Private bank stocks: Aggressive? Yes, but better for investors with a risk appetite: 6 small private bank stocks with upside potential up to 36% in 1 year
Synopsis
Sometimes, an apparently negative event is indicative of an overall positive development. Recently, the MD & CEO of a private bank was asked to resign over unauthorized spending. Now, remember that we are a country where bank chiefs have gone scot free even when they indulged in reckless lending for a consideration. That the board and auditor of this bank decided the MD & CEO should resign for what is, strictly speaking, not a very serious matter (compared to past scams at least) suggests that banking systems and processes have seen some improvement. Even 10 years back, neither the auditor nor the board would have taken such a step for an issue like this. So, if the systems have improved, things are surely changing for the better.
What has made banks like HDFC and ICICI what they are today? Besides many other factors, there is one factor – not quantitative, but qualitative – which made the difference. From the very start, that is from 1997 onward, when not many banks were using technology to scale up and put systems in place to keep a check on NPAs, these banks focused on technology. Though it is a different issue that once they achieved a certain scale, they became
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