Commercial Banking

1. Name Ashpreet Singh
MBA 3rd Sem.
Amity Business School
Sub:- Commercial Banking

2. CONTENTS
•HISTORY OF BANKING
•COMMERCIAL BANKING
•RETAIL BANKING
•WHOLESALE BANKING
•CORPORATE BANKING
•INVESTMENT BANKING

3. History Of Banking
Banking offers several facilities and opportunities.
Banks in India were started on British pattern in
the beginning of the 19th century. The first half of
the 19th century , The East India Company
established 3 banks;
• The Bank of Bengal
• The bank of Bombay
• The Bank of Madras

4. Commercial Banking
The Commercial Bank of India, also known
as Exchange Bank was a bank which was
established in Bombay Presidency (now
Mumbai), in 1845 of the British Raj period.

5. INTRODUCTION
A commercial bank is a financial institution
that is authorized by law to receive money
from businesses and individuals and lend
money to them. Commercial banks are open to
the public and serve individuals, institutions,
and businesses.

6. SERVICES BY COMMERCIAL BANKS
• Money Withdrawal
• Money Transfers
• Savings
• Loans/Mortgages
• Foreign Exchange
• 24- hour Banking
• Safeguard money

7. TYPES OF COMMERCIAL
BANKS
• DEPOSIT BANKS
• INDUSTRIAL BANKS
• SAVINGS BANKS
• EXCHANGE BANKS
• AGRICULTURAL BANKS
• MISCELLANEOUS BANKS

8. COMMERCIAL BANKS CLASSIFIED IN
FOLLOWING
• Public Sector /Nationalized Banks(22)
• Private Sector Banks (Indian) and(8)
• Foreign-Commercial Banks in India(12)

9. Public Sector /Nationalized
Banks(22)
• The Following 7 Banks Were Nationalized And Made
The Subsidiaries Of SBI
• 1 State Bank of Hyderabad.(Nationalized in 1960)
• 2 State Bank of Mysore.(Nationalized in 1960)
• 3 State Bank of Patiala.(Nationalized in 1960)
• 4 State Bank of Saurashtra.(Nationalized in 1969)
• 5 State Bank of Travancore.(Nationalized in 1960)
• 6 State Bank of Bikaner and Jaipur.(Nationalized in 1969)
• 7 State Bank of Indore.(Nationalized in 1969)

10. Public Sector /Nationalized
Banks(22)
•The Following 14 Major Banks Were Nationalized
On 19th July 1969 (Mrs. Indira Gandhi)
• 1 Allahabad Bank
• 2 Bank of Baroda
• 3 Bank of Maharashtra
• 4 Bank of India
• 5 Canara Bank
• 6 Central Bank of India
• 7 Dena Bank
• 8 Indian Bank
• 9 Indian Overseas Bank
• 10 Punjab National Bank

11. Public Sector /Nationalized Banks(22)
• 11 Syndicate Bank
• 12 UCO Bank
• 13 Union Bank of India
• 14 United Bank of India

12. IDBI BANK LTD.
IDBI-Industrial Development Bank of India
was established as a subsidiary of Reserve
Bank of India-RBI on 1st July 1964. From
1st October 2004 IDBI Bank Ltd started
commencing as a Full Service Commercial
Bank.

13. Public Sector /Nationalized
Banks(22)
•The Following 7 Banks Were Nationalized In
1980.
• 1 Andhra Bank
• 2 Corporation Bank
• 3 New Bank of India
• 4 Oriental Bank of Commerce
• 5 Punjab and Sind Bank
• 6 Vijaya Bank

14. Private Sector Banks (Indian)
• 1 Ing Vysya Bank Ltd (Kotak Mahindra Bank)
• 2 Axis Bank Ltd
• 3 Indusind Bank Ltd
• 4 ICICI Banking Corporation Bank Ltd
• 5 Global Trust Bank Ltd
• 6 HDFC Bank Ltd
• 7 Centurion Bank Ltd
• 8 Bank of Punjab Ltd

15. Foreign-Commercial Banks in
India(12)
• 1 American Express Bank Ltd.
• 2 ANZ Gridlays Bank Plc.
• 3 Bank of America NT & SA
• 4 Bank of Tokyo Ltd.
• 5 Banquc Nationale de Paris
• 6 Barclays Bank Plc
• 7 Citi Bank N.C.
• 8 Deutsche Bank A.G.
• 9 Hongkong and Shanghai Banking Corporation
• 10 Standard Chartered Bank.
• 11 The Chase Manhattan Bank Ltd.
• 12 Dresdner Bank AG

16. TOP RANKING COMMERCIAL
BANKS IN INDIA
1. STATE BANK OF INDIA
2. ICICI Bank Limited
3. Punjab National Bank
4. Canara Bank
5. Bank of Baroda
6. Bank of India
7. Union Bank of India
8. Industrial Development Bank of India Limited
9. Central Bank of India
10. HDFC Bank Limited
11. UCO Bank
12. Syndicate Bank
13. Indian Overseas Bank
14. Oriental Bank of Commerce
15. Allahabad Bank

17. Role of Commercial Banks in the
Economic Development of a Country
• 1. Banks promote capital formation
• 2. Investment in new enterprises
• 3. Promotion of trade and industry
• 4. Development of agriculture
• 5. Influencing economic activity
• 6. Implementation of Monetary policy

18. Retail banking
HISTORY
•Organized banking services started in 15th and 16th
century Europe, when banks began opening branches
in commercial areas of large cities.
•By the last quarter of 19th century banks were
consolidating their branch networks so that they
could operate in a more integrated manner.

19. SUMMARY
RETAIL BANKING: Retail banking refers to banking in
which banking institutions execute transactions
directly with consumers rather than corporations
or other banks.
Services offered includes : Savings and checking
accounts, mortgages, personal loans, debit cards,
credit cards and so forth.
Indian retail banking is showing phenomenal growth
Key drivers: Increased consumerism, Internet,
Emergence of new age companies, technology.

20. Retail Banking
Keeping pace with the 7.5 per cent
growth of the Indian economy
over the past few years, the retail banking sector
in India has also witnessed phenomenal growth.
It has faced up to the need of the hour and
introduced anytime, anywhere banking, for its
customers through ATMs, mobile and internet
banking.

21. EMERGING ISSUES IN HANDLING
RETAIL BANKING
• KNOWING CUSTOMER :-Know your
Customer’ is a concept which is easier said
than practiced. Banksface several hurdles in
achieving this.In order to that the product
lines are targeted atthe right customers-
present and prospective-it is imperative that
an integrated view ofcustomers is available to
the banks

22. • TECHNOLOGY ISSUES :- Retail banking calls
for huge investments in technology. Whether it is
setting up of a Customer Relationship
Management System or Establishing Loan Process
Automation or providing anytime, anywhere
convenience to the vast number of customers or
establishing channel/product/customer
profitability, technology plays apivotal role.

23. • PRODUCT INNOVATION:- Product innovation
continues to be yet another major challenge.
Even though bank after bank is coming out with
new products, not all are successful. What is
ofcrucial importance is the need to understand
the difference between novelty and innovation?

24. • PROCESS CHANGES:- Business Process Re-
engineering is yet another key requirement for
banks to handle the growing retail portfolio.
Simplified processes and aligning them around
delivery of customer service impinging on reducing
customer touch-points are of essence.

25. FUTURE OF RETAIL BANKING
Retail banking has significant past and glorious
future over the years. Indian retail banking,
according to a report, is likely to grow at a
CAGR(Compound annual growth rate) of 28 per
cent till 2010 to Rs 97,00 billion. So, although the
revolution in retail banking has changed the face of
the Indian banking industry as a whole, it has still
miles to go.

26. WHOLESALE BANKING
•Wholesale Banking refers to conducting banking
business with industrial and business entities. This
includes, corporates, trading houses, multinationals
and domestic companies etc.
•As opposed to retail banking which deals with
‘man in the street’, wholesale banking is the
borrowing and lending of funds to other banks,
large multinationals and even government
agencies. As a general description it will cover
various money markets

27. WHOLESALE BANKING
• The concept of wholesale banking is to focus on
corporate, i.e. Companies, firms, proprietorship
concerns, Public Sector, Institutions, societies,
Trusts and clubs.
• The size of both deposits and advances is large
which were cheap to process.

28. Key products under Wholesale Banking can be
classified as:
• Fund-based services
• Non-fund-based services
• Value-added services and
• Internet Banking services

29. • Fund-based services
- Term lending, Short-term Finance
- Working Capital Finance, Bill discounting
- Structured Finance, Export Credit
• Non-Fund-based services
- Bank guarantee, Letter of credit
- Collection of bills and documents
• Value-added Services
- Cash management services,
- Channel financing, vendor financing,
- Real Time Gross Settlement etc.

30. Corporate banking
• Financial services provided by Banks to the
Corporate for meeting their banking and financial
needs for
• Setting up new projects
• Expansion
• Diversification
• Modernization
• Financial restructuring
• Commercial Banking facilities

31. Scope and Functions of Banks
Creating Money
• This is accomplished by the lending and
investing activities of commercial banks in co-
operation with the central bank. This results in
elastic credit system which is necessary for
economic growth. It helps in expansion of
productive facilities and operations

32. Scope and Functions of Banks(contd…)
Transfer of funds
• Banks help in financial transactions by
transferring funds by means of cash, cheque,
demand deposits, bearer’s order, Electronic
transfer of funds, ATM’s etc.
Extension of Credit
• Banks lend for agricultural, commercial and
industrial activities of a country. This helps in
increasing production, capital investments and in
the standard of living

33. Scope and Functions of Banks
Financing of foreign trade
• They help in making payments in the currency the
foreign country example in Francs, Marks, Lira or
Pounds by selling foreign exchange. They also
issue letter of credit when the importer is not
paid immediately by exporter which is more
often the case. They also issue Travellers Cheque
to international tourists.
Safekeeping of Valuables
• They provide a vault for safekeeping of
valuables/securities.

34. Investment Banking
• Investment banks help companies and
governments and their agencies to raise money
by issuing and selling securities in the primary
market.
• They assist public and private corporations in
raising funds in the capital markets (both equity
and debt),
• as well as in providing strategic advisory services
for mergers, acquisitions and other types of
financial transactions.

35. Investment Banking In India
• SBI was the first Indian public sector bank to set
up its investment banking division in 1972.
• ‡SBI Caps and IDBI Caps are two prime examples
of investment banks in India today.
• ‡Currently, there are 300 investment banks
registered with SEBI.
• ‡Currently, without holding a certificate of
registration
granted by the Securities and Exchange Board of
India,
no person can act as a investment banker.

36. Trade In Investments
In India
0
2000
4000
6000
8000
10000
12000
14000
16000
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Deal Value in Million
Source – www.livemint.com