INDIA INC PREFERS TO BANK WITH STATE OWNED BANKS (PSU)
A recent countrywide survey reveals that while private banks have got a tight grip on the purse strings of the salaried class and professionals in the country, a large majority of customers in Corporate India still prefer the time tested public sector banks for services ranging from securing credits cards to making bond investment and fixed deposits. Hereâ€™s the information thatâ€™s being seen as a wake-up call for private banks and a big boost for the much maligned state-owned banks.
According to a latest survey by Assochem 60% of businessmen in India prefer sector banks when it comes to sourcing credit cards and 80% of them knock on the doors of state owned banks for securing personal and educational loans.
The reasons are that these businessmen find PSU banks more reliable while the private sector banks seem messy with their difficult to comprehend offers, says the survey. It also points out that the business community feels that private banks charges high rates of interest and are very â€˜cleverâ€™ with customers.
The percentage of businessmen preferring insurance services of private banks is higher at 60% as compared to just 20% of PSU banks, but 80% of the businessmen prefer private banks for mutual fund services. When it comes to bonds and securities, their preferences shifts with 80% going in for public sector banks, the survey reveals. For fixed deposits too, 60% businessmen prefer PSU banks as compared to just 20% for private banks, while another 20% are indifferent between the two segments of bankers.
The scales, however, tilt largely in favor of private banks when it comes to the salaried class. While 60% of salaried employees pick PSU banks for services like insurance, personal loans and educational loans, private banks emerge their favorites for services like credit cards and debit cards.
The preference for public sector bank for insurance is mainly due to the general perception that they are more reliable, secure and trustworthy. But for credit and debit cards, they feel private banks provide prompt and efficient service as compared to the outdated services of PSU banks that lead to wastage of time and procedural delays. This despite the fact the PSU banks are found to be easily accessible and have a wide reach in rural areas a survey revealed.
Professionals surveyed have shown a higher liking for private banks for their day-to-day services, but for once in a while decisions like loans, insurance and mutual funds, they prefer PSU banks for being more reliable and trustworthy.