Public sector banks and Private sector banks
Public
Sector Banks: Public Sector Banks are those banks in which majority stake
(i.e., more than 50% of the shares) is held by the government of the country.
The words such as “The” or “Ltd” will not be found in their names because the
ownership of these banks are with the government and the liability is unlimited
in nature. Some examples of public sector banks in India include Andhra Bank,
Canara Bank, Union Bank of India, Allahabad Bank, Punjab National Bank,
Corporation Bank, Indian Bank and so on.
Private
Sector Banks: Private Sector Banks are those banks which are owned by group of
private shareholders. They elect board of directors which manages the affairs
of the banks. Some examples of private banks in India include The Lakshmi Vilas
Bank Ltd., The Karur Vysya Bank Ltd., The City Union Bank Ltd., HDFC Bank, Axis
Bank and son.
Difference between Public sectors banks and Private
sectors banks
Basis
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Public
Sectors Banks
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Private
Sectors Banks
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1. Ownership
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Public sector banks are owned, managed and
controlled by the government.
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On the other hand, private sector banks are
owned, managed and controlled by the private individuals or general citizens.
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2. Indian and foreign bank
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Public sector banks are Indian banks and they
do not include foreign banks.
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Private sector banks may be Indian banks as
well as foreign banks.
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3. Objective
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Public sectors banks aims at serving the
society besides earning profit.
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Private sector banks are mainly driven by
profit motive.
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4. Shareholding
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In public sector banks more that 50% of
capital or full capital is supplied by the Government.
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But, in private sector banks, all total
capital is supplied by the shareholders of the bank.
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5. Employees
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In public sector banks required employees are
appointed by the Government.
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But in case of private sectors banks
required employees are appointed by the owner of the banking company.
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6. Sharing of profit
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The profits earned by the public sector
banks go to the Government.
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The profits earned by the private sector
banks goes to the shareholders of the bank.
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