ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
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Banking Sector: Looking Ahead

Even as the cost efficiency and profitability of the public sector banks have improved significantly, recent research suggests that financial deepening involving banks may have suffered on account of the risk aversion of public sector banks, and their inability to effectively allocate credit in the face of credit risk. This article argues that it is time to bite the bullet and privatise the public sector banks and, in the interim, to reduce the risk associated with creation of bank assets by facilitating greater securitisation of credit.

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