LL.M Dissertation: A Comparative Study of Banks in India-2022-23

This LL.M dissertation provides a detailed comparative analysis of public and private sector banks in India. It begins with an introduction to the banking system, including the role of the Reserve Bank of India and the different types of banks. The dissertation then delves into the history, organizational structure, objectives, and major players in both the public and private sectors. It examines the challenges faced by each sector, their future prospects, and a comparative analysis of key differences, including non-performing assets (NPAs). The study utilizes various research methodologies and data analysis techniques to provide a comprehensive overview of the banking landscape in India, submitted to Dr. B.R. Ambedkar Law University, Jaipur.

A COMPARATIVE ANALYSIS OF THE PUBLIC AND PRIVATE SECTOR BANK IN
INDIA
A Dissertation
Submitted to
Dr. B.R. Ambedkar Law University, Jaipur
In Partial Fulfillment of the Requirement
Prescribed for the LL.M II Year Examination
2022-2023 (BRANCH: CORPORATE AND
COMMERCIAL LAWS)
By
DIVYANSH MISHRA
Roll Number: ……………
St. Wilfred’s College of Law, Jaipur
Under the Supervision of
Mr. Babulal Chaudhary
Assistant Professor
St. Wilfred’s College of Law, Jaipur
DR. B.R. AMBEDKAR LAW UNIVERSITY,
JAIPUR 2023
1

CERTIFICATE
This is to certify that Mr. DIVYANSH MISHRA has worked under my supervision and
guidance. The work contained in this dissertation titled “A comparative analysis of the
public and private sector bank in India” is original and has not been submitted in part
or in full or any other degree either in this University or any other University previously
by the candidate. I am satisfied that this research work is worthy of consideration for the
award of the Degree of Master of Laws and has been compiled with the Guidelines issued
by the competent authorities from time to time.
Place: Jaipur, Rajasthan Mr. Babulal Chaudhary
Date: ………… Supervisor
2

ACKNOWLEDGEMENT
With reference and profound gratitude, I acknowledge the inspiring guidance given
by my esteemed Mr. Babulal Chaudhary, Vice- Principal, St. Wilfred’s College of Law,
and Jaipur. Indeed, his qualities of balance and restraint have a profound and ever lasting
impact on his disciples. Thus, it has been a great privilege and pleasure to have carried out
this dissertation under such an honorable guide.
I am deeply indebted to all the Indian and Foreign writers and judges whose
writings and decisions have been duly cited in this work and have given me inspiration
and light for preparing this work. I acknowledge my gratitude to those authors also whose
work, though might not have been cited in this dissertation, and helped me in formulating
my views and enriching my thoughts.
I would like to express my deepest gratitude to Hon’ble Vice Chancellor and
Registrar Dr .B.R Ambedkar Law University, Registrar. I respectfully acknowledge their
role whose juristic acumen ship in the field of cyber-crime shaped my ideas enabled me to
appraise the nuances of research proposal.
I am very thankful to college Principal Dr. Sushma Gour, St. Wilfred’s College of
Law, Jaipur for give me the ablest suggestions and personal care in accomplishing and
presenting dissertation in the present form.
I am also thankful to other Associate Professor and Assistant Professors, Faculty of
Law, St. Wilfred’s of Law, Jaipur for their valuable guidance and inspiring me to
complete this project. I also take this opportunity to express my sense of gratitude to the
library staff of the Dr.
B.R Ambedkar Law University, Jaipur & St. Wilfred’s College of Law, Jaipur for
providing me necessary reading and reference material as and when it was needed.
I am also very grateful to my mother, father and friends who provided me facilities
for this study and also encouraged me to go for higher education in law.
Place: Jaipur, Rajasthan DIVYANSH MISHRA
Date: ……..... LL.M. Student
St. Wilfred’s College of Law, Jaipur
Affiliated to Dr. B.R. Ambedkar Law University, Jaipur
3

DECLARATION
I Divyansh Mishra hereby declare that this dissertation “A comparative analysis
of the public and private sector bank in India” is based on the original research work
carried out by me under the guidance and supervision of Mr. Babulal Chaudhary, Vice-
Principal, St. Wilfred’s College of Law, Jaipur for the fulfillment of the requirements of
the degree of Master of Laws in post graduate stream of the law and has been compiled
with the Guidelines issued by the competent authorities from time to time including but
not limited to this University as well.
The interpretations put forth are based on my reading and understanding of the
original texts and they are not published anywhere in the form of books, monographs or
articles. The books, articles and websites etc. which have been relied upon by me have
been duly acknowledged at the respective places in the text.
For the present dissertation which I am submitting to the University, no Degree or
Diploma has been conferred on my before, either in this or in any other University.
Place: Jaipur, Rajasthan DIVYANSH MISHRA
Date: ………….. LL.M. Student
St. Wilfred’s College of Law Jaipur
Affiliated to Dr. B.R. Ambedkar Law
University, Jaipur
4

TABLE OF CONTENTS
S.NO. TITLE PAGE NO.
1 Certificate 2
2 Acknowledgement 3
3 Declaration 4
4 List of Abbreviations 8
5 List of legislations 15
6 List of cases 17
7 Preface 20
Chapter 1: Introduction 21-29
1.1 Introduction 21
1.2 Review of literature 24
1.3 Research methodology 26
1.4 Statement of the problem 26
1.5 Rationale of the study 26
1.6 Objective of the study 27
1.7 Data collection and analysis 27
1.8 Time period of study 29
Chapter 2: Reserve Bank of India 30-32
2.1 Reserve Bank of India 30
2.2
Role and functions of reserve bank of India
30
2.3 How Reserve Bank of India regulates public and
private sector banks
32
5

Chapter 3: Banking system in India 36-42
3.1
Types of banks in India
36
3.2
Types of banks on the basis of function
41
3.3
Structure of Banking System
42
Chapter 4: Public sector banks 45-54
4.1
Public sector banks in India
45
4.2
History of public sector banks in India
46
4.3
Organizational Structure of public sector banks in
India
48
4.4
Objectives of public sector banks in India
51
4.5 Major public sector banks in India 54
Chapter 5: Private sector banks 68-77
5.1
Private sector banks in India
68
5.2
History of private sector banks in India
69
5.3
Organizational Structure of private sector banks in
India
71
5.4
Objectives of private sector banks in India
74
5.5 Major private sector banks in India 77
Chapter 6: Challenges and future of public and private sector banks in India 90-95
6

6.1
Challenges to public sector banks in India
90
6.2 Challenges to private sector banks in India 92
6.3 Future of public sector banks 93
6.4 Future of private sector banks 95
Chapter 7: Comparative analysis 98-107
7.1
Difference between public and private sector banks
in India
98
7.2
Comparative analysis between public and private
sector bank
100
7.3 NPA of public sector banks 105
7.4 NPA of private sector banks 107
Chapter 8: BIBLIOGRAPHY 109
LIST OF ABBREVIATIONS
7

ACF Auto Correlation Function
AD Authorized Dealer
ADB Asian Development Bank
ADR American Depository Receipt
AFS Annual Financial Statement
AIRCSC All India Rural Credit Survey Committee
ASSOCHAM Associated Chambers of Commerce and
Industry of India
BIS Bank for International Settlements
BoP Balance of Payments
BSCS Basel Committee of Banking Supervision
BSR Basic Statistical Returns
CAD Capital Account Deficit
CAG Controller and Auditor General of India
CC Cash Credit
CD Certificate of Deposit
CR Ratio Credit Deposit Ratio
CF Company Finance
CFRA Combined Finance and Revenue Accounts
CGRA Currency and Gold Revaluation Account
CII Confederation of Indian Industry
CO Capital Outlay
CP Commercial Paper
CPI Consumer Price Index
CR Capital Receipts
8

CRAR Capital to Risk-Weighted Asset Ratio
CRR Cash Reserve Ratio
CVC Central Vigilance Commission
DBOD Department of Banking Operations and
Development
DCB Demand Collection and Balance
DCCB District Central Co-operative Bank
DCM, RBI Department of Currency Management, RBI
DD Demand Draft
DEIO Department of External Investments and
Operations
DGCI&S Directorate General of Commercial
Intelligence and Statistics
DI Direct Investments
DICGC Deposit Insurance and Credit Guarantee
Corporation of India
DID Discharge of Internal Debt
DMA Departmentalized Ministries Account
DRI Differential Rate of Interest Scheme
DSBB Dissemination Standards Bulletin Board
DVP Delivery Versus Payment
ECB External Commercial Borrowing
ECB European Central Bank
ECGC Export Credit and Guarantee Corporation
ECS Electronic Clearing Scheme
EDMU External Debt Management Unit
9

EEA Exchange Equalization Account
EEC European Economic Community
EEFC Exchange Earners Foreign Currency
EFR Exchange Fluctuation Reserve
EXIM Bank Export Import Bank of India
FCA Foreign Currency Assets
FCCB Foreign Currency Convertible Bond
FCNRB(B) Foreign Currency Non- resident (Banks)
FCNRA Foreign Currency Non Resident Account
FCNRD Foreign Currency Non Repatriable Deposit
FDI Foreign Direct Investment
FEMA Foreign Exchange Management Act
FI Financial Institution
FICCI Federation of Indian Chambers of Commerce
and Industry
FII Foreign Institutional Investor
FIMMDA Fixed Income Money Market and Derivatives
Association of India
FISIM Financial Intermediation Services Indirectly
Measured
FLAS Foreign Liabilities and Assets Survey
FOF Flow of Funds
FPI Foreign Portfolio Investment
FRA Forward Rate Agreement
FRN Floating Rate Note
GDP Gross Domestic Product
10

GDR Global Depository Receipt
G-Sec Government Securities
IBRD International Bank for Reconstruction and
Development
IDRBT Institute for Development and Research in
Banking Technology
IEPF Investors Education and Protection Fund
IFSC Indian Financial System Code
IFC Indian Financial Corporation
IFCI Industrial Finance Corporation of India
IIBF International Institute of Banking and Finance
IIBI Industrial Investment Bank of India
IFC International Finance Corporation
IFR Investment Fluctuation Reserve
IIP Index of Industrial Production
IMF International Monetary Fund
IP Interest Payment
ISDA International Swaps and Derivative
Association
ISO International Standards Organisation
KYC Know Your Customer
KVP Kisan Vikas Patra
KVIC Khadi and Village Industries Corporation
LAF Liquidity Adjustment Facility
LAS Loans and Advances by States
11

LDB Land Development Bank
LERMS Liberalized Exchange Rate Management
System
M1 Narrow Money
M3 Broad Money
MA Moving Average
MCA Ministry of Corporate Affairs
MIGA Multilateral Investment Guarantee Agency
MSS Market Stabilization Scheme
NABARD National Bank for Agriculture and Rural
Development
NBFC Non Banking Financial Companies
NEC Not Elsewhere Classified
NEER Nominal Effective Exchange Rate
NFA Non Foreign Exchange Assets
NFD Net Fiscal Deficit
NHB National Housing Bank
NIF Note Issuance Facility
NPA Non Performing Assets
NPV Net Present Value
NSSF National Small Savings Fund
OD Overdraft
OECD Organisation for Economic Cooperation and
Development
OLTAS Online Tax Accounting System
12