What are the drawbacks of Indian banking sector?

Answer 1

DRAWBACKS OF INDIAN BANKING SYSTEM:

Indian banking system has achieved a remarkable all round growth during the last 20 years. But there remain some inherent weakness and short comings and efforts should be made to overcome them as early as possible. Some of the weaker points of Indian banking system are as follows:

1. First and foremost important weakness is the poor capital base.

2.Ineffective and inefficient organisational structure.

3.Institutional overlapping of different financial agencies in rural areas.

4. The service to the customer is becoming more and more impersonal, indifferent and inefficient. The extent of corruption among bank employees is also on the increase.

5. An unfortunate trend of declining profitability in Indian banks is noticeable in recent years.

6. One of the most important problems faced by banks in India in recent years is the problem of recovery of loans. The rate of recovery in some areas of the country and some types of loans have ranged between 40 to 50% which is not good sign of banking development.