If size and scale are the determinants of competitive strength, PSBs should have grabbed the consumer banking space in the late 1990s and should have been at the forefront of rural banking today. But leadership has come from private banks. Today, when PSBs want subsidies to go rural, private banks are creating business models around the area. In terms of dynamism and innovation, private banks have taken the lead.

But along with that lead have come practices that often walk on the edge of regulation. Our relationship with our bank today is one of knowing the bank manager in a PSB and the amount of money in a private bank. If knowing a PSB manager helps speed up routine transactions, the amount of money helps get better, premium services in a private bank. PSBs, I find, are climbing the services ladder. I also find private banks, with their mis-selling of financial products, harsh and illegal loan recovery methods, and generally a no-holds-barred growth passion, a little scary to deal with.

If the keyword is trust, PSBs are way ahead. If the keyword is growth, it’s private banks. Once manned by humans, banks, if Capgemini’s 2006 Retail Banking Report is to be believed, “are losing the human touch”. Technology, which was supposed to make things easier for us, has morphed into a new monster that bites us, bleeds us, irritates us and creates delicious profits for investors.

And when we try to fight back, we find ourselves talking to recorded voices, emails being answered by trainees who couldn’t care less for regulatory dictums. So, being inflicted on financially- and legally-illiterate consumers are fixed rate loans that are not really fixed, floating rate loans that don’t really float. Stealth banking, wrong charges, new charges, you name it and the banks have it.

... contd.