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Eco Survey 2020: PSBs lost 23 paise for every ₹ invested

Jan 31, 2020 20:24 IST

The Economic Survey 2020 argued that after fifty years after bank nationalisation, govt-owned banks continue to play an important role in the economy, but are riddled with inefficiencies. According to the survey, over Rs 4,30,000 crore of taxpayer money is invested as government's equity in public sector banks. In 2019, every rupee of taxpayer money invested in PSBs, on average, lost 23 paise. On the other hand, every rupee of investor money invested in 'New Private Banks' or NPBs, that is banks licensed after India's 1991 liberalisation—on average gained 9.6 paise. The survey however stayed away from recommending privatisation or lower government shareholding in these banks. It has instead, suggested the use of fintech and stock-option based incentives to improve the functioning of these public-sector lenders.

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