Case StudyThe Public sector banks are witnessing a period of transitio

1.	Case StudyThe Public sector banks are witnessing a period of transition in India. They are at the cross roads, where they, without giving up social responsibilities should remain healthy. They need to undertake risky experiments, yet to perform innovatively. They should make forays into new areas which are rarely taken up by them and lose no emerging opportunities. It should also be understood that absence of any bad advance is not a good sign of an efficient banking system. It only indicates immense conservatism. However, there is no guarantee for profit. There should be a balance between liquidity and risk. Past sins should be forgiven. Novel and pragmatic techniques should be adopted without which banks would be in danger.(a) Describe the importance of Public Sector Banks at present.(b) What are the functions other than main and agency functions that should be performed by these banks to be socially responsible.(c) Our Public Sector Banks have a strong base. Do you think that they have to follow the foreign Commercial Banks in granting loans? Yes or No. Give reasons.
Answer» (a) 1. Fuller Employment: Only under socialised production will of the fullest possible employment to all adult workers, in accordance with the aptitude on each be secured. 2. Better Deal to Workers: Exploitation, job uncertainty and wretched conditions are to be replaced by just rates of pay, security of service and improved working conditions under state enterprise. 3. Greater Economy and Coordination: There is greater harmony and coordination among the various industries which are brought under or initiated under state control. 4. Assistance in economic Development: The surplus profit of nationalised undertaking can be used to finance schemes of national economic development. 5. Safety of Money: Money deposited in a bank remains safe. Precious articles too can be kept in the safe custody of bank in lockers. (b) 1. Issuing Credit Instruments: Banks issue letters of credit, drafts and travellers cheques to their customers. People can transfer funds from one place to another without carrying currency notes with them. 2. Underwriting Capital Issues: Banks underwrite the shares and debentures issued by companies. 3. Safe Custody of Valuables: Banks accept jewellery, documents and other valuables for safe-keeping. 4. Advice and Information: Banks offer advice on financial matters. They provide information about credit worthiness of customers to enable them to obtain credit facility from suppliers. (c) No, there is no guarantee for profit. There should be a balance between liquidity and risk. Past sins should be forgiven. Novel and pragmatic techni-ques should be adopted without which banks would be in danger.

Case StudyThe Public sector banks are witnessing a period of transition in India. They are at the cross roads, where they, without giving up social responsibilities should remain healthy. They need to undertake risky experiments, yet to perform innovatively. They should make forays into new areas which are rarely taken up by them and lose no emerging opportunities. It should also be understood that absence of any bad advance is not a good sign of an efficient banking system. It only indicates immense conservatism. However, there is no guarantee for profit. There should be a balance between liquidity and risk. Past sins should be forgiven. Novel and pragmatic techniques should be adopted without which banks would be in danger.(a) Describe the importance of Public Sector Banks at present.(b) What are the functions other than main and agency functions that should be performed by these banks to be socially responsible.(c) Our Public Sector Banks have a strong base. Do you think that they have to follow the foreign Commercial Banks in granting loans? Yes or No. Give reasons.

Answer»

(a)

1. Fuller Employment: Only under socialised production will of the fullest possible employment to all adult workers, in accordance with the aptitude on each be secured.

2. Better Deal to Workers: Exploitation, job uncertainty and wretched conditions are to be replaced by just rates of pay, security of service and improved working conditions under state enterprise.

3. Greater Economy and Coordination: There is greater harmony and coordination among the various industries which are brought under or initiated under state control.

4. Assistance in economic Development: The surplus profit of nationalised undertaking can be used to finance schemes of national economic development.

5. Safety of Money: Money deposited in a bank remains safe. Precious articles too can be kept in the safe custody of bank in lockers.

(b)

1. Issuing Credit Instruments: Banks issue letters of credit, drafts and travellers cheques to their customers. People can transfer funds from one place to another without carrying currency notes with them.

2. Underwriting Capital Issues: Banks underwrite the shares and debentures issued by companies.

3. Safe Custody of Valuables: Banks accept jewellery, documents and other valuables for safe-keeping.

4. Advice and Information: Banks offer advice on financial matters. They provide information about credit worthiness of customers to enable them to obtain credit facility from suppliers.

(c) No, there is no guarantee for profit. There should be a balance between liquidity and risk. Past sins should be forgiven. Novel and pragmatic techni-ques should be adopted without which banks would be in danger.

Discussion

No Comment Found

Related InterviewSolutions

Reply to Comment