The Hindu Business Line : Public sector banks losing market share to pvt peers

The combined market share of the State Bank of India, its associates and other public sector banks in bank deposits fell by 8 percentage points between June 2001 and June 2006; from 82 per cent to 74 per cent.

Deposits of all banks (other than RRBs) more than doubled over this period, from Rs 9,30,000 crore to Rs 21,01,000 crore. If SBI, its associates and other public sector banks had not lost so much ground, their deposits in 2006 would have been Rs 1,73,000 crore larger than they actually were.

Private sector banks were the beneficiaries. Their share in total deposits went up 8 per cent.

Though public sector banks managed to hold on to their market share in total advances, SBI and its associates lost 8 percentage points. Their loss, and the one percentage point lost by foreign banks, was the private sector's gain.

It could be argued that the fall in the State Bank group's share in advances was the result of a deliberate decision to put their money in investments rather than advances.

But now that this option has pretty much played itself out, the group might have difficulty regaining lost ground.

As T.S. Eliot put it, "after all the tea and cake and ices, will I still have the strength to force the moment to its crisis?"

More Stories on : Fixed Deposits | Public Sector Banks | Market Shares | Private Banks

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