Solvency and Performance Evaluation of Three Major Public and Private Sector Banks – An Indian Case

Abstract

The banking is one of the industry which affects economy of any nation and its development. As an economic institution the bank is expected directly and positively related to the performance of the economy than most non-economic institutions.¹ Banks are considered to be the mart of the world, the nerve centre of the economies and finance of a nation and the barometer of its economic perspective.²

The role of banks in accelerating the economic growth of an India has been recognized following the nationalization of fourteen major commercial banks in July 1969 and six more banks in April 1980. The concept of banking has significantly changed with nationalization as bank are no longer viewed as a mere lending institution, They are specifically called to use their resources to attain social and economic development of the nation. Hence it is important to make a comparative evaluation of Indian Public and Private sector bank. The study has revealed that average debt is higher in case of public sector bank, profitability is highest in case of private sector banks and aggressive plans to lending funds are in private sector banks as against banks under study.