BY:

JUNAID SHAH
NISHTHA BANSAL
SHALLY PRADHAN
PUBLIC BANKS V/S
PRIVATE BANKS- A
COMPARATIVE STUDY
TYPE: PUBLIC
FOUNDED: 1
ST
JULY, 1956
HEADQUARTERS: MUMBAI, INDIA
CHAIRMAN: ARUNDHATI BHATTACHARAYA
REVENUE: INR 200,560 Crores
PROFIT: INR 17,916 Crores

TYPE: PUBLIC
FOUNDED: 11
TH
NOV, 1919
HEADQUARTER: MUMBAI, INDIA
CHAIRMAN: MR ARUN TIWARI
REVENUE: INR 21,144 Crores
POFIT: INR 208.12 Crores



TYPE: PRIVATE
FOUNDED: 1994
HEADQUARTER: MUMBAI, INDIA
CHAIRMAN: SANJIV MISRA
REVENUE: INR 34,000 Crores
PROFIT: INR 1,277 Crores

TYPE: PRIVATE
FOUNDED: 1954
HEADQUARTER: MUMBAI, INDIA
CHAIRMAN:: K. V. KAMNATH
REVENUE: RS. 83,824 Crores
PROFIT: INR 9,920 Crores
COMPARASON
BETWEEN public
BANKS AND
PRIVATE BANKS
Today banks follow a willful strategy of building a network of branches and ATMs with
effective penetration so that they can continue to enlarge their geographical coverage of
centres with potential for growth. The banks try to deeply entrench across the country with
significant density in areas conducive to the growth of their businesses.
The private sector banks are spreading its wings at a much faster rate than public sector
banks. The customer base of these banks has grown manifold since they are able to
provide innovative services to the customers at a much faster pace. This is leading them
to capture more market share and eating up some of the share of their public sector
counterparts.

Fig.1 % yoy growth in banks network (source: RBI)
Every bank aspires to grow and its growth can be judged by various parameters like
growth in balance sheet size i.e. asset base, improvement in the bottom line and many
others.
The public sector banks asset base and income grew at a decent rate in the last 2 years
whereas there was a great fluctuation in case of new private sector banks mainly due to
recession. But the growth of these banks was phenomenal during 2010-11 that shows
their ability to recover fast after such a catastrophe.

% Growth in Balance Sheet
Size
% Growth in Total Income
2010 2011 2010 2011
New Private Sector
Banks
10.86% 23.51% -2.19% 14.63%
Public Sector Banks 17.93% 19.21% 12.46% 16.71%
Fig.2 % Growth in banks Balance Sheet & Income (Source: RBI)
Productivity can be considered as one measure of efficiency of banks. Productivity growth
is important to the banks because it means that the firm can meet its obligations to
employees, shareholders, and governments (taxes and regulation), and still remain
competitive in the market place. It is a ratio of what is produced to what is required to
produce. In the banking scenario productivity can be measured by profit per employee,
business per employee.
These ratios can be misleading since banks can improve these ratios by trimming their
employees during recessionary environment. This is evident since asset base and profit
levels declined during 2009-10 for new private sector banks but still the above ratios
showing a continuous increasing trend. This was only possible when there is large lay-off
of employees which is actually what had happened with these banks during the period
2008-10. It was only in 2010 when the business started to pick up back again they started
to hire. Overall public sector banks scores higher when it comes to employee retention
which is also evident from the graph.

Fig.3 Productivity (Source: RBI)

PUBLIC BANKS AND PRIVATE BANKS
BANKS State bank of India Union bank Axis bank ICICI bank
Saving account (ROI) 4% 4% 6% 4%
Fixed deposit-1 year period
(ROI)
9% 9% 9% 9%
Personal loan (ROI) 14.50% 15% 15.50% 15.75
Housing loan (ROI) 10.15% 10.25% 10.25% 10.25%
Educational loan (ROI) 13.50% 12.50% 17%
Car loan (ROI) 10.95% 10.70% 11.50% 10.50%
Base rate
10% 10.25% 10% 10%
No. of branches
17000 3500 2225 3539
No. of ATM'S
27000 4130 11796 11162
Objective
Marketing
Financial inclusion
Procedure
Social responsibilities
Public trust
ROI ON DEPOSITS
BANKS/ ROI State bank of India Union bank of India Axis bank ICICI bank
Saving account 4% 4% 6% 4%
Fixed deposit (1 year) 9% 9% 9% 9%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
State bank of
India
Union bank of
India
Axis bank ICICI bank
R
a
t
e

o
f

I
n
t
e
r
e
s
t

Banks
ROI ON DEPOSITS
Saving account
Fixed deposit (1 year)
ROI ON BANK LOANS
BANKS/ ROI State bank of India Union bank of India Axis bank ICICI bank
Personal Loan 14.50% 15% 15.50% 15.75%
Housing Loan 10.15% 10.25% 10.25% 10.25%
Educational Loan 13.50% 12.50% 17%
Car Loan 10.95% 10.70% 11.50% 10.50%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
18.00%
Personal
Loan
Housing Loan Educational
Loan
Car Loan
R
a
t
e

o
f

I
n
t
e
r
e
s
t

Type of Loan
ROI ON BANK LOANS
State bank of India
Union bank of India
Axis bank
ICICI bank
NUMBER OF BRANCHES
BANKS State bank of India Union bank of India Axis bank ICICI bank
No. of branches 17000 3500 2225 3539
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
State bank of India Union bank of India Axis bank ICICI bank
N
o
.

o
f

B
r
a
n
c
h
e
s

NUMBER OF BRANCHES
No. of Branches
NUMBER OF ATMS
BANKS State bank of India Union bank of India Axis bank ICICI bank
No. of ATM'S 27000 4130 11796 11162
0
5000
10000
15000
20000
25000
30000
State bank of India Union bank of India Axis bank ICICI bank
NUMBER OF ATM'S
No. of ATM'S
SURVEY ANALYSIS
0
2
4
6
8
10
12
14
16
18
nationalised banks
private banks
Around 57% people prefer nationalized
banks over private banks and the reasons
stated are:
High security
Low rate of interest on loans
Larger coverage
Cost effective
More transparency





The rest 43% people find private sector
banks better due to following reasons:
Better services
Higher returns
Better customer relations
Less tedious procedures
Attractive offers



CONCLUSION
Nationalized banks are preferred by those
customers who dont want to take much risk.
These banks mainly target on the weaker
sections of the society as their objective is social
betterment.
Private banks are a preferred choice amongst
the elite classes of the society who value
customer services and high returns.