Reasons for the failure of public sector banks in india
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Reasons behind the failure of India's public sector banks
March 12, 2015 12:13 IST


The increasing Non-Performing Assets are a wake-up call for public sector banks and the government.
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Image: PSU banks were once the lifeline of the Indian banking and financial systems. Photograph: Reuters
Public sector banks (PSBs) were the lifeline of the Indian banking and financial systems. From the nationalisation of the Imperial Bank of India and its conversion to State Bank of India in 1955, the banking system in India has largely been government controlled.
They offer penetrated banking services, reaching out to the length and breadth of the country, introducing banking concept for the masses and the ordinary.
But are the Indian PSBs bleeding today? The answer seems to be an unambiguous ‘yes’. Several pointers seem to allude to this. Many PSBs are in bad shape today and others are losing ground to the younger breed of private banks.
On the surface of it, the very tangible inefficiencies of PSBs look to be the prime reason for their losing ground. Yet, there are some deeper reasons that have been plaguing them, accounting for these inherent inefficiencies.
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