Nifty99000 100%

Sensex99000 100%

Article rating: 4.0
Article rating: 3.7
Article rating: 5.0
Article rating: 4.0
Article rating: 4.5
Article rating: 3.8
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
RSS

News

Nandan Nilekani bats for privatisation of PSBs

Author: IANS/Wednesday, March 21, 2018/Categories: Banking & Financial Services

Nandan Nilekani bats for privatisation of PSBs

By Vishav 

Mumbai, March 20 - Public sector banks should be privatised now when they dominate the market share before their value is eroded by "creeping privatisation", Infosys Chairman and the architect of Aadhaar Nandan Nilekani said on March 20.

He said the choice is obvious because it's a choice between privatisation -- which would benefit the taxpayer and the state -- and a creeping privatisation.

Nilekani said the pace at which the public sector banks are losing market share has been estimated by to be 4%  a year.

"Today, the market share of public sector banks is 70 per cent. So in 10 years, this share is going to become very small and may eventually be reduced to something like 10%," Nilekani said..

He said this happened in the telecom sector as well where the big four telecom companies - all private - dominate, and BSNL is a small player.

"It's also happening in airlines where they are now talking about privatisation of Air India.

"So rather than to wait for that situation to arise while the public sector banks still dominate the market share, I feel it's a good idea to let them be free and owned by public," Nilekani said.

He added that another reason for public sector banks to be privatised is the increasing role technology is playing in the banking sector.

"Technology has now become so critical to business success in banks. Getting this technology right is a very complex task which requires huge talent which may be a challenge in public sector banks," he said.

"So all the more reason why they should be privatised so the tax payer gets some value upside out of that."

Head of the Kotak Mahindra Bank Uday Kotak added while the public sector banks hold the major share of the market, the growth in the banking sector is now dominated by private players.

"In the next five years, the 70-30 ratio of public and private banks will move to 50-50 ratio," Kotak said.

This means a 4% increase in the market share per year compared to 1% per year currently.

Kotak said this huge jump in the market share will be driven by digital technology, Aadhaar based electronic KYC (Know your customer) and data driven lending.

"Aadhaar is not just for last mile payments but will change the face of finance. KYC through Aadhaar is the future of where finance will go," he said.

Nilekani said that Unified Payments Interface (UPI) is going to be another game-changer and by December this year, UPI transactions will cross one billion mark making it the largest payment system in the country.

Print Rate this article:
No rating

Number of views (148)/Comments (0)

Kavita Giridhar Mallya

IANS

Other posts by IANS
Contact author

Leave a comment

Name:
Email:
Comment:
Add comment

Name:
Email:
Subject:
Message:
x

Videos

Ask the Finapolis.

I'm not a robot
 
Dharmendra Satpathy
Col. Sanjeev Govila (retd)
Hum Fauji Investments
 
The Finapolis' expert answers your queries on investments, taxation and personal finance. Want advice? Submit your Question above
Want to Invest
 
 

Categories

Disclaimer

The technical studies / analysis discussed here can be at odds with our fundamental views / analysis. The information and views presented in this report are prepared by Karvy Consultants Limited. The information contained herein is based on our analysis and upon sources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and we are not responsible for any loss incurred based upon it. The investments discussed or recommended in this report may not be suitable for all investors. Investors must make their own investment decisions based on their specific investment objectives and financial position and using such independent advice, as they believe necessary. While acting upon any information or analysis mentioned in this report, investors may please note that neither Karvy nor Karvy Consultants nor any person connected with any associate companies of Karvy accepts any liability arising from the use of this information and views mentioned in this document. The author, directors and other employees of Karvy and its affiliates may hold long or short positions in the above mentioned companies from time to time. Every employee of Karvy and its associate companies is required to disclose his/her individual stock holdings and details of trades, if any, that they undertake. The team rendering corporate analysis and investment recommendations are restricted in purchasing/selling of shares or other securities till such a time this recommendation has either been displayed or has been forwarded to clients of Karvy. All employees are further restricted to place orders only through Karvy Consultants Ltd. This report is intended for a restricted audience and we are not soliciting any action based on it. Neither the information nor any opinion expressed herein constitutes an offer or an invitation to make an offer, to buy or sell any securities, or any options, futures or other derivatives related to such securities.

Subscribe For Free

Get the e-paper free