If you ask me today in which sector would I like to invest? I would, in turn, ask, show me a sector which has all the following ingredients: disruption, digitisation, technology, consumption, retail, national presence, and more importantly, access to real billion customers.
So, what’s the sector I am talking about? It’s an age old business that we all know as banking. But there is no denying that, for all its potential, over the past five years, banks have proved to be the biggest wealth destroyers. Yes, I am talking about public sector banks (PSBs).
Although in the Bull Run of 2003-2007, PSBs were the biggest wealth creators. Post 2008, they expanded, opened a lot of branches, added many new accounts, upgraded their technology but yet destroyed wealth mainly because of mismanagement, greed, corruption and government interference. The concept was never wrong, but it was sloppy execution and dubious intent that, at the end, did them in. In the end, private sector banks made the most of the failures of PSBs. They understood the forthcoming growth opportunities; saw millions of unbanked people in urban, semi-urban and rural areas, mushrooming demand from corporate. With a tight control on disbursement, professional management, technology, flexible services, zilch political interferences, private sector banks have proved to be the biggest wealth creator for the past five to 10 years. In fact, I believe for the next five, ten or 20 years