Apropos to the so called expert view by Ms. Latha Venkatesh today, titled “Banks set to turn less profitable, Some need to die”
The number of Jan Dhan Accounts opened so far is 188.6 Million as per Govt of India site and the total number of accounts in our country was 684 million SB accounts in 2013 itself as per Crisil report published in the Business Standard dated 28th June 2013. Today, it is around 900 million accounts and not 210 million quoted by your expert. As on 31st March 2015, SBI itself has 273.2 million accounts.
Your expert is a good TV anchor and she has extracted some useful information shared by 3 bankers who have rightly pointed out that there will be competition and the existing banks will be able to cope up with the competition.
But unfortunately, Ms. Latha Venkatesh ends the article by saying “the midcap PSU banks looks set to die. And this death won’t be a loss but a gain. Even the most ardent proponents of PSU Banks have began to admit that Bank Nationalisation is an unmitigated failure. The advent of payment and small banks may be an opportunity for the country to cleanse out atleast some of these PSU Banks that have become irreparable failures. PSU Banks have been hot beds of political patronage for a very long time which is why I worry if the Govt will have the political will to kill them or let them die. One hopes these entities are not kept alive at the cost of the tax payers money as has been done with Air India.”
Public Sector Banks are capable to face any competition as they have faced earlier also. They are not eating tax payers money. Let me quote an article by Dr. Soumya Kanti Ghosh published in Economic Times on 21st January 2015.
As on 2013 India had only 11.4 Bank Branches per 1 lakh population whereas Australia had 31.8, Belgium 44.4, Brazil 47.3. Bulgaria 61.2, Canada 21.4, Cyprus 97, France 38.8, Italy 68.4, Japan 33.9 , New Zealand 33.3, Spain 85.1, Switzerland 48.8 and United States 35.3 Branches per one lakh population. So our country has still lot of scope for more Banks and more branches.
All India State Bank Officers’ Federation &
Senior Vice President, All India Bank Officers’ Confederation