The State Bank of India recently published a study that concluded PSBs are more "efficient" than the private sector banks in India.
Efficiency here is reflected through the banks' ability to effectively utilize their resources.
It's a notion that flies in the face of general perception: public sector banks have performed far better than even private and foreign banks, said Soumya Kanti Ghosh, SBI Group Chief Economic Advisor.
The study also found that steps taken by the government and RBI to bring efficiency and productivity in banks have borne fruit.
The findings are an indication that generically, PSBs have been more efficient than private banks barring FY19-23. It attributes this fall in efficiency to mergers and rationalization of operations, branches and staff.
Even after facing multiple structural changes, PSBs have achieved an efficiency level of 82.8 percent. It is higher than the efficiency of all scheduled commercial banks at 81.2 percent, private banks at 79.6 percent, and foreign banks at 78.2 percent.
The Indian banking sector has shown remarkable resilience in the past decade to various shocks in the domestic and global economies, the report mentioned.
The restructuring process has, however, brought weaker banks into the fold of the acquiring public sector banks, affecting their efficiency and productivity.
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