1. 📖 Background: Why Reforms Were Needed

Nationalisation: 1969 & 1980 → Banks brought under Govt. control for wider reach (agriculture, rural, poor).
Problems faced by PSBs:
- High NPAs (bad loans)
- Low profitability
- Political interference in lending
- Outdated technology & poor customer service

2. 🏛️ Key Committees on Banking Reforms

🔹 Narasimham Committee I (1991) – First Big Shake-up

Reduce Govt. control in PSBs
Clear classification of loans (Standard / Sub-standard / Doubtful)
Allow new private & foreign banks
Strengthen RBI as regulator
Establish Debt Recovery Tribunals (DRTs)

🔹 Narasimham Committee II (1998) – Follow-up

Mergers of strong banks → large, competitive banks
Narrow Banking → weak banks to avoid risky lending
Professionalise bank boards

🔹 P.J. Nayak Committee (2014) – Modern Blueprint

Govt. stake in PSBs ↓ to below 50%
Set up Bank Investment Company (BIC) to hold govt. shares
Empower boards, establish Bank Boards Bureau (BBB)

3. 🌈 Indradhanush Plan (2015) – 7-Point Strategy

A-B-C-D-E-F-G:

A – Appointments (professional leadership)
B – Bank Boards Bureau
C – Capitalisation (Govt. funds infusion)
D – De-stressing (NPA resolution)
E – Empowerment (freedom in decision-making)
F – Framework of Accountability
G – Governance reforms

4. 🔑 The 4R Strategy (2015–19)

Objective: Fix NPAs + strengthen PSBs

Step	Meaning	Key Actions	Results
Recognition 🔍	Admit NPAs openly	Stopped hiding bad loans, raised PCR	NPAs shot up to ₹3.93L cr (2019) but books became transparent
Resolution 💼	Recover from defaulters	Used IBC, asset sales	Record recovery ₹2.87L cr (2015–19)
Recapitalisation💰	Infuse funds	Govt injected ₹3.14L cr	Boosted lending power
Reforms 🛠️	Governance clean-up	Shell company crackdown, Fugitive Economic Offenders Act	Reduced fraud & wilful defaults

5. 🚀 EASE Agenda (2018 onwards) – Transforming PSBs

6 Focus Areas:

Customer Responsiveness 📱 → psbloansin59minutes, UPI, e-KYC
Responsible Banking 🛡️ → NPA management units, better risk checks
Credit Flow to MSMEs 🏭 → UdyamiMitra, PM Vishwakarma loans
Financial Inclusion 🌾 → 34 cr Jan Dhan accounts, 96% villages covered
Digitalisation & Skills 💻 → Mobile banking, Braille ATMs, local languages
Governance 📊 → EASE Index (140 metrics), CEO/Chairman separation

📈 Impact:

Loan approvals 25% faster
Massive DBT transfers (₹6.28L cr)
Stronger credit discipline

6. 🏦 Public Sector Banks – Current Status

🔹 Number of PSBs

Pre-merger: 27
Post-merger (2020): 12

🔹 List of PSBs (12)

State Bank of India
Punjab National Bank
Bank of Baroda
Canara Bank
Union Bank of India
Indian Bank
Bank of India
Central Bank of India
Indian Overseas Bank
UCO Bank
Bank of Maharashtra
Punjab & Sind Bank

🔹 Major Recent Mergers

2019: Vijaya Bank + Dena Bank → Bank of Baroda
2020:
- PNB + OBC + United Bank
- Canara + Syndicate
- Union + Andhra + Corporation
- Indian Bank + Allahabad

7. 🆚 Public vs Private Sector Banks (Exam Spotter)

Public Sector Banks: Govt. holds >50% stake (control & ownership)
Private Sector Banks: Majority owned by private individuals/institutions

8. 🏆 Key Achievements (2015–2019)

NPA Recovery: ₹2.87 lakh cr via IBC
Jan Dhan Accounts: 34+ crore
Village Banking: 96% coverage
DBT Transfers: ₹6.28 lakh cr
Fraud Control: Fugitive Economic Offenders Act

9. 🔮 The Road Ahead

More digital adoption (AI for fraud detection, loan approvals)
Climate-friendly finance (Green lending, ESG focus)
Global competitiveness through bigger, stronger PSBs
Ongoing focus on governance, transparency, customer-first banking

10. ⚡ Quick FAQs

Q1. What is the 4R Strategy?
👉 Recognition, Resolution, Recapitalisation, Reforms

Q2. What is the EASE Index?
👉 Measures PSBs on 140 metrics (digitalisation, customer service, etc.)

Q3. Role of IBC?
👉 Enabled banks to recover large NPAs by taking over defaulters’ assets

Q4. How many PSBs now?
👉 12 (post-April 2020 mergers)

Q5. Best PSBs?

SBI → Size & market share
Canara Bank → Profit growth & reforms
BoB → Consistent efficiency

Public Sector Banks Reforms: 4R Strategy, EASE Agenda & Key Wins