What are Public Sector Banks?

Public Sector Banks are the banks whose majority of stakes are held by the state or central government. The government is responsible for formulating all the financial guidelines for these banks. These banks work under the government and thus they are trustworthy. Public sector banks work for the benefit of people by introducing new schemes from time to time and also charge less for their services. The charges on loans are also less as compared to private sector banks. The biggest public sector bank in India is the State Bank of India.

Some of the advantages of public sector banks include:

• Low-interest charges on loans
• High-interest rate on deposits
• Full job security for employees
• Offers its services to a large customer base
• Offers financial services through multiple branches
• Offers its services to the rural areas too

The banking industry has been the backbone of our country’s financial sector. Banks play an important role in the overall economic growth of the country. Public Sector Banks and Private Sector Banks are two of the three types of Commercial Banks (the third being Foreign Banks).