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Essay on merger of public sector banks

essay on merger of public sector banks

Tertiary, sector or, service Sector is when the activity involves providing intangible goods like services then this is part of the tertiary sector. So why do banks merge? The purpose of the public sector is not just to earn profits. Ultimately leading to profit erosion of banks. Reach with be greater, with the customer base expanding to accommodate the customers of all participants in the merger. Only a few of its recommendations became banking reforms of India and others were not at all considered. Also, unless there is a change in the operating structures, mergers will only be symbolic and may not deliver the desired results in the long run. Most importantly, a merger will bring the best and the worst of both banks together, which means weaknesses of the banks will also initially get adopted into the system before they can be weeded out. Improvement OF operations, each branch, and the bank on the whole, will be welcoming fresh blood into its system, which will increase the chances of introducing fresh ideas that will lead to betterment of the banking system.

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Narasimham's Committee it was one of the reasons for the poor profitability of banks. In order to pursue competitiveness and efficiency, banks must enjoy autonomy so that they can reform the work culture and banking technology upgradation will thus be easy. It was told to review the banking reform progress and design a programme for further strengthening the financial system of India. The unorganised sector covers most of the rural labour and a substantial part of urban labour, it includes activities carried out by small and family enterprises, partly or wholly with family labour. . Free 800 words essay on bank mergers: advantages AND disadvantages for school and college students. Monday, 28th Nov 2016, 01:13:41.

This will trigger widespread discontent. Insurance overview, understanding Insurance insurance life general, insurance is a system to alleviate financial losses by transferring risk of loss from one entity to another. Ajit kumarwisdom IAS, New essay on merger of public sector banks Delhi. Insurance also has an element. Bank ownership, as it had earlier mentioned the freedom for banks in its working and bank autonomy, it felt that the government control over the banks in the form of management and ownership and bank autonomy does. In this sector, people get assured work, and the employment terms are fixed and regular.

Currently the capital adequacy ration for Indian banks is at 9 percent. A number of acts apply to the enterprises, schools and essay on merger of public sector banks hospitals covered under the organised sector. Positive effects of bank merger. They recommended that the government should assure that henceforth there won't be any nationalization and private and foreign banks should be allowed liberal entry in India. Interest Rate Structure : The committee found that the interest rate structure and rate of interest in India are highly regulated and controlled by the government. Banks were given a huge target of priority sector lending, etc. Secondly, banking policies may change, along with technological platforms, and that may not go down well with the total customer base, especially with long term and elderly customers, who often react emotionally to such changes. Unorganised Sector enterprises are not registered with the government and include a worker in the organized sector who is not covered by any of the Acts pertaining to welfare Schemes as mentioned in Schedule-II of Unorganized Workers Social Security Act, 2008. As far as recommendations regarding bank restructuring, management freedom, strengthening the regulation are concerned, the RBI has to play a major role. public transit, public education, along with health care and those working for the government itself, such as elected officials. New positions will also create jobs in the employment market as a whole. Directed Credit Programme : Since nationalization the government has encouraged the lending to agriculture and small-scale industries at a confessional rate of interest. It made banks handicapped in terms of building main strength and expanding credit supply.

Merger of, banks in India - Good or Bad?

Irrespective of the difficulties they pose, bank mergers are inevitable because the benefits far outweigh the risks. Employee discontentment, despite new positions being created, a considerable number of positions will be abolished with the merger, resulting in a huge number of people becoming redundant. The committee opined that these sectors have matured and thus do not need such financial support. Taken together, banks needed to maintain.5 percent of their resources idle with the RBI. Secondary sector includes those activities which result in the transformation of natural products into other forms by manufacturing; and includes construction. Narrow Banking, those days many public sector banks were facing a problem of the Non-performing assets (NPAs). Further, the multiple posts that exist in the three banks will have to be reconciled as there can be only one head of risk, treasury, credit, HR, etc. Similarly, the Cash Reserve Ratio- (CRR) was as high as 15 percent. Topic: General Studies 2, government policies and interventions for development in various sectors and issues arising out of their design and implementation. The committee focused on various areas such as capital adequacy, bank mergers, bank legislation, etc.

Bank of Baroda, the largest among the three with total business.3 lakh crore, is more than five times the size of Dena Bank the weakest of the three with business.73 lakh crore. This programme compelled banks to earmark then financial resources for the needy and essay on merger of public sector banks poor sectors at confessional rates of interest. Protection and support for the unorganised sector workers is very necessary for both economic and social development. Activities in the private sector are guided by the motive to earn profits. An unorganised worker is a home-based worker or a self-employed worker or a wage worker in the unorganized sector. It is a next step after the primary, where the product is not produced by nature but has to be made and therefore some process of manufacturing is essential; it could be in a factory, a workshop or at home. It submitted its report to the Government in April 1998 with the following recommendations. It is important to ensure that such mergers do not end up creating an entity that is weaker than the original pre-merger strong bank. The committee has given the following major recommendations. Technology integration putting all the three banks in the same platform; Systems and processes could be different and would have to be harmonised. Local banks should concentrate on region specific banking. Primary sector is a sector whereby the raw materials are extracted from the earth.

Challenges of, banking, sector, essay - 3168 Words Cram

Basically it deteriorated the quality of loan, resulted in a shift from the security oriented loan to purpose oriented. Because of this a second committee was again set up in 1998. All bank mergers will lead to multiplicity of branches and ATMs that will have to be reviewed. Primary Sector produces natural products like cotton, milk, fruits, wheat, fish, rubber etc. September 27, 2018, next post. The SLR then was.5 and CRR was. First of all, there is the trepidation about the security of money, especially in those days when cyber-crimes are rampant. Besides, with a merger, new positions will open up and further training will be provided, which will help the existing employees seize the opportunity of climbing up the success ladder. Negative effects of bank merger. Here, lets take a look at the advantages and disadvantages of a bank merger.

Comparative study between public and private sector banks

Hence the committee recommended eliminating government controls on interest rate and phasing out the concessional interest rates for the priority sector. Some of essay on merger of public sector banks them had NPAs were as high as 20 percent of their assets. With the trade unions of both banks coming into equal play with a merger, such domination is most likely to vanish, and the interests of the general public and all employees of the bank will be taken into account in its demands. It is better known as the Banking Sector Committee. Classification of economic activities on the basis of conditions of work is as under: Organised Sector is registered with the government. In order to remove them and make it more vibrant and efficient, it has given the following recommendations. This upgradation will bring them in line with the present needs of the banking sector in India.

Tags: merger of banks advantages and disadvantages. There would be redundancies of the same in the combined entity. The long-term solution outlined by Raghuram Rajan, former RBI Governor, mentioned in his note to the estimates committee of Parliament: Improve governance of public sector banks and distance them from the government and delegate appointments entirely. The Narsimham Committee was set up in order to study the problems of the Indian financial system and to suggest some recommendations for improvement in the efficiency and productivity of the financial institution. This directed credit programme was successful from the government's point of view but it affected commercial banks in a bad manner. Management issues, number of bank branches will certainly increase after a merger, which will make it all the more difficult for the head offices to regulate and monitor all activities. It was hindrance in the productivity of the bank thus the committee recommended their gradual reduction. This contribution of many is used to pay the losses suffered by unfortunate few. Additional Suggestions : Committee also suggested that the determination of interest rate should be on grounds of market forces. Indian Economy can be classified into various sectors on the basis of ownership, working conditions of the workers and the nature of the activity being performed. The committee recommended the establishment of an Asset Reconstruction Fund (ARF). Previous post, motivation FOR upsc mains 2018: Someone Amongst You, Reading This Write Up, Is Going to be Rank essay on merger of public sector banks 1 this Year!

Recommendations of, narasimham Committee on, banking, sector

The public sector might provide services that a non-payer cannot be excluded from (such as street lighting services which benefit all of society rather than just the essay on merger of public sector banks individual who uses the service. Banks must be prepared to lose some customers during such a transition. To get such services we have to pay money to these individuals and companies). General Studies 3, indian Economy Financial Inclusion and Inclusive Growth. SLR was recommended to reduce from.5 to 25 and CRR from 15 to 3. Private Sector is the part of the economy, sometimes referred to as the citizen sector, which is run by private individuals or groups, usually as a means of enterprise for profit, and is not controlled by the State. Insurance is basically a sharing device. Vijaya Bank, also smaller with business.8 lakh crore, is, however, a relatively healthy bank. Counter intuitively, if we are willing to change the way in which public sector institutions function by giving them autonomy along with accountability, we may not require such mergers. Sectors are the group of economic activities classified using some important criterion. The composition of the public sector varies by country, but in most countries the public sector includes such services as the military, police, infrastructure (public roads, bridges, tunnels, water supply, sewers, electrical grids, telecommunications, etc. Dena also faces certain operational restrictions as it is currently under the Reserve Bank of Indias prompt corrective action framework after a rise in NPAs resulted in the lenders return on assets turning negative.

Concentration also means lesser competition and less choice for customers. They also found that government used bank funds at a cheap rate under the SLR. Along with these major problem areas. Higher savings, as discussed before, will also lead to the scope of utilizing that money in improvement of the infrastructure and training and development of employees. Reduction in the SLR and CRR. However the basic principle is that loss should occur as a result of natural calamities or unexpected events which are beyond the human control. It is up to the banks to stay strong and engage better HR personnel and core banking staff to ensure that the difficult times are tided over smoothly. Naturally, this will mean higher profits for the banks. The determination of the interest rate should be on the grounds of market forces such as the demand for and the supply of fund. Thus for successful rehabilitation of these banks it recommended 'Narrow Banking Concept' where weak banks will be allowed to place their funds only essay on merger of public sector banks in short term and risk free assets. In News: State-owned Bank of Baroda, Vijaya Bank and Dena Bank will be merged to create the countrys third largest lender as part of efforts to revive credit and economic growth.

essay on merger of public sector banks

Free Informative, essay, sample on topic Regulation of, banks

Mergers also take place as the final resort to keep a financial institution from going under. This sector is also known as the service sector. Besides, with staff from all participating banks coming under the same banner, there will be surplus staff at many branches, which will lead to transfers in previously understaffed branches, usually in remote locations. If the major recommendations of this committee are accepted, it will prove to be fruitful in making Indian banks more profitable and efficient. Structural Reorganizations of the Banking sector. It would help banks to get rid of bad debts. In 1998 the government appointed yet another committee under the chairmanship. Psu bank merger news. Free, essay : Article on, indian Banking, sector : The challenges that the banking sector in India faces It is by now well recognized that India is one of the. Impact of, derivatives trading on emerging capital market importance of customers in mergers acquisition importance of micro finance in developing economy merger acquisition conceptual framework merger acquisition avoiding path. The Narasimham committee on banking sector reforms plays a vital role in the growth and the committee was made for 2 times once.

The restructuring and privatisation of banks. Read through the list below. More importantly, with the development of the technologies, such harassment can run on and on any place your child goes and can happen 24 hours a day, seven days a week. Your hook is a first sentence that draws the reader. What are the known facts? Doing your research before you begin writing your essay will make the writing process go smoothly. Persuasive essays are short, around five to six paragraphs. Keep in touch with us: Reset Contrast, high Contrast, a-Z Site Map, non-Discrimination Policy. In other essays, you can have as many paragraphs as you need to make your argument. While the focus is mainly on your side, there is also a discussion regarding the opposing side that goes far beyond a single sentence or a paragraph.

Topics in Banking & Finance for Rbi Grade

The Daily Show Frankfurt, Harry. The novel was later made into a film by Steven Spielberg. All banks, big and small, aim. Find 2008 Financial Crisis example essays, research papers, term papers, case studies or speeches. If you've planned ahead, this won't be hard. Come browse our large digital warehouse of free sample essays. As children grow and spend more time at school, parents are often afraid of them to fall into bad associations. Essay, topics for upcoming RBI Grade B exams. An argumentative essay is a paper that gets the reader to recognize the authors side of the argument as valid. Several emotions rushed through my veins.

Get the knowledge you need in order to pass your classes and more. Whenever possible, start early. The district began essay on merger of public sector banks operations under the Peralta name on July 1, 1964. While there youre matched with both outstanding academics and sports teams. Argumentative essays are assigned to train your debating abilities.

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Dynamics OF Market Structure 125 in the banking sector being fuzzy. To examine the quality, ask: Who is affected by this problem? See All Poway Unified School District Rankings. Introduction The 2008 financial crisis led to a sharp inc. According to state test scores, 66 of students are at least proficient in math and 74 in reading. Note in lieu of the nal decision. In this lesson we have discussed about category wise Important Essay Topics which can be asked in Upcoming RBI Exams. Perspective 1 The government has no place in the arts because the government is not qualified to judge which projects should receive funding and which should not. We need to ask ourselves, however, if we're willing to challenge the status quo to get those results. But there are potential and more dangerous threats the Internet is linked to that we need to protect our children from. Before You Write, its important that you plan your essay out before you write, and that includes several different aspects. While the new essay format is admittedly more complex than the earlier version, its still very predictable and you can do very well on it with the right preparation. Poway Unified School District ensures our safety through their multiple and friendly yard - duties.

Perspective 2 The federal government is too big to adequately address the needs of individual states and cities. Show more answers Ask a Question 200 characters left Include your email address to get a message when this question is answered. The more detailed the research conducted on each, the better the outcome of the piece will. "Communicate" your ideas, do not impose them by means of exaggeration. After many measurements and much debate, they cut and paste facility can you do so because you did. Free 800 words essay on bank Mergers: Advantages essay on merger of public sector banks AND Disadvantages for school and college students. Logical appeals such as presenting data, facts, and other types of hard evidence are often very convincing to readers. 2, try using stasis theory to help you examine the rhetorical situation.