Private Sector Banks-Bright Days Ahead

Bright Days Ahead T S Malgi United Western Bank Ltd Satara ALL of a sudden private sector banks in India have begun to attract attention of the authorities and industrialists in the corporate sector. Virtual competition amongst the corporate sector enterprises to take over private sector hanks, which remained uncared for and neglected for a long time, has become the talk of the town. Even the authorities until recently were totally indifferent to their very existence Thanks to the Report by the World Bank, Reform of the Financial Sector in India and the subsequent foreign ex change crunch and also the insistence of IMF on the govern ment to liberalise and introduce the element of competition in the Indian economy, the future of private sector banks have suddenly become bright. It is reported that the Bangurs have acquired 37 per cent share in Bank of Rajasthan and quite a few other successful and viable private sector banks have become a major attraction for the corporate sector. The Narastmham Committee is reported to have recommended, among other things, setting up of banks by corporate sector The capital requirement is estimated at Rs 50 to Rs 100 crore for setting up of a new bank Instead of raising such a huge sum the private corporate sector has naturally turned its eye- on the existing viable and efficient private sector banks Whatever the reasons, once again these uncared-for private sector banks have come into the limelight As against this, until recently the Indian private sector bank ing system was sitting at one end of seesaw, at the other end was the government/Reserve Bank of India The up-down movement of the private sector banks was as per the whims of the other end livery alternate day, there was talk either about their nationalisation, amalgamation with nationalised hanks or merger Thus, this sector has always been under ten sion as it was always kept in dark in respect of its future It did not know whether the next moment it would have any movement at all or a total.collapse Why is this group of 24 banks