Bank Deposits: Private Banks Trump Public Sector Banks

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Private banks in Gujarat are getting the better of nationalised banks so far as bank deposits are concerned. The market share of public sector banks in the state has reduced from 54.61% between April and June 2015 to 52.38% between October and December 2017. Private banks, meanwhile, have seen their market share rise from 15.97% to 20.25% over the course of the aforementioned period.

Following demonetisation, public sector banks recorded a 9.18% growth in deposits, while the State Bank of India saw 12.93% growth. Private banks, on the other hand, saw deposits grow by 14.11%. Ever since, the SBI Group and public sector banks have witnessed significant withdrawals. What comes as a surprise is that deposits are not even at the same levels recorded during demonetisation.

PSBs-affected-by-private-banks
Private banks affecting PSBs’ business

A report released by the SLBC (State Level Bankers Committee) revealed that deposits of the SBI Group and public sector banks at the end of the third quarter of FY 2017-18 stood at Rs.1.36 lakh crore and Rs.3.32 lakh crore respectively, while deposits in private banks have increased by 9.42% to Rs.1.28 lakh crore.

According to a Taxpayers Protection Council spokesman, Prakash Kapadia, this shows that depositors are no longer as confident in public sector banks as they were earlier. He added that depositors are wary of scams, but even private banks are prone to scams. However, the fact that private banks are funded from overseas helps in attracting bank customers, and public sectors bank do not enjoy this luxury. As a result, public sector banks are losing out on depositors and private banks hold high-income accounts, which is seeing them strive in an environment where public sector banks are struggling.

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