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Resource centre on India's rural distress
 
 

RBI Bulletin: A big bang approach to PSB privatisation may do more harm than good

-Moneycontrol.com

The study also suggests that market confidence tends to be in favour of PSBs in terms of crisis.

The latest Reserve Bank of India (RBI) bulletin published on August 18 suggests that a big bang approach to privatisation of government-owned banks may do more harm than good.

A paper published in the bulletin analyses various pros and cons of privatisation and identifies how an emerging economy like India may face more challenges due to the privatisation of banks.

Some of the major reasons as identified by the RBI paper that show PSBs can serve the country better than private banks include better financial inclusion, better credit system, and better efficiency of the PSBs.

The paper highlighted that the private banks have failed to cater to the customers of the rural and semi-urban areas to date and customers from such locations are relying heavily on PSBs for banking.

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