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Compare Public and Private Sector Banks in India

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The following table clearly enumerates the differences between the public and the private sector banks in India

Criterion	Meaning	Public Sector Banks	Private Sector Banks
Control Status	Regulating Authority	Regulated by the Union Government	Regulated by a private individual or, an enterprise
Structure	Pattern of Shareholding	Public sector banks are those in which the state or, the central governments own more than 50% of the stock.	Banks classified as private sector banks are those in which private businesses or individuals control the majority of the stock.
Registration	Law or, the Governing Act	By passing laws in the parliament, public sector banks are established. Examples include the 1959 State Bank of India (Subsidiary Banks) Act and the Bank Nationalization Act (1970, 1980)	Within the Indian Companies Act, private sector banks are registered.
Control	Regulating Body	The Reserve Bank of India (RBI) has the authority to issue rules, regulations, instructions, and guidelines under the Reserve Bank of India Act, 1934 (RBI Act).	The Reserve Bank of India (RBI) publishes laws, ordinances, rules, and regulations.
FDI	Foreign Direct Investment	In Public Sector Banks, Foreign Investment is Permitted at 20%	The FDI cap for private banks is greater, at 74%, provided that control and management remain constant. According to RBI regulations, no one company or person may own more than a 10% interest in a bank.
Management	Selection of Management	The Bank Board Bureau (BBB) makes recommendations for the nomination of non-Executive Chairman of PSBs as well as full-time Directors.	Like any other private organisation, private banks have their own hiring procedures, but they must also follow RBI regulations.
Ease of or, Comfort in Banking	Innovation and Novel Technology	Public banks are sluggish to adopt new technology and continue using outdated procedures.	Private banks are constantly eager to implement cutting-edge technology that would hasten their operations and boost accuracy.
Customer Service	Redressal of queries or, Consumer Grievance	Employees of public sector banks are not sufficiently pushed to respond to consumer inquiries or address customer complaints.	Employees of private sector banks are more responsive and proactive in meeting consumer needs.
Accessibility	Quantity of Branches	Banks in the public sector service more tier 2 cities, rural areas, and have a larger branch network.	Despite banks using technology Private banks mostly serve Tier 1 cities and a small number of Tier 2 cities, with little access to the rural populace.
Services	Customer Facilities	Both public and private sector banks offer a wide range of banking services and goods. However, public sector banks are much ahead in terms of offering services to the disadvantaged group in society.	The only difference between private sector banks and public sector banks is that the latter place a greater emphasis on customer satisfaction and charge a higher price for their services, while the former have far less of an outreach programme in rural areas.
Disbursal of Loans	Speed	At contrast to the private sector, loan disbursal typically entails a lot of paperwork and takes longer in public sector banks. Employees in public sector banks are motivated by antiquated procedures, which shortens turnaround times.	Public Sector Bank Loan Disbursal is based on employee performance, and that, too, is fueled by cutting-edge, technologically advanced processes that speed up turnaround.
Customer Base	Quantity of Customers	Due to their extensive geographic coverage and the perception that government banks are more reliable than private ones, public sector banks have a large consumer base.	Private banks have a smaller customer base, and it takes them longer to earn people's trust.
Promotion Status of Employees	Promotion Process for the Employees	Banks in the public sector Performance is not the main criterion for promotion; rather, employees are promoted based on their seniority.	Promotion within Private Sector Banks is based on merit. Only productive workers will see growth.

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