A Study on Revival of Weak Public Sector Banks

Ever since the economic reforms have begun in India in early ‘90s, the banking sector in India has made a tremendous progress and has come a long way since then. Unarguably, banks are the most important part of a country’s financial system. In India, till ’90s the banking sector was dominated by public sector and with the emergence of new sets of norms in the post-’90s, the PSU banks found it hard to cope with the dynamic industry changes. This posed a serious threat to the public sector banks. Some banks even turned negative. To give a helping hand to the loss-making PSU banks, Government of India appointed a Working Group under M S Varma, to help the public sector banks to transform them into profit-making. It is exactly five years since the report was submitted and it seems the objective of the committee was well served as all the three loss-making banks turned positive. The present paper is a study on those three loss-making banks performance in the last five years (post restructuring period) and also the paper emphasizes on the strategies adopted by each of these three banks in the process of restructuring.