A Comparative Analysis of the Financial Performance of Chosen Public and Private Sector Banks in India

Abstract

Banks play a crucial role in the financial system and are key participants in financial markets. An effective banking system, capable of mobilizing savings and directing them towards productive ends, is vital for the growth of any economy. This study aims to examine and compare the overall financial performance of selected public and private sector banks in India. The research relies on secondary data sourced from the annual reports of the respective banks and the Reserve Bank of India website. The study covers a five-year period from the financial year 2011-2012 to 2015-2016. A quota sampling method was employed to select ten banks, comprising five from the public sector and five from the private sector, based on their highest market capitalization during 2015-2016. Data analysis utilized T-tests, means, and graphical representations. While both sectors experienced increased profitability, private sector banks demonstrated a higher rate of growth. Public sector banks lag behind in various financial parameters and face numerous challenges. It is concluded that public sector banks must redefine their strategies by evaluating their strengths and weaknesses and considering the market environments in which they operate.