Public Sector Bank’s Future in The Country

Abstract

In India, banks have been crucial to the country's economic expansion. Public sector banks (PSBs) have been at the forefront of providing banking services in the most remote regions of the nation and mobilizing resources from far rural communities since the 1970s. PSBs have borne the brunt of the social agenda's burdens without receiving any funding.

Thus, the government has a right to periodically recapitalize PSBs in order to preserve their credibility, as they represent almost 70% of all banking activity in the nation. The necessity for Public Sector Bank restructuring may be explained by looking at the increase of non-performing assets (NPAs) and how that affects PSBs' financial degradation over time. This is because the government may need to take similar measures again in the future. The question of whether the Government of India's restructuring act creates globally competitive "too big to fail" banks will be addressed by the improvement in PSBs' financial performance metrics during the coming years. The future of public sector banks in the nation will be covered in this essay.