Private banks lose people's trust, while public sector banks gain

The Covid-19 pandemic and the subsequent lockdown has truly tested the preference of people for the banking system that provides safety for their savings with good service and better returns. In this regard, an IANS C-Voter Economic Battery Wave survey shows that public sector banks have got a thumbs-up of majority of account holders who feel that their hard-earned money is safe there in comparison to private sector banks.

Private banks seem to be out of favour for the general public as account holders from across age and income groups, residing both in rural and urban areas, largely said that their trust on these banks have come down.

Even cooperative banks fared better in terms of the trust factor compared to the private lenders, the survey with a sample size of 1,200 showed.

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Around 12.7 per cent of the people aged above 60 years, who currently hold accounts in private banks, want to shift their accounts, out of which 12 per cent want to shift to cooperative banks and the rest 0.7 per cent are willing to shift to public banks.

Among the middle-aged (45-60 years) people, 5.1 per cent people want to shut their accounts in private banks. Out of this 5.1 per cent, 3.8 per cent want to move to a state-run bank and the rest 1.3 per cent would rather open an account in a cooperative bank.

Similarly, those in the age groups of below 25 years and 25-45 years also plan to shift out of the private banks to PSBs or cooperative banks.

In the urban areas, 7.5 per cent account holders want to shift from private sector banks. The survey shows that around equal number of them want to move to a PSB or a cooperative bank.

In the semi-urban areas, more people want to move their accounts to cooperative banks while those in the rural areas want to go for a public sector lender.

The survey carried out during the nationwide lockdown showed that the trust among the people for private banks is very low compared to that for public sector banks.

There may be several reasons for the same, ranging from the reach of the PSBs to every corner of the country with more number of branches compared to the private banks, to the confidence in a government-run entity. Further, several surveys and reports have also indicated that PSBs have been more helpful in terms of loan moratoriums announced by the Reserve Bank of India.

Also, in providing collateral-free loans to the needy and eligible entities under the `Aatmanirbhar Bharat` package, the state-run banks have been the frontrunners, which also helped them gain more trust and goodwill.