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All You Need To Know About The Public Sector Banks In India Research Team | Posted On Tuesday, March 19,2019, 10:08 AM

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All You Need To Know About The Public Sector Banks In India



Public Sector Banks Heads

What are Public Sector Banks?

A public sector bank PSB, is a commercial bank, in which the Government of India holds majority stake. The government of India is responsible for governing and administering public sector banks in India. Shares of a public sector bank are listed on stock exchanges.

Public Sector Banks in India

Banking in India started way back in the late 19th century. The British started Bank of Calcutta, Bank of Madras and Bank of Bombay in the pre independence era. These banks were later merged to form ‘The Imperial Bank of India’. The Government of India entered the banking sector by nationalizing the Imperial Bank of India in 1955. Around 60% of stake was taken by RBI and the new bank was named ‘State Bank of India’. State Bank of India, SBI, had seven subsidiary banks as per The State Bank of India Act, enacted in 1959:

  • State Bank of Bikaner and Jaipur (SBBJ)
  • State Bank of Hyderabad (SBH)
  • State Bank of Indore (SBN)
  • State Bank of Mysore (SBM)
  • State Bank of Patiala (SBP)
  • State Bank of Saurashtra (SBS)
  • State Bank of Travancore (SBT)

All subsidiaries of SBI were merged into SBI in June 2016. The State Bank of India is headquartered at Mumbai, the financial capital of India. SBI is the largest bank in India with 23% market share.

The next major Government of India’s intervention in the banking sector happened in July 1969 when the Government of India nationalized 14 major banks in India. The total deposits in the nationalized banks surged to Rs 50 Crores. This move enhanced the presence of nationalized banks in India, with 84% of the total branches coming under the control of Government of India.

The share of banking sector held by public sector banks continued to expand till 1980s and in 1991, the public sector banks accounted for 90% share of the banking sector. By March 1992, the overall number of branches of public sector banks was a staggering 60,646 spread across the length and breadth of India. Total deposits summed up to Rs 1,10,000 Crores. Only one bank reported loss while the rest were profitable in 1992.

The nationalized banks reported overall loss of Rs 1,160 Crores in 1990s. The trend changed in early 2000s as Rs 7,780 Crores profit was reported by the nationalized banks and this trend continued till 2009 as they reported overall profit of Rs 16,856 Crores.

SEE ALSO: What is a Public Sector Bank?

The List of Public Sector Banks in India

In 1969, monetary movement resulted in the nationalization of below mentioned banks:

1) Allahabad Bank

2) Bank of Baroda

3) Bank of India

4) Bank of Maharashtra

5) Central Bank of India

6) Canara Bank

7) Dena Bank

8) Indian Bank

9) Indian Overseas Bank

10) Punjab National Bank

11) Syndicate Bank

12) Union Bank

13) UCO Bank

14) United Bank of India

In 1980, The Government of India decided to nationalize all banks with reserves in excess of Rs 200 Crores. This resulted in the nationalization of the below mentioned banks:

1) Andhra Bank

2) Corporation Bank

3) New Bank of India

4) Oriental Bank of Commerce

5) Punjab and Sindh Bank

6) Vijaya Bank

As of today, there are 21 public sector banks in India.

As public sector banks are governed and administered by the Government of India, the staff is also appointed by the Government of India. The Government of India has a say when it comes to the appointment of chief executive officer, CEO, or promoter of a public sector bank.

Some Helpful Information About Public Sector Banks

The below table shows the information of the CEOs of the public sector banks:


What is Term Insurance?

List of Public Sector Bank Offering Term Insurance

Term insurance is the most basic form of life insurance. Under a term insurance policy, you pay premiums periodically for a predefined sum assured, which would be paid by the insurer to the beneficiary or nominee if the insured dies within the term of the policy.

Applicants of term insurance policy must undergo certain medical tests before signing up for the policy. Term insurance is offered by both private and government insurers. The advantage of availing term insurance from a public sector bank is that you may not have to undergo medical tests before approving your application for a term insurance policy.

SEE ALSO:  What is Term Insurance?

Below mentioned is the list of banks offering term insurance:

Public Sector Banks That Offer Health Insurance

What is Health Insurance?

Health insurance is an insurance policy which pays medical and surgical expenses incurred by the insured.  Insurer will either reimburse the insured for expenses incurred from illness / injury or pays the healthcare provider directly thereby enabling cashless treatment. The insured must pay periodic premiums to keep the policy active. The IRDA has authorized both private and government insurers to offer health insurance policies in India. Availing health insurance policy from a bank is a big plus for those individuals that have pre existing diseases as banks often don’t insist on medical tests prior to approving the application for health insurance.

Below table shows the list of public sector banks offering health insurance policy:

What is Personal Loan? List of Public Sector Banks That Offer Personal Loan

Personal loan is an unsecured loan availed from banks and non-banking financial companies, NBFCs. As personal loan is an unsecured loan, the rate of interest levied on these loans is high. There is no restriction on the purpose of utilization of funds received under personal loan. You can use these funds for various reasons like funding education for self, siblings and children, buying a car, constructing / buying / renovating / reconstructing a house, go on a vacation and so on. There is no need of furnishing a security or collateral to avail personal loans.

Personal loans are offered by lenders after thoroughly checking the repayment capabilities as these are unsecured loans. Credit score plays a key role when it comes to personal loans. Low credit score would mean that lender would straight away turn down your loan application. Personal loans are issued at a fixed processing fee. Processing fee is the administration fee levied by lenders on borrowers, to process their loan application.

Personal loans are offered at a fixed interest rate. The rate of interest levied on personal loans varies across lenders. The rate of interest also varies on the basis of repayment ability and risk factor involved in lending to a particular individual.

The below table shows the rate of interest and processing fee charged by public sector banks on personal loans India:

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