A survey by industry chamber Assocham found that majority of the businessmen choose PSU banks for borrowing funds because they discovered private banks are clever with their offers and charge higher interest rates. However these borrowers still go for private lenders when it comes to home loans.
The survey said, "For loan facility, majority of businessmen prefer public sector banks as they found them much more reliable and secure, barring for home loans for which they prefer private banks."
On the other hand, private banks have taken a lead on other services like ATMs, phone and internet banking because of their professional approach and efficiency.
The survey conducted for Growth and Emergence of Public and Private Sector Banks in India revealed that more than 60% of businessmen prefer private banks for ATMs, phone and internet banking because they are considered to be highly professional, quick and efficient.
While taking salaried employees into account, the survey said that about 60% of them prefer government banks for insurance purpose because they feel that the state owned banks are more reliable, secure and trustworthy.
Further for investments in bonds, securities and opening demand deposit accounts, more than 40% businessmen choose state owned banks while 20% go in for private banks. Where as only 20% salaries employees prefer public sector banks for mutual funds and about 50% of them choose private sector banks for this purpose.
Meanwhile for fixed deposits and demand deposits, there has been an equal weightage to both public sector and private banks by the salaried employees but businessmen prefer PSU banks for park their funds in any kind of deposit.