Introduction to Indian Banking-B.V.Raghunandan

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introduction to the study of banking including the Indian banking system

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Introduction to Indian Banking-B.V.Raghunandan

  1. 1. Workshop on Modern Banking Presentation by: B.V.Raghunandan, Faculty of Commerce, SVS College, Bantwal. Venue: St. Agnes College, Mangalore. December20, 2006
  2. 2. Chapter I:Introduction <ul><li>Meaning & Definition </li></ul><ul><li>-Accepting Deposits </li></ul><ul><li>-Lending or Investment </li></ul><ul><li>-Nature of Repayment </li></ul><ul><li>-Nature of Withdrawal </li></ul>
  3. 3. Significance of Banks <ul><li>Savings Mobilisation </li></ul><ul><li>Remittance of Funds </li></ul><ul><li>Development of Bill Market </li></ul><ul><li>Well Developed Money market </li></ul><ul><li>Development of Capital Market </li></ul><ul><li>Public Finance </li></ul><ul><li>Financing the Nation </li></ul><ul><li>Risk Free Investment </li></ul><ul><li>Corporate Services </li></ul><ul><li>Social Banking </li></ul>
  4. 4. Evolution of Banking in India <ul><li>Presidency Banks: Bank of Bengal in 1809,Bank of Bombay in 1840 & Bank of Madras in 1843 </li></ul><ul><li>Imperial Bank of India -1921 </li></ul><ul><li>Reserve Bank of India-1935 </li></ul><ul><li>State bank of India-1955 </li></ul><ul><li>Nationalisation of 14 Banks-1969 </li></ul><ul><li>Second Dose of Nationalisation –1980 </li></ul><ul><li>Narasimham Committee Reforms-1990s </li></ul><ul><li>ICICI Merger- 2003 </li></ul>
  5. 5. Composition of Indian Banking System <ul><li>Reserve Bank of India </li></ul><ul><li>Commercial Banks </li></ul><ul><li>Development Banks </li></ul><ul><li>Regional Rural Banks </li></ul><ul><li>Co-operative Banks </li></ul><ul><li>NABARD </li></ul><ul><li>Land Development Banks </li></ul><ul><li>Exim Banks </li></ul>
  6. 6. Reserve Bank of India <ul><li>Established in 1935 </li></ul><ul><li>Central Board of Directors with 20 members </li></ul><ul><li>1local Board for each of the four regions </li></ul><ul><li>Traditional central banking functions </li></ul><ul><li>Regulatory functions </li></ul><ul><li>Promotional functions </li></ul>
  7. 7. Commercial Banks <ul><li>Public Sector Banks: 1+7+14+6=28 </li></ul><ul><li>Private Sector Banks: Indian,foreign & New Generation Banks </li></ul><ul><li>Scheduled & Non-Scheduled banks </li></ul>
  8. 8. Development Banks <ul><li>IFCI Ltd in 1948 </li></ul><ul><li>ICICI Ltd in 1955 </li></ul><ul><li>18 SFCs </li></ul><ul><li>Industrial Investment Bank of India (IRCI in 1971 and reincorporated in 1997 </li></ul><ul><li>IDBI in 1964 </li></ul>
  9. 9. Regional Rural Banks <ul><li>Product of 20 point programme of the govt. </li></ul><ul><li>Scheduled Banks & Non-Scheduled Banks </li></ul><ul><li>Treated as cooperative societies </li></ul><ul><li>Sponsored by a public sector bank </li></ul><ul><li>196 RRBs covering 451 districts spread over 23 states having 14,552 branches </li></ul><ul><li>Area Restriction </li></ul>
  10. 10. Co-operative Banks <ul><li>Three Tier Structure </li></ul><ul><li>Different Economic Groups </li></ul><ul><li>Most of the Functions of Commercial Banks </li></ul>
  11. 11. NABARD <ul><li>Set-up in 1982 </li></ul><ul><li>Took over ARC </li></ul><ul><li>Refinance </li></ul><ul><li>Inspection of RRBs </li></ul><ul><li>Routing Branch Expansion applications of RRBs </li></ul><ul><li>Asscn with World Bank & others </li></ul><ul><li>Linking SHGs and NGOs </li></ul><ul><li>Kisan Credit Card Scheme in collab with RBI,Comm. Banks, Coop Banks </li></ul><ul><li>Micro-Finance Initiative </li></ul>
  12. 12. Land Development Banks <ul><li>Long-term finance to agriculture </li></ul><ul><li>Co-operative institutions </li></ul><ul><li>Mortgage is created on the land </li></ul><ul><li>50% of the market value of the land given as loan </li></ul><ul><li>Severe criticisms </li></ul>
  13. 13. Foreign Exchange Banks <ul><li>Collection of Foreign Bills </li></ul><ul><li>Accepting Foreign Bills </li></ul><ul><li>Issue of letter of credit </li></ul><ul><li>Dealing in Foreign Currencies </li></ul><ul><li>Discounting foreign bills </li></ul><ul><li>Providing International trade Information to exporters & importers </li></ul>

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