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Are PSU banks doing well under UPA Govt?

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Active member
Are they doing well really? I remember some years back, PSU banks == Non performing assets. Is it because of the growing economy? Is there any push from the Govt? Some stocks have been tripled in the last two years (probably on positive results).



Active member
dear fire,
all PSU banks are doing really well. it is because of the better control exercised by the MOF and RBI . also the mgt is better now. other factor is the cascading effect of privatisation and economic boom(?!)


Well-known member
The State Bank of India has declared a dividend of 140% The other banks in the group have declared dividend of 100% to 140%.


Well-known member
Are PSU banks doing well under UPA govt?

A major percentage of their income portfolio comes from miscellaneous
portfolio like DD charges, commission on TT, signature verification, postal
charges etc. This has been the trend for the past decade. In terms of
service, the private banks offer better services.


Well-known member
Performance Of Psu Banks

It's true, the performance of PSU banks is not the same as it was once.

If we analyse further, these points will emerge.

1. With the growth in size of Indian economy, the volumes of business
handled by PSU banks have also grown.
2. They still command major share of banking business in our country,
because of the unshakeable confidence reposed by the common masses in
the Indian Public Sector as a whole.
3. They have lost some space to the new generation private sector banks,
which came up after 1993. Only HNIs and some large industrial
houses who want premium services at added cost - read as 'regardless
of the cost' - have shifted to these Indian private sector banks.
4. One surprising finding is foreign banks could not snatch away a sizeable
share of Indian PSU Banks, inspite of their terrific technological edge over
the latter.
5. As regards the HR, recruitment of personnel in the PSU banks which were
offering employment to thousands of youngsters- creme de la creme -
during 1980 to 1995, has slowed down or even came to a halt. BSRBs got
disbanded in the beginning of the current decade. As a result, the average
age of an employee of a PSU bank is above 40 years today. This has seriously
affected the overall performance of the banks and efficacy of their service
delivery mechanisms.
6. One positive development is the arrogance displayed by the previous
generation bankers (1970-2000) has vanished greatly and the present
competitive environment has compelled them to change their attitudes
and behaviour, for the better.
7. One saddening aspect is the present day youth - particularly those who
are professionally qualified - use these PSU Banks only as their career
launching pad, due to the wide opportunities provided by the more
attractive and remunerative, but less risky sectors like IT, Infrastructure
etc. Poaching by other private players (banks/insurance companies/
mutual funds) is weaning away the talented and experienced pool. As
a consequence, the attrition rate is very high in PSU banks which is
a cause for concern of the HR Managers there.
8. The present government is directionless with regard to fiscal consolidation
(mergers/amalgamations/take-overs) and pulled down by the left parties,
each time when some policy initiative is announced. But, some surprises
may be in store, just before the next general elections for Lok Sabha!
9. The strength and resilience of PSU banks in India shall never be
underestimated, as they have withered many storms and crossed several
milestones in the last 15 years - To name a few, Harshad Mehta scam
in 1992, Narasimham committee recommendations and the introduction of
prudential norms in 1993, the first ever VRS scheme in Indian banking
industry that saw over a lakh of personnel leave en bloc (2000-2001),
Ketan Parekh scandal followed by the failure of Global Trust Bank in
2001-2002, escaping from the South East Asian Currency crisis in late
1990s and very recently, the Sub-Prime crisis that played havoc with
American economy and other inter-connected global markets.
10.Finally, in the capital market too, the Indian PSU banks have fared
well. They have distributed huge profits as dividends to the government
(the majority shareholder) and other investors. Their share price also has
appreciated reasonably well.


Even though financial reforms were scripted and ushered in by the
present PM and the then Finance Minister in Narasimha Rao government
i.e. Dr. Manmohan Singh, whether the present UPA government alone can
claim credit (or take blame) for all the above-mentioned points?

I just leave it to your judgement.

--- pannvalan
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