Public and private sector banks in india

Financial Institutions & Services

A comparative Study on Public and Private Sector Banks in India

Public Sector

A public sector enterprise is an organisation which is

• Owned by public authorities including Central, State or Local authorities, to the extent of 50% or more;
• Is under the top managerial control of owning public authorities
• Is established for the achievement of a definite set of public purpose
• Is consequently placed under a system of public accountability
• Is engaged in an activity of business character

Private Sector

The private sector enterprise is an organisation which is owned, managed & controlled by private individuals or a group of individuals or both. This is also engaged in business activity but with the motive of profit maximisation rather than public service like in case of public sector enterprise.

Objectives of Public Sector Enterprise

• Helps in rapid economic growth & industrialisation of the country & creation of necessary infrastructure for economic development,
• To earn return on investment & thus generate resources for development,
• To promote redistribution of income and wealth,
• To create employment opportunities,
• To promote balanced regional development,
• To promote import substitution, save and earn foreign exchange for the economy
• Acts as a countervailing force and put up an effective competition to undertakings in private sector and
• To gain control over the commanding heights of the economy.

The following are the list of Public Sector Banks in India

• Allahabad Bank
• Andhra Bank
• Bank of Baroda
• Bank of India
• Bank of Maharastra
• Canara Bank
• Central Bank of India
• Corporation Bank
• Dena Bank
• IDBI Bank
• Indian Bank
• Indian Overseas Bank
• Oriental Bank of Commerce
• Punjab & Sind Bank
• Punjab National Bank
• Syndicate Bank
• UCO Bank
• Union Bank of India
• United Bank of India
• Vijaya Bank

List of State Bank of India and its subsidiary, a Public Sector Banks

• State Bank of India
• State Bank of Hyderabad.
• State Bank of Indore.
• State Bank of Mysore.
• State Bank of Saurastra.
• State Bank of Travancore.
• State Bank of Bikaner & Jaipur.

Private Bank

The first Private Bank in India to receive an in principle approval from the Reserve Bank of India was Housing Development Finance Corporation Limited, to set up a bank in the private sector banks in India as part of the RBI’s liberalization of the Indian Banking Industry. It was incorporated in August 1994 as HDFC Bank Limited with registered office in Mumbai and commenced operations as Scheduled Commercial Bank in January 1995.

ING Vysya, yet another Private Bank of India was incorporated in the year 1930. Bangalore has a pride of place for having the first branch inception in the year 1934. With successive years of patronage and constantly setting new standards in banking, ING Vysya Bank has many credits to its account.

List of Private Banks in India

• BANK OF PUNJAB.
• BANK OF RAJASTHAN.
• CATHOLIC SYRIAN BANK.
• CENTURION BANK.
• CITY UNION BANK.
• DHANALAKSHMI BANK.
• DEVELOPMENT CREDIT BANK.
• FEDERAL BANK.
• HDFC BANK.
• CICI BANK.
• NDUSIND BANK.
• NG VYSYA BANK.
• AMMU & KASHMIR BANK.
• KARNATAKA BANK.
• KARUR VYSYA BANK.
• LAXMI VILAS BANK.
• SOUTH INDIAN BANK.
• UNITED WESTERN BANK.
• UTI BANK .

PUBLIC BANK

Allahabad Bank

Established on April 24, 1865 in Allahabad by a group of European, Allahabad Bank is also the oldest Joint Stock Bank of India .Allahabad Bank is one of the leading banks in India. Allahabad Bank was one of those. Currently it offers a whole range of financial services to thousands of customers across the nation through its 2260 branches, besides its Internet banking services. In the year 1969, the Government of India nationalized 13 commercial banks Allahabad Bank has its headquarter located in Kolkata.

Brief History

After its establishment in 1865, Allahabad Bank became a part of P & O Banking Corporation in 1920 with a bid price of Rs. 436 per share. In 1923, considering the business opportunities, the headquarter of the bank was shifted to Kolkata. On July 19, 1969, when the Government of India nationalized Allahabad Bank along with 13 other banks, it had 151 branches across the nation with deposits of Rs. 119 crore and advances of Rs. 82 crore. In 1989, United Industrial Bank Ltd. merged with nationalized Indian bank. Allahabad Bank also instituted a wholly owned subsidiary for Merchant Banking, called Allahabad Bank Finance Ltd.

Allahabad Bank released its first Initial Public Offer (IPO) of 10 crore (face value Rs. 10 per share) in October, 2002. It reduced the Government shareholding to 71.16%. It again released Follow on Public Offer in April, 2005 of 10 crore equity shares . It again reduced the Government shareholding to 55.23%.

It was June, 2006 when the Allahabad Bank went international to open up its first Representative Office at Shenzen in China. In October, 2006, Allahabad Bank went high-tech for roll out its first branch under Core Banking Service. It opened up its first overseas branch at Hong Kong in February 2007. In March 2007, the business of Allahabad Bank crossed Rs. 1,00,000 crore mark.

Products

Following are the list of products offered by Allahabad Bank to its customers:

1. Deposit Products
• Flexi-Fix Deposit.
• Rs. 5 Banking.
• All Bank Mahila Sanchay Account.
• All Bank Vikash SB Account.
• All Bank Premium Current Accounts.
• Current Plus Deposit Scheme.
• Sishu Mangal Deposit Scheme.
2. Retail Credit Products
• Housing Loan.
• Education Loan.
• Car Loan.
• Personal Loan for Pensioners.
• Personal Loan for Doctors.
• Loan Against NSC/KVP.
• Allahabad Bank Rent Loan.
• Allahabad Bank Property Scheme.
• Allahabad Bank Furnishing Loan.
• Gold Loan Scheme.
• Allahabad Bank Mobile Scheme.
• Overdraft Facility in SB Accounts.
• Allahabad Bank Abhushan Scheme.
• Allahabad Bank Trade Schem.
• Allahabad Bank Gyan Dipika Scheme.
• Allahabad Bank Reverse Mortgage Scheme.
3. Other Credit Products
• Allahabad Bank-Expo.
• Allahabad Bank Kisan Shakti Yojana.
• Allahabad Bank Kisan Credit Card.

Other Services

The Following are the list of other services offered by Allahabad Bank.

• Depository Services.
• Depository Services.
• Visa Debit Cum ATM Card.
• Gold Card Scheme for Exporters.
• Charter for MSMEs.
• Government Business.
• National Electronic Funds Transfer.
• Regional MSME Care Centres.
• MSME Care Centre in Jharkhand State for All Banks.
• All Ayshman Bima Yojana.
• Cash Management Services.
• Real Time Gross Settlement.

Corporate Details:

Bank of Baroda India from an organization based on private capital and state ownership, at present is embodiment of enterprise and corporate governance, situated in Mumbai. The new logo of the bank comprises dual B alphabet, holding the sun rays. It was founded by Maharaja Sayajirao Gaekwad in 1908 in Baroda. It is referred as the Baroda Sun.

Activities:

The general product and services offered by the Bank of Baroda India are,

• Corporate – wholesale banking, deposits, loans and advances, appraisal and merchant banking, cash management and remittances.
• Personal – deposits, Gen-Next Services, retail loans, credit cards, debit cards, Baroda Health, Multi City Cheque , lockers.
• Business – deposits, loans and advances, Multi City Cheque, BoB money express, Collection services, ECS, lockers.
• International – NRI services, FCNR loans, offshore banking, export and import finance, international treasury.
• Treasury – domestic and forex operations.
• Rural – deposits, priority sector advances, remittances, pension, lockers.

Performance:

• The Baroda bank secured the ISO 9001:2000 certification for its15 branches, and by the end of 2007 it has a target to achieve this quality mark for 54 more branches.
• Financial Highlights – the business results of the Bank of Baroda India as recorded on 31st March, 2006 are, the total deposits Rs.93,661.99crores, total advances Rs. 59911.78 crores, total investments Rs.35114.22 crores, total assets Rs.113392.53 crores and net profit Rs.826.96 crores.

Andhra Bank

Andhra Bank was registered on 20 November 1923 and commenced business on 28 November 1923 with a paid up capital of Rs 1.00 lakh and an authorised capital of Rs 10.00 lakhs. The Bank crossed many milestones and the Bank’s Total Business as on 30.06.2008 stood at Rs.83,256 Crores with a Clientele base over 1.74 Crores.The Bank is rendering services through 2139 Business Delivery Channels consisting of 1371 branches, 66 Extension Counters, 38 Satellite Offices and 664 ATMs spread over 21 States and 2 Union Territories as at the end of June, 2008. To provide value-added services to Customers, the Bank has set up its own 664 ATMs as on 30.06.2008. Of which 03 Mobile ATMs and two with Biometric access. Besides, ATM sharing arrangements with several Banks including SBI group, IDBI Bank, UTI Bank, HDFC Bank, Indian Bank and others under National Financial Network Switch covering 24856 ATMs.All Branches are 100% computerized, 1186 units viz., 1101 Branches, 68 Extension Counters, 15 Service Centres networked under Cluster Banking solution and providing “Any Branch Banking”. Real Time Gross Settlement Facility and National Electronic Fund Transfer facility has been introduced in 723 Branches.

• Bank is migrating to “Centralized Core Banking Solution 118 Branches have already migrated to CBS. It is proposed to cover 550 branches by September 2009. This will benefit the customers, who will have access to banking and financial services anytime, anywhere through multiple delivery channels.[clarification needed] Andhra Bank is a pioneer in introducing Credit Cards in the country in 1981 .
• Our Bank introduced Internet Banking Facility to all customers of cluster linked branches.[clarification needed] Rail Ticket Booking Facility is made available to all debit card holders through IRCTC Website through a separate gateway. Corporate Website is available in English, Hindi and Telugu Languages communicating Bank’s image and information. Bank has been given ‘BEST BANK AWARD’ a banking technology award by IDRBT, Hyderabad for extensive use of IT in Semi Urban and Rural Areas on 02.09.2006.[citation needed] IBA Jointly with TFCI has conferred the Joint Runner-up Award to the Bank in the Bet Payments initiative in recognition of outstanding achievement of the Bank in promoting ATM Channel.Bank successfully conducted ” Bancon 2006″, a two day event at Hyderabad, deliberating on Inclusive Growth – A New Challenge. Kiddy Bank Scheme, with insurance benefits, was relaunched to inculcate savings habit among the children. Bank has mobilized nearly 90000 new accounts during 2007-08.[citation needed]
• As a part of “Financial Inclusion”, Bank adopted two districts, namely, Srikakulam in Andhra Pradesh and Ganjam in Orissa and achieved 100% coverage. Bank has introduced Smart Card Scheme Pilot project in Warangal District and the same will be extended to other Lead Districts in due course. Bank has opened 2.11 lakh accounts under “No-frill accounts” category till 30.06.2008.
• Andhra Bank, along with A P State Government, NABARD, Canara Bank, Indian Bank, IOB and SBH sponsored the Andhra Pradesh Banker’s Institute of Entrepreneurship Development, which will offer training to unemployed youth for improving their skills in Andhra Pradesh.
• Bank adopted Gundugolanu village, West Godavari District, Andhra Pradesh – birth place of Dr.Bhogaraju Pattabhi Sitaramayya for all-round development. A comprehensive budget with an outlay of Rs.5.50 Crore is finalized for improving health, sanitation, education and social service facilities in the village.
• Bank has been ranked No.1 in terms of number of Life Insurance Policies mobilized amongst all the Agency Banks dealing with “Life Insurance Corporation of India”. Bank also has tie-up with United India Insurance Company Limited under Bancassurance.
• Bank was ranked 532nd for the year ended 31.03.2007 amongst Top 1000 Banks in the world by “The Banker” – a London based publication based on Tier I Capital as defined by Basel’s Bank for International Settlements .
• Bank is in the process of forming a Joint Venture in Malaysia in association with Bank of Baroda and Indian Overseas Bank.
• The Bank opened its Representative Office in Dubai in May, 2006 and Representative Office at Jersey City, New Jersey (U S A),in June 2009.
• Bank feels United States would be an ideal location as Andhra Bank has been a household name among many NRIs there. A foothold in New Jersey is strategic for the 84 year old bank as it has a large number of non resident Indians from Andhra Pradesh.
• Thus Bank accords utmost concern to customer satisfaction by offering innovative and need based financial products and services using state-of-the art technology.

Deposit Schemes

• Savings Accounts
• Current Accounts
• Term Deposits
• Arogyadaan Scheme
• Bancassurance Life
• Bancassurance (Non Life)

Bank of India

Bank of India was established on 7th September, 1906 by a group of reputed businessmen from Mumbai. The Bank was under private ownership and control till July 1969 when it was nationalized along with 13 other banks.

It is starting with just one office in Mumbai, with a paid-up capital of Rs.50 lakh and 50 employees; the Bank has made fast progress over the years and blossomed into a mighty institution with a strong national presence and sizable international operations. The Bank gets a premier position among the Nationalized Banks in India.

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Main Activities

Amongst the standard services provided by Bank of India the special service that it provides is Multi Branch Banking. Multi Branch Banking service is available to customers of networked branches of the Bank. Under this service, the customer of one branch will be able to transact on his account, from any other networked branch of the Bank. This facility is at present available at 200 cities/towns across the country. A list of MBB branches is available at the end of this page. Services available in MBB

• Cash Deposits
• Cash Payments
• Transfer Of Funds
• Statement of A./c For a Given Period.
• Balance Inquiry.
• Marking Stop Payment Of a Cheque.
• Fate Of a Cheque.

Other Value Added Services such as “Centralized Telebanking”, “SMS Banking”, “PC Banking” would also be available at these networked branches.

Performance

• Since mid-2005, these employees have been seeking low cost deposits. It was chiefly due to this that the bank was able to outperform the industry with a 78 per cent growth in net profit for the third quarter of the current year,2006. After Bank of India introduced Core Banking Software, many employees became redundant. The bank redeployed about 1,200 of them into marketing.
• This kept the cost of funds under control. Further, the bank had been very selective about credit expansion in 2005-06, when advances grew 23 per cent, lower than the industry average. At a press conference, BOI’s Chairman and Managing Director, Mr M Balachandran, said that current account deposits grew 32 per cent during the quarter.

Punjab National Bank of India

Punjab National Bank of India, the first Indian bank started only with Indian capital, was nationalized in July 1969 and now the bank has become a front-line banking institution in India with 4525 Offices including 432 Extension Counters. The corporate office of the bank is at new Delhi. Punjab National Bank of India has set up representative offices at Alm Kazakhistan Shanghai and in London and a full fledged Branch in Afghanistan

Activities:

• Current Account – PNB Smart Roamer, PNB Vaibhav, PNB Gaurav
• Fixed Deposit Schemes – Mahabachat Schemes, Spectrum Fixed Deposit Scheme, Anupam Account, Multi Benefit Deposit Scheme.
• Credit Schemes – PNB Flexible Housing Loan, Car Finanace, Personal Loan.
• Social Banking – Krishi Card, PNB Farmers Welfare Trust, Mahila Udyam Nidhi Scheme
• Corporate Banking – EXIM finance, Gold Card scheme for exporters.
• Business Sector – PNB Vikas Udhami, PNB Karigar credit card, PNB Kushal Udhami, PNB Pragati Udhami.
• Savings Fund Account – PNB Prudent Sweep, Total Freedom Salary Account, PNB Vidyarthi SF Account, PNB Mitra SF Account.

Performance:

The total expense was Rs. 2830.44 crore and the net profit was Rs.237.70 crore.The total income of the Punjab National Bank of India as recorded in the quarter ending 31st march 2007 was Rs. 3712.79 crore as compared to Rs. 2926.93 crore on 31st march 2006.

The Punjab National Bank of India has launched the concept of “Any Time, Any Where Banking” through the introduction of Centralized Banking Solution and has recently introduced On line Payment Facility for railway reservation through IRCTC Payment Gateway Project and On line Utility Bill Payment Services, allowing Internet Banking account holders to make their payments anytime from anywhere. Another step taken by Punjab National Bank of India is the launch of its ATM- cum- Debit card.

Private Banks in India

Initially all the banks in India were private banks, which were founded in the pre-independence era to cater to the banking needs of the people. In 1955, after the declaration of first-five year plan, Imperial Bank of India was subsequently transformed into State Bank of India. In 1921, three major banks i.e. Banks of Bengal, Bank of Bombay, and Bank of Madras, merged to form Imperial Bank of India. In 1935, the Reserve Bank of India was established and it took over the central banking responsibilities from the Imperial Bank of India, transferring commercial banking functions completely to IBI. Allahabad Bank, Canara Bank, Central Bank of India, etc. Thus, public sector banks revived to take up leading role in the banking structure. In 1980, the GOI nationalized 6 more commercial banks, with control over 91% of banking business of India.

Following this, occurred the nationalization of major banks in India on 19 July 1969. The Government of India issued an ordinance and nationalized the 14 largest commercial banks of India, including Punjab National Bank . In 1994, the Reserve Bank Of India issued a policy of liberalization to license limited number of private banks, which came to be known as New Generation tech-savvy banks. Global Trust Bank was, thus, the first private bank after liberalization; it was later amalgamated with Oriental Bank of Commerce . Then Housing Development Finance Corporation Limited became the first to receive an ‘in principle’ approval from the Reserve Bank of India to set up a bank in the private sector. At present, Private Banks in India include leading banks like ICICI Banks, ING Vysya Bank, Jammu & Kashmir Bank, Karnataka Bank, Kotak Mahindra Bank, SBI Commercial and International Bank, etc. Undoubtedly, being tech-savvy and full of expertise, private banks have played a major role in the development of Indian banking industry. They have made banking more efficient and customer friendly. In the process they have jolted public sector banks out of complacency and forced them to become more competitive.

Major private banks in India are:

Bank of Rajasthan

A leading private sector bank, the Bank of Rajasthan was founded on the auspicious day of Akshya Tritiya on May 8, 1943, at Udaipur. Shri Rai Bahadur P.C. Chatterji, the then finance minister of the erstwhile Mewar Government, extensively contributed towards the establishment of the Bank.

Catholic Syrian Bank

With the Swadeshi Movement of early 20th century as its base, Catholic Syrian Bank was incorporated on 26th November 1920, in the Thrissur district of Kerala. The bank commenced its operations on 1st January 1921, with an authorized capital of Rs. 5 lakhs and a paid up capital of Rs. 45270.

Dhanalakshmi Bank Limited

The foundation of Dhanalakshmi Bank Limited was laid down on 14th November 1927in Kerala. A group of innovative entrepreneurs had started the bank with a capital of Rs.11,000 and only 7 employees.

Federal Bank

Federal Bank Limited was founded as Travancore Federal Bank Limited in the year 1931, with an authorized capital of Rs. 5000. It was established at Nedumpuram, a place near Tiruvalla, in Central Travancore (a princely state later merged into Kerala), under Travancore Company’s Act 1956.

HDFC bank

Housing Development Finance Corporation Limited, more popularly known as HDFC Bank Ltd, was established in the year 1994, as a part of the liberalization of the Indian Banking Industry by Reserve Bank of India . It was one of the first banks to receive an ‘in principle’ approval from RBI, for setting up a bank in the private sector.

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ICICI Bank

ICICI Bank started as a wholly owned subsidiary of ICICI Limited, an Indian financial institution, in 1994. Four years later, when the company offered ICICI Bank’s shares to the public, ICICI’s shareholding was reduced to 46%. In the year 2000, ICICI Bank offered made an equity offering in the form of ADRs on the New York Stock Exchange .

ING Vysya Bank

ING Vysya Bank Ltd came into being in October 2002, when erstwhile Vysya Bank Ltd was merged with ING, a global financial powerhouse boasting of Dutch origin. Vysya Bank Ltd, one of initial banks to be set up in the private sector of India

Jammu and Kashmir Bank

The origin of Jammu and Kashmir Bank Limited, more commonly referred to as J&K Bank, can be traced back to the year 1938, when it was established as the first state-owned bank in India. The bank was incorporated on 1st October 1938 and it was in more precisely on 4th July 1939. It commenced its business, in Kashmir (India).

Karnataka Bank

Karnataka Bank Limited is a leading private sector bank in India. It was incorporated on 18th February 1924 at Mangalore, a town located in the Kannada district of Karnataka. The bank emerged as a major player during the freedom movement of 20th Century India.

Karur Vysya Bank

The Karur Vysya Bank Limited commonly known as KVB was set up by Late Shri M.A. Venkatarama Chettiar and the Late Shri Athi Krishna Chettiar, the two great visionaries in 1916 in Karur, a textile town in the Tamil Nadu state of India.

Kotak Mahindra Bank

Kotak Mahindra Bank is one of India’s leading financial private banking institutions. It offers banking solutions that covers almost every sphere of life. Some of its financial services include commercial banking, stock broking, mutual funds, life insurance and investment banking.

SBI Commercial and International Bank

SBI Commercial and International Bank, SBI Commercial is a completely owned private auxiliary of India’s biggest banking and financial services set up, the State Bank of India. Established in 1995 to back SBI’s corporate and international banking services, the SBI Commercial and International Bank is the only bank in India to be been awarded ISO-9002 quality systems certification for the Bank as a whole

UTI Bank

Axis Bank was formed as UTI when it was incorporated in 1994 when Government of India allowed private players in the banking sector. The bank was sponsored together by the administrator of the specified undertaking of the Unit Trust of India, Life Insurance Corporation of India (LIC) and General Insurance Corporation ltd.

Yes Bank

Yes Bank is one of the top most private Indian banks. Awarded by the only Greenfield license award by RBI in last 14 years, this bank is established and run by Rana Kapoor and Ashok Kapur with the financial support of Rabobank Nederland, the world’s single AAA rated private Bank.

Citibank India

Citibank India, since 1902, is at present one of the leading consumer finance lender providing its customers best products and services.

Activities:

The Citibank India offers a varied range of financial assistance to its customers like:

• Banking – Suvidha Account, Debit Cards, Citibanking, Citi Gold Wealth Management
• Citi Business – Current Account, Loans, CitiBusiness Card
• NRI Services – Rupee Checking Account, India Deposits
• Online Services – Internet Banking, Bill Payment, Statement on E-mail, E-Commerce, Citi Alert
• Credit Cards – Citibank Gold Card, Jet Airways Citibank Gold Card, Hutch Citibank Card, Indian Oil Citibank Card, Shoppers’ Stop Citibank Card, MTV Citibank Card, Citibank Silver International Card, CRY Card, WWF Card, Times Card, Citibank Cricket Visa Card
• Deposit Accounts – Savings Accounts, Current Accounts, and Term deposits.
• Loans – Personal Loans, Home Loans, Loan against property, Auto Loan, Ready Credit
• Investments – Mutual Funds, Demat.
• Insurance – Life Insurance Solutions, Credit Insurance, Health Insurance, Travel Insurance.

Performance:

There is a relationship manager who guides the clients on the investment issues along with foreign exchange, transaction requests and trade services. Citibank India by launching the CitiBusiness Card have for the first time offered the customers a vast range of benefits, services, business intelligence, deals and discounts that are generally at the disposal of large corporations so far. Moreover without paying any extra charges the customers are assured of world-class transactional convenience like pay orders, demand drafts and payable-at-par cheques .There is a relationship manager who guides the clients on the investment issues along with foreign exchange, transaction requests and trade services

WAYS OF PRIVATIZATION

• DISINVESTMENT
• CONTRACTING
• FRANCHISING
• PREMITING PRIVATE SECTOR ENTER INTO PSU RESERVED AREA
• LIQUIDATION
• LEASING

NEWS RELATED BANK

Banking Sector in Budget 2008

The Union Budget of India for the year 2008-2009 was announced by the Indian Finance Minister, Mr. P Chidambaram, on 29th February 2008. The policies and initiatives taken in the Union Budget of India 2008-2009 on the Indian Banking sector were in tandem with the requirements of the Indian economy.

Small and marginal farmers have been relieved of all farm loans, disbursed till March 2007 and also all loans, which are due till December 2007 and was unpaid till February 2008. These farm loan waivers would be facilitated by all the concerned Public Sector Banks and Regional Rural Banks of India. A total of Rs 60,000 crores would be waived-off under such scheme. The settlement of these loan-waivers will be offered through special type of scheme. Further, the Public Sector Banks and Regional Rural Banks of India were also suggested, to bring within their fold, a minimum of 250 rural household accounts at every branch every year.

The Indira Awas Yojana was brought under the ambit of Public Sector Banks. Loan limit up to Rs 20,000 per unit at 4% interest was fixed under differential rate of interest (DRI) scheme. The Finance Minister also advised the Indian PSU Banks to open 288 branches in minority districts of India. Further, he also asked the Indian banking industry to embrace total financial inclusion. In another landmark decision, the Finance Minister, Mr. P. Chidambaram said that the Ex-banking servicemen in India would be offered employment opportunities in the banking sector.

Another major announcement was that, the much talked-about ‘Banking Cash Transaction Tax (BCTT)’ would be withdrawn from the financial year 2009-2010.

Experts believe the impact of the decisions and policies taken during the Union Budget of India 2008-2009 on the Indian Banking sector would be mixed. It is expected that the Indian PSU banks will face pressure on their net interest margins due to the waiving-off of agricultural loans. Further, the cumulative cost that will be incurred for opening up of new Regional Rural Banks in India may substantially increase the operating cost for the banks. The inclusion of the Indira Awas Yojana houses under the differential rate of interest scheme and at 4% interest will increase the proportion of sub-PLR lending for the concerned banks.

The major Public Sector Banks of India like the State Bank of India, Bank of Baroda, Punjab National Bank may see their net interest margins shrinking till the subsidy for waiver of agricultural loans is being completely released. Moreover, experts are skeptical about the long term benefit of such agricultural loan waiver as offered through the Union Budget of India 2008-2009.

The Development Credit Bank, a private sector lender has launched its credit card business called ‘DCB Advantage Card’ on 4th March 2008. The Bank has tied up with ICICI Bank in order to extract the best skills out of it as well as to utilize its experience for a successful execution of the task. The credit card business launched by the Development Credit Bank is available to all its potential customers all across India. The credit card holders of DCB will enjoy a wide