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About 67% of salaried class opt for Govt. banks for insurance
Sixty seven per cent of salaried employees to go in for government owned companies for insurance purposes as they feel such institutions more credible and secure while 25% of them still prefer private banks for the same and 8% continue to show their apathy to either of the two, according to findings of Assocham paper.

The governments owned insurers, led by the Life Insurance Corporation (LIC), maintain the top share in selling the insurance products and their penetration far outweighs their private sector peers, reveals the Assocham paper.

The findings of the Assocham contained at a study which it brought out on 'Growth and Emergence of Public and Private Sector Banks in India', in which over 1250 salaried employees, businessmen, lawyers have been interviewed.

However, when it comes to mutual funds, the private sector players are preferred among the salaried employees, though the sector itself remains a low key as the retail market investor does not yet find confidence. As much as 60% of salaried employees in all segments prefer private sector for mutual fund while only 20% opt for Public Sector Banks for the same.

20% are indifferent to either of the two sectors for parking their funds in mutual funds while 10% do not avail this service. 40% of employees prefer public sector banks for purposes of investment in bonds & securities as compared to 30% who prefer the private banks.

The insurance services provided by the public sector banks are preferred by 67% of the salaried employees, while only 25% go in for private banks for insurance purposes, and remaining 8% are indifferent to either of the two categories. This preference for public sector banks (PSBs) for insurance is mainly due to the fact that as a general perception, the employees find them reliable and secure especially at times when global down is catching up.

The consolidated preferences of salaried employees in public and private sector banks show an inclination towards the private banks.

Releasing the paper, D S Rawat, Assocham Secretary General said that for bonds and securities, businessmen preference is the other way round i.e. 80% preferring PSBs. For Demat services 40% prefer private banks while 20% are indifferent. For opening demand deposit accounts 40% of the businessmen prefer PSBs while the same percentage prefer the private banks for demand deposit. For fixed deposits 60% of them prefer PSBs, 20% prefer private banks while 20% are indifferent between the two types.

For credit cards 60% of the businessmen prefer PSBs while for debit cards 40% prefer private banks, 20% prefer PSBs and 20% being indifferent.  For ATMs 60% of the businessmen prefer private banks, while for phone and internets banking all the businessmen have opted for private banks because they are highly professional, quick and efficient and have good infrastructure and good appearances.

For loan facility, the majorities of businessmen have preferred public sector banks as they found them much more reliable and secure, barring for home loans for which they prefer private banks. This is because private banks are too messy with tremendous growth, difficult to comprehend their offers, charge high rates of interests and are very clever with customers.

Most of the businessmen prefer Indian Overseas Bank, Corporation Bank, PNB, SBI & Syndicate bank in the PSBs while in the private banks they prefer Yes bank, HDFC, Kotak Mahindra, etc. just like salaried employees and professionals the businessmen have also ranked private banks higher than PSBs giving them an average of 6 on 10 to PSBs as compared to 7 on 10 to private banks.

For all kinds of loans, majority of the employees surveyed prefer public sector banks, because they perceive that the rates of interest in PSBs are lower and more reliable than the private banks. Moreover, private banks are profit oriented, have high rates of interests, and follow persuasive banking approach that becomes irritating.

It is also perceived that PSBs are not profit oriented and are therefore more focused on building confidence among its customers. For investments in mutual funds and bonds, a significant outcome is revealed, that is, all three categories are convergent on their preference; it is private banks for mutual funds and for bonds it is the PSBs, added Mr. Rawat.

For demand and fixed deposits majority of the salaried employees have given equal weightage to public sector banks and private banks, while businessmen are more inclined towards PSBs for all types of deposits. A very high percentage of all the 3 categories have preferred the private banks for credit cards, debit cards, ATMs, phone banking & internet banking, adds the survey.

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