Challenges being faced by Indian Public Sector Banks

In India, public secotr banks(PSB) have 51% goverment holding. This has become an obstacle in raising capital.

PSBs are shouldering many social-macro economic objectives such as financial inclusion, agri-lending targets, implementation of Government schemes which, some times, result in lower asset quality.

Public Banks also have to deal with staff unions, whose interests are not the same as that of the bank or country. They hold managements of banks to ransom.

Attrition is also a challenge given the remuneration levels in the public sector. PSBs are losing out good talent which is migrating to the private sector.

Identifying estimated $600 billion spending on infrastructure in next five years, expanding middle class and growing per capita consumption are some of the challenges being faced by PSBs. In these circumstances, talent, operation and control and ownership are biggest issues for PSB banks in achieving competitiveness