Essay on Banks privatization Pro and Cons for Class 10, 12 and Mains Exam

Essay on Banks privatization Pro and Cons for Class 10, 12, Mains Exam (UPSC, PSC, SSC)

If we are regularly watch news channels we are certain to certain to come across certain phrases such as “ privatisation of banks “ ,  “ privatization of government assets “ etc.  For this concept to be clear in our minds we must try to understand it first and what would we be it’s advantages and disadvantages . Privatisation means the transfer of ownership or selling of completely  out partially owned government companies to any  individual or any privately owned company. Today we will looking at what could be the possible advantages and disadvantages of privatizing government owned banks. The government of India feels that the step taken by them will benefit the general public.  They believe that a government should have full support for the enterprises that are emerging in India.  They are contrary to the belief that in today’s world government should remain owner of its enterprises.

Here are some possible advantages that are related to the privatisation of public sector banks.Its not hidden from anyone that private banks are more profitable than their public counterpart so their privatization saves the government from possible funds losses which will let them focus on businesses that are more profitable and well suited for the mass. In order for a private banks to generate profit they are constantly under the pressure of Efficienctly running the business. They are more advanced that public banks , they offer better and fast services . They serve customer as if they are the king,  and are more profitable in the long run. The privitisation is expected to take some of the responsibilities off government’s head as they are more strict to people who don’t pay their loan and try to commit illegal activities via there service. After the banks are sold to individuals the foreign investors are more likely to invest in them as they see some potential in it , this leads to the inflow of foreign money in India. Since public  banks are owned by the govt so they are always under political influence , but if they are privatised they would be freed from taking action based on the political rivalry.

Now we would heading over to look at some of the possible disadvantages of Bank privitisation. Often times it happens that individuals or private entities don’t find it attractive to buy loss making companies at high prices. They make it difficult for the government to find a buyer . Moreover the employees who were working in those companies loose faith in the government and start to revolt against them starting chaos and hamper the normal functioning of the country. If the ownership is transferred to wrong hands they may indulge in illegal activities such as corruption and try to get as much as money as possible by fooling the general public. In today’s world nothing is guaranteed and so is the chances of a loss making company suddenly changing into a profitable business. It all depends on the  management upon whom the duty is being imposed.

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