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Journalism of Courage
No prizes for guessing who’s more aggressive in banking: it’s the private sector, of course. It can be found in the increase in lending in 2003 over 2002 that private banks outstripped their public sector counterparts by 12 per cent.
While in absolute terms public sector banks lent higher amounts, in percentage increase terms private banks have been ahead in the race. Its the case in core sectors like agriculture, transport operation and personal loans also. In lending to the agriculture sector, private banks showed a close to 30 per cent increase compared to PSBs’ 16.53 per cent for the same period. The trend carries on in 2004.
However, private banks still have a long way to compete with PSBs. While the latter gave a total credit of Rs 59,992 crore to agriculture in 2003, private banks gave loans totalling only Rs 4,624 crore to the farm segment.
In the personal loan segment, private banks raised their credit by 62.1 per cent in 2003 over 2002. PSBs increased their credit in this segment only by 35.9 per cent. Similarly, in the industry sector, private banks increased their lending by 25.29 per cent, while PSBs increased it by only 12.35 per cent in the same period.
Icra analyst Vineet Nigam said growth has been greater in private banks as the base is still very low for them. ‘‘In absolute terms, PSBs are still lending more than private sector banks. Scope for the private sector banks is also therefore greater,’’ he said.
PNB GM Arun Kaul also said PSBs enjoyed 80 per cent of the total market in India. ‘‘Since private banks have such a small base, a little increase would seem subsantially high”.
