PSBs not living up to nationalisation goal: India Ratings and Research

Private sector has been able to give more credit to agriculture, MSMEs compared to PSBs in the last few years, the report noted.

Published: 09th August 2019 08:02 AM  |   Last Updated: 09th August 2019 08:02 AM   |  A+A-

SBI

SBI (File Photo | EPS)

By Express News Service

MUMBAI: It is time to re-evluate the objectives of the public sector banks (PSBs) and their role in the Indian economy as government capital infusion has largely gone in to fill the losses and failed to contribute to credit growth, India Ratings and Research said in a paper on recapitalization of PSBs.The objectives of Indradhanush scheme has been diluted as recapitalization has not been based on performance.

The percentage of incremental credit growth in recent years of PSBs as well as the fall in overall market share of PSBs shows that it isn’t fulfilling the nationalization mandate of financial inclusion, the paper said. “The market share of PSBs fell to 46.5 per cent in FY19 from 60.9 per cent in FY14. More importantly, in terms of incremental credit, the share of PSBs has been 26.2 per cent over FY14-FY19,” it pointed out.

Priority sector lending, a key focus area for PSBs have also seen lower compared to their share in the banking system. Private sector has been able to give more credit to agriculture, MSMEs compared to PSBs in the last few years, the report noted.

Stay up to date on all the latest Business news with The New Indian Express App. Download now
(Get the news that matters from New Indian Express on WhatsApp. Click this link and hit 'Click to Subscribe'. Follow the instructions after that.)

Comments

Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the newindianexpress.com editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on newindianexpress.com are those of the comment writers alone. They do not represent the views or opinions of newindianexpress.com or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. newindianexpress.com reserves the right to take any or all comments down at any time.

flipboard facebook twitter whatsapp