Public Sector And Private Sector Essay

Public Sector and Private sector Banks : A Comparative Study in Indian Context

Introduction:-

As we know the Banks are that financial institution who plays a role of intermediaries between investor and the savers. For satisfaction of this purpose it is necessary to perform as well. Banks also helps to improve the economic efficiency and also raise living standard of the society. It is the sector which is an important source of finance for most business. It also play an important role to maintain stable prices, sound economic growth and employments. Banks satisfy the needs by providing funds to individuals, businesses and the governments. By doing this kind of activity it facilitates the flow of goods and services and the activities of government.

The banking system provides a large portion of the medium of exchange for a country. It is the primary instrument which helps to conduct monitory policy, through its deposit mobilization and lending operations. The banks are those commercial institutions which are designed to further the capital formation process through the attraction of deposits and extension of credit. The productive utilization of ideal funds, are made by commercial banks, which is helpful to produce wealth for society.

Measurements of Bank’s Performance:

Since, net Income gives us an idea that how well a bank is doing, but it has a major drawback. it doesn’t adjust for the size of bank. Bank profitability is a basic measure which is corrects for the size of the bank and is the return of assets (ROA). It is a good measure to identify bank’s performance, because the owners of the banks have a knowledge about whether their bank is being managed well.

ROA: The return of assets is a tool which provides information abou...

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...ated the financial management practices for the year 2006-07, of Federal Bank and Dhanlakshmi bank along wirh SBI. In his study, he found that all the above three banks maintained capital in excess of the stipulated norms of RBI. As compare to SBI and Dhanalakshmi Bank, federal bank performed well in cost Management and it had the lowest NPA Ratio and had maximum return on equity, while the Dhanalakshmi Bank had a very high liquidity.

Joshi VIjya (2007) found that indian banking sector was financially unsound on the eve of bamking reforms . he also observed that the indian banking sctor was Unprofitable and inefficient.

Samwel (2005) observed that the UCBs’s profitability performance can be improved by establishment of burden ratio. He also elaborated that by increasing the interest receipt may be increased the spread ratio if it is faster than interest payment.