The huge bad loans have cramped efficiency and growth of these banks. Most state-run banks say falling revenues from interest based income, a traditional earnings mainstay, is another big challenge. State banks need new products to counter competition, said, N S Gujral, executive director of Corporation Bank. State-run banks have faced a stiff fight from private banks that are technology savvy and have relatively fewer staff. State-run banks are starting to address the problem by computerising branches and opening automated teller machines.
Analysts see high staff expenses as yet another problem facing state-run banks.
The state banks, which employ about 850,000 people, are dragged down by an excess work force which has forced the banks to launch a voluntary retirement scheme. All rights reserved. Republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon. All Rights Reserved.