Private Bank and

Nationalised Bank

Prepared by:Ankit.H.Bhatt
Roll No:01
S.Y.BMS
Subject:Banking and Insurance
Submit to :Reshma Miss
 Definition
 Private banks are banks that are not incorporated. A private bank is
owned by either an individual or a general partner(s) with limited
partner(s). In any such case, the creditors can look to both the "entirety
of the bank's assets" as well as the entirety of the sole-
proprietor's/general-partners' assets.
 Nationalised bank is the government bank that is the repository of all deposits
payable to the government . It is a bank that has been taken over by the
government - in other words, it is no longer privately owned.
History of Private Banks in India
 Private bank
 The new private banks emerged on the
Indian financial topography in
1994.narsimha committee envisaged a large
role for the private sector banks in 1991.
 The RBI issued the fresh banking licenses to
the private sector banks
 The new private sector banks have grown
through the mergers and acquisitions.
History of nationalised bank in India

 Commercial banks were operating like any

other business and they were mainly concerned
with the maximisation of their private gains.
They were lacking in social purpose.
 Therefore, On July 19th ,1969 fourteen
commercial banks with deposit worth Rs. 50
corer or more were nationalised by the
government. This was hailed as a historic event
by the people.
 Objectives of nationalised bank
 Provision of adequate credit for agriculture
and small scale industry and export
 Encouragement of anew class of
entrepreneurs.
 The provision of adequate training as well
as terms of service for the bank staff.
 Objectives of private banks
 Profit maximisation
 customer satisfaction

 Enabling Conditions for business

Which is better nationalised bank or
private bank
 Nationalised banks are one grade safer than the
private banks .because if nationalised bank goes
bankrupt than the money of depositors will be
paid from the budget of government of India
 But it doesn’t mean that you should not do
banking with the private sector banks .private
sector banks sometimes can give you more
services like internet banking, at door service
etc…
 Cont…
 Any bank’s health weather it is a private or a
nationalised is depending on certain ratios
 The health indicators of any bank are as below
 NPA-Non Performing asset ratio- the lower
the NPA, the better
 CAR- Capital adequacy ratio – the minimum
CAR is 9%,the higher the better
 NIM-Net interest margin –the higher the NIM,
the better
 Cont…
 Cost to income ratio – The lower the better
 CD Ratio- credit to deposit ratio- higher CD
ratio reflect more credit being given out ,lower
the better
Other main points to be remembered
 If a private sector bank goes bankrupt stocks
,government bonds, government securities
,mutual funds units , and any other demat
holding is absolutely safe and secure
 Because according to the law, all the demat
holding are in custody of SEBI and in the
custody of bank weather it is nationalised or
private
 Cont…
 According to laws of the government of india,
the banks guarantee up to Rs.1 lakh in case a
crisis affecting the bank .
 So deposits up to Rs. 1 lakh in any private
bank is also safe in case of bankruptcy of
private bank . But any amount in excess of
Rs.1 lakh will be not refund to you and lost in
case of if private bank goes bankrupt
 Differences between private bank
and nationalised bank
 Nationalised bank  Private bank
 Public Sector bank  Where as Private
means any Government Sector Banks are those
Sector Bank/Institute Banks where the
that goes public... that management is
the main motto of controlled by Private
social welfare other individuals
than Maximising Profit .Maximising profit is
remains. the basic motto.
 Differences between private bank
and nationalised bank
 Nationalised bank  Private bank
 Nationalised banks  private banks could
follow the RBI Interest have some changes
rules strictly
but only after the
approval from the
RBI!
Thank You