Union govt. to finance public sector banks!

I am not an expert on such matters but fail to understand why they should finance if the more accounts have been opened in Indian Banks? After all they are not giving loans to these accounts holders but the account holders are depositing money (however small amount). I feel the situation is due to the NPA and big loans approved to various industries.

Nationalised banks are used by politicians esp of the ruling party as Air india is used. First encourage distribution of loans esp to friendly business persons, then declare them as bad loans (nort recoverable) and periodically inject more funds to keep the banks from collapsing and also continue loan disbursements. NPA's are suffered by private banks also, only they do not have cushion of budgetary support.

The present government is a nausikhiya in these games and when they wake up the situation will be horrible. Move to private or foreign banks foe safety of your funds.

I never had an account or Bank dealings with the Nationalized Banks. I don't want to lose my sleep and money by investing in the Nationalized Banks.

suni51 wrote:

I am not an expert on such matters but fail to understand why they should finance if the more accounts have been opened in Indian Banks? After all they are not giving loans to these accounts holders but the account holders are depositing money (however small amount). I feel the situation is due to the NPA and big loans approved to various industries.

 

There is disproportionate administrative expenses on such small accounts including many nil.  The NPA and big loans irrecoverable are also a cause. However it is bad that the public sector banks have to be financed from union budget. 

It is not bad that PSU banks have to be financed thru budgets because government is the owner and has toarrange for funds as Private bank owners have to do. If banks perform then these investments fetch returns.

rambabu wrote:

I never had an account or Bank dealings with the Nationalized Banks. I don't want to lose my sleep and money by investing in the Nationalized Banks.

 

Since you do not deal with them, you probably do not know that SBI is the biggest of all and it is also in my opinion one of the most efficiently run banks, since they cater to every kind of service . I feel that all the nationalized banks are doing a wonderful job - they don't insist on a minimum deposit of Rs 5,000 or Rs 10,000 in some cases like private banks do and  the interest rates on loans are always less than other banks, so I don't see why one should look down on nationalised banks !

 

usha manohar wrote:

rambabu wrote:

I never had an account or Bank dealings with the Nationalized Banks. I don't want to lose my sleep and money by investing in the Nationalized Banks.

 

Since you do not deal with them, you probably do not know that SBI is the biggest of all and it is also in my opinion one of the most efficiently run banks, since they cater to every kind of service . I feel that all the nationalized banks are doing a wonderful job - they don't insist on a minimum deposit of Rs 5,000 or Rs 10,000 in some cases like private banks do and  the interest rates on loans are always less than other banks, so I don't see why one should look down on nationalised banks !

 

After seeing the so called Efficient nationalized Banks like the SBI, I switched over to a private Bank.. No regrets whatsoever.

 

 

vijay wrote:

It is not bad that PSU banks have to be financed thru budgets because government is the owner and has toarrange for funds as Private bank owners have to do. If banks perform then these investments fetch returns.

 

It is okay to provide initial caplital as well extra capital for expansion. But it is painful to see that the banbks are made to incur loss from imprudent policies of governments- the loan melas of previous governments and Jan Dhana of current  government- and the recoupment of the loss from budget of union government. 

I hope with Financing the Banks, Banks will utilize this opportunity and help in boosting the returns. Anyhow it takes time to see if the financing will bear fruits or not.

PSU banks will continue to suffer from political interference because the budgetory support they provide does not come from their pockets.

Very true. In these days of Political intervention PSU Banks will continue to suffer severe losses. For example in AP, Due to the false assurances offered to the farmers to waive off the loans of the farmers, there is a rampant political intervention of the politicians on the PSU Banks.