate database. In addition to this, supportive data is collected from Reserve Bank of India Bulletins, annual report of the respective bank website, Indian Banking Association, various banking journals and news papers. The study covers a period of five financial years from 2013 to 2017the financial year of the banking consists of twelve months from 1st April of a calendar year to 31st March of subsequent year.

India’s banking sector has grown very fast over these years. India has a large web of banking it has 26 public sector banks, private sector consists of 20, and there are 43 foreign banks which is a good sign for banking sector. Also it consists of 61 regional banks. There has been a noticeable expansion in dealings through ATMs, and also with internet and mobile banking banks has shown tremendous growth.

The Reserve Bank of India (RBI) is India’s central bank. Though public sector bank’s currently dominate the banking industry, numerous private and foreign banks exist. India 's government-owned banks dominate the market. Their performance has been mixed, with a few being consistent profitable. Several public sector banks are being restructured, and in some the government either already has or will reduce its ownership.

The issue of Non- Performing Assets (NPA), the root cause of the recent global financial crisis has been drawing the attention of the policy makers and academician’s. The Indian banking system has undergone significant transformation following financial sector reforms. It is adopting international best practices with a vision to strengthen the banking sector. The Indian banking sector has been facing serious problems of raising Non - Performing Assets (NPAs). The NPAs growth has a direct impact on profitability of banks. Several prudential and provisioning norms have been introduced, and these are pressurizing banks to improve efficiency and trim down NPAs to improve the financial health of the banks. In the background of these developments, this study strives to examine the state of affair of the

Performance of banking sector is affected by legislature and framing policies by the government. Banking activities are significantly affected by budget proposal. The dynamics of Indian Banking sector are drastically changed with securitization act. The Securitization Act has given more power to the banking sector against defaulting borrowers. Further, changes to be implemented on the issue of voting rights among private sector banks are likely to speed up the consolidation process.

Currently, the overall banking in India is considered as fairly mature in terms of supply, product range and reach even though reach in rural India still remains a challenge for the private sector banks. Well computerized private sector banks are beginning to compete seriously with the nationalized banks. They aim at a profitable and wealthy part of the market and, in contrast to the nationalized banks, do not recognize any social responsibilities to small account holders or to a rural and semi-urban clientele. Almost 80% of the business are still controlled by Public Sector Banks (PSBs). PSBs are still dominating the commercial banking system.

The Banking sector in India has always been one of the most preferred avenues of employment. In the current decade, this has emerged as a resurgent sector in the Indian economy. As per the McKinsey report ‘India Banking 2010’, the banking sector index has grown at a compounded annual rate of over 51 per cent since the year 2001, as compared to a 27 per cent growth in the market index during the same period. It is

Over the last few decades information technology has played an important role in Indian economy. It has affected all the industries especially the banking industry and has provided a way for the banks to differentiate their products and services. The traditional way of financial services delivered to customers called the branch based operations which had been used by the banks for more than 200 years, has been replaced by the advent of multiple technologies and application. For instance, Automated Teller Machine (ATM) displaced cashier tellers, telephone represented by call centers replaced the bank branch, the internet replaced mail, credit cards and electronic cash replaced bank transactions. The reason was the numerous key advantages that banks could gain by providing electronic banking services. In this way they had lower transactions cost, 24 hour trading, more extended business territory and also increased efficiency in daily banking process. The Banking Sector is also facing very stiff competition. In order to succeed such competition, they must offer a wide array of products with the latest technology. At present many banks and financial institutions are actively developing new electronic banking products for their customers throughout the world (Alagheband 2006) . The key players of banking industry are its customers and all the efforts made by the banks are to satisfy the desirable needs of