ESSAY ON IMPACT OF PRIVATIZATION IN INDIAN BANKING SECTOR – ESSAY 2 (400 WORDS)

ESSAY ON IMPACT OF PRIVATIZATION IN INDIAN BANKING SECTOR – ESSAY 2 (400 WORDS)

Introduction

The banking sector in India was initially under the public sector. However, a number of factors led to the decision of privatization of this sector. The impact of privatization of the Indian banking sector has largely been positive however it also has its set of drawbacks.

Impact of Privatization in Indian Banking Sector

Here is a look at the impact of privatization on the banking sector of our country:

1. Increased Efficiency

With the privatization of the banking sector in India, the power to run this sector has gone in comparatively efficient hands. This has thus improved the condition of the banking sector in the country.

2. Improved Services

Quite a few private banks have been opened in the country and the competition in this sector has led to improved service. Each bank is making an effort to provide better services to fetch more and more customers unlike earlier when people suffered due to monopoly of the banking sector.

3. Enhanced Schemes and Interest Rates

In an attempt to lure more customers and make more profit the private banks keep coming up with new schemes that offer greater rate of interest and various other benefits to the consumers. This works in the benefit of the general public.

4. Better Customer Support

With the privatization of the banking sector the customer support service has also improved. Private banks have their own call centres that are dedicated towards answering the queries of the customers, adhering to their complains and taking service requests. This is a great add on for the customers who earlier had to visit the bank for each and every task.

5. Misguidance to Earn Profit

Since private banks aim at making more and more profit to stay ahead of their competitors they at times use unfair means to amp their profit ratio. This may include providing incomplete or wrong information to the customers at the time of opening of account or while rendering loan or credit card. Customers often suffer due to this as they do not get the kind of return they are committed or have to pay more interest in case of loan.

Conclusion

Just as various other sectors that have been privatized, the Indian banking sector has also benefitted largely by privatization. The services and schemes being provided by the banking sector have improved owing to the competition among different private banks. However, since the ultimate aim of the private bank owners is to earn profit, they at times misguide their customers/ perspective customers to make profit.