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A small comparison between Private and Govt Sector bank taking Gross NPA as a base.
If we consider sector wise comparison based on wtd. Avg. method for NPA Ratio then Public Sector banks are 3 time higher than Pvt. Sectors Banks.
Although loan sanctioning process of Pvt. banks is very faster then govt. bank but internal policies to sanctioning loan is more stronger then Govt. banks.
It's kind of very simple to get loan from Public sectors banks by submitting fake documents or enhancing value for mortgage for higher loan and showing fake audited stock for CC loan and no worried to repay such loan or repay loan using loan money.
RBI has merged many SICK govt. banks into others but the internal structure for sanctioning loan is still same.
I have done many bank audit and observed there are many loopholes of Public sector banks, Mostly Credit manager relying on the paper documents submitted by Loan applicant.
Govt. banks won't consider the actual existence of such information, general public misused this loopholes badly.
On the other side Private sectors are too active to sanctioning loan and collect interest on time.
If we consider sector wise comparison based on wtd. Avg. method for NPA Ratio then Public Sector banks are 3 time higher than Pvt. Sectors Banks.
Although loan sanctioning process of Pvt. banks is very faster then govt. bank but internal policies to sanctioning loan is more stronger then Govt. banks.
It's kind of very simple to get loan from Public sectors banks by submitting fake documents or enhancing value for mortgage for higher loan and showing fake audited stock for CC loan and no worried to repay such loan or repay loan using loan money.
RBI has merged many SICK govt. banks into others but the internal structure for sanctioning loan is still same.
I have done many bank audit and observed there are many loopholes of Public sector banks, Mostly Credit manager relying on the paper documents submitted by Loan applicant.
Govt. banks won't consider the actual existence of such information, general public misused this loopholes badly.
On the other side Private sectors are too active to sanctioning loan and collect interest on time.
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