Nationalised Banks in India

Here is the list of the 12 Nationalised banks: 

1. Bank of Baroda 

1. Bank of India 

1. Bank of Maharashtra 

1. Canara Bank (With Merger of Syndicate Bank) 

1. Central Bank of India 

1. Indian Bank (With Merger of Allahabad Bank) 

1. Indian Overseas Bank 

1. Punjab & Sind Bank 

1. Punjab National Bank (With Merger of Oriental Bank of Commerce and United Bank of India) 

1. State Bank of India 

1. UCO Bank 

1. Union Bank of India (With the Merger of Andhra Bank and Corporation Bank) 

Difference Between Nationalised and Private Banks

Advantages of Nationalised Banks in India

Public sector banks, often referred to as government banks, offer several advantages that benefit both customers and the nation as a whole: 

1. Competitive Interest Rates on Deposits: Public sector banks typically provide depositors with attractive interest rates on their savings and fixed deposits. This encourages people to save and earn a reasonable return on their savings. 
2. Low-Interest Rate Loans: Government banks offer loans at competitive interest rates, making it affordable for individuals, businesses, and entrepreneurs to access credit. This helps stimulate economic growth and development. 
3. Wide Customer Reach: Public sector banks have a substantial customer base, allowing them to serve a diverse range of customers, including individuals, small businesses, and large corporations. This widespread customer reach contributes to the financial inclusion of various segments of society. 
4. Rural Banking Services: Government banks play a crucial role in providing banking services to rural and underserved areas. They establish branches in remote regions, helping rural populations access banking facilities, credit, and financial services, thereby promoting rural development. 

1. Extensive Branch Network: Public sector banks typically maintain an extensive network of branches across the country. This network ensures that banking services are accessible to people in both urban and rural areas, contributing to the economic growth and stability of the nation. 
2. Job Security for Employees: Employees working in public sector banks enjoy a high level of job security. This stability is important for the livelihoods and well-being of bank staff and their families.  
3. Pension Benefits: Public sector bank employees are eligible for pension benefits upon retirement. This ensures financial security and a source of income for retired employees, contributing to their well-being in their post-employment years. 

Disadvantages of Nationalised Banks in India

Public sector banks, while offering certain advantages, also have their share of disadvantages: 

1. Service Complaints: Many customers have voiced complaints about unsatisfactory service provided by staff in some public sector banks. These complaints may range from delays in processing transactions to irresponsiveness to customer inquiries. 
2. Corruption Scandals: Several major corruption scandals have tainted the reputation of public sector banks. These scandals can erode public trust and confidence in the banking sector and the government's oversight of these institutions. 
3. High Default Rates: Public sector banks often face higher rates of customer loan defaults compared to their private sector counterparts. This can result in a significant burden of non-performing assets (NPAs), affecting the bank's profitability and financial stability. 
4. Costly Financial Activities: Public sector banks may spend a substantial amount of money on various financial activities, including compliance, paperwork, and administrative overhead. This expenditure can reduce their efficiency and profitability. 
5. Bureaucratic Structure: Public sector banks often have a substantial bureaucratic structure at the managerial level. This can lead to slow decision-making processes and hinder the bank's ability to adapt quickly to changing market conditions and customer needs. 

1. Slow Decision-Making: Due to the bureaucratic nature of public sector banks, they may struggle to make significant financial decisions swiftly. This can be a drawback in a dynamic and rapidly evolving financial environment where timely decisions are crucial. 
2. Limited Individualized Service: Public sector banks may provide less personalized or individualized service to customers compared to private sector banks. Customers may feel that their specific needs and preferences are not adequately addressed. 

Role of Payment Banks in Indian Banking System

In addition to the traditional banking institutions in India, Payment Banks represent a novel banking model introduced and regulated by the Reserve Bank of India (RBI). These specialized banks are unique in that they are not authorized to issue credit. Instead, their primary focus lies in facilitating digital transactions and providing basic banking services. Payment Banks are allowed to accept restricted deposits, currently limited to Rs.200,000 per customer, with the potential for this limit to be increased in the future. However, they are prohibited from offering loans or credit card services. Payment Banks are permitted to operate both current accounts and savings accounts. 

These Payment Banks play a significant role in promoting digital financial inclusion and offering essential banking services to a wide range of customers in India. 

Here is a list of Payment Banks in India: