Goodwill in Business

Today I was going across the credit growth numbers of Indian Banks and was surprised to find out that between 16th Jan 2009 to 15th Jan 2010:
Foreign banks lost 9.7% of their business. (credit offtake)
Private Banks grew by mere 9.8%
While Public sector banks which almost constitutes 75% of the total credit offtake grow by an amazing 16.8%
Private and foreign banks tend to have leaner operation cost and more convinient services resulting in lower rates and ease in obtaining credit. Now there can be 2 reasons why the public sector banks are growing at the cost of Private/foreign banks:
1. They are working extra hard to make themselves accessible to their customers while charging them competitive prices.
2. Over the past couple of years the story of private banks man-handling and threatening their defaulting customers have scared even the good customers away.
Tradition demands that the loan shark be shrewd and cold blodded in order to be able to recover his outstanding. However looks like the Public and the foreign banks in India have taken these saying a bit too seriously because now their customers are scared of them.
Note: This theory is unsubstantiated. I really need to organize myself to find out time to dig deep into it before I can confirm what I have written here.

street, Bengaluru South, Karnataka, India

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