2. INDEXSr no. Particulars Page no.1 Introduction 1.1 Industry definition 1.2 History of Banking in India 1.3 Bank Definition 1.4 Banking definition2 Types of bank 2.1 Central bank 2.2 Commercial Banks a Public Sector Banks b Private Sectors Banks c Foreign Banks d Development Banks 2.3.Co-operative Banks 2.4 Scheduled Banks 2.5 Non-scheduled bank in India3 Banking products & services 3.1 Primary functions a) Accepting deposits 1 Types of Bank Accounts I Checking Account/ current a/c II Savings Account III Money Market Account IV Certificate of Deposit/ fixed V Recurring deposit a/c b) Granting loans and advances
3. I Loans II Advances i Cash Credit ii Overdraft iii Discounting of Bills 3.2 Secondary functions 3.3 Online banking 3.4 Mobile Banking Services4 Reserve Bank of India 4.1 R.B.I profile. 4.2 Major RBI Functions5 Role of Banks6 Role of Banks in Indian Economy7 Growth of bank in India8 Indias GDP Growth to make the Indian Banking Industry third largest in the World by 20259 Banking Sector in India: Counting on Credit Growth10 Banking reform11 Top Banking Companies in India
4. 12 Top Private Banks in India13 Punch lines of banks in India14 CMDs & CEOs of Banks in India 201115 Logos of bank in India16 Merger &Acquisition of banks in India after 199117 Career Opportunities in Banking
5. 1 Banking Industry in India1.1Industry definition:The Banking industry comprises of segments that provide financial assistance and advisoryservices to its customers by means of varied functions such as commercial banking,wholesale banking, personal banking, internet banking, mobile banking, credit unions,investment banking and the like.With years, banks are also adding services to their customers. The Indian banking industry ispassing through a phase of customers market. The customers have more choices in choosingtheir banks. A competition has been established within the banks operating in India.With stiff competition and advancement of technology, the services provided by banks havebecome more easy and convenient. The past days are witness to an hour wait beforewithdrawing cash from accounts or a cheque from north of the country being cleared in onemonth in the south.Banks are among the main participants of the financial system in India. Banking offersseveral facilities & Opportunities. This section provides comprehensive and updatedinformation, guidance and assistance in all areas of banking in India.Bank of Hindustan, set up in 1870, was the earliest Indian Bank . Banking in India on modernlines started with the establishment of three presidency banks under Presidency Banks act1876 i.e. Bank of Calcutta, Bank of Bombay and Bank of Madras.The commercial banking structure in India consists of: Scheduled Commercial Banks &Unscheduled Banks. Banking Regulation Act of India, 1949 defines Banking as "accepting,for the purpose of lending or investment of deposits of money from the public, repayable ondemand or otherwise and withdrawable by cheques, draft, order or otherwise."
6. The arrival of foreign and private banks with their superior state-of-the-art technology-basedservices pushed Indian Banks also to follow suit by going in for the latest technologies so asto meet the threat of competition and retain customer base.The evolution of IT services outsourcing in the Indian banks has presently moved on to thelevel of Facilities Management (FM). Banks now looking at business process management(BPM) to increase returns on investment, improve customer relationship management (CRM)and employee productivity.For, these entities sustaining long-term customer relationship management (CRM) hasbecome a challenge with almost everyone in the market with similar productsIndustry Segments:Public Sector Banks:Almost 80% of the business is still controlled by Public Sector Banks (PSBs). PSBs are stilldominating the commercial banking system. Shares of the leading PSBs are already listed onthe stock exchanges.The PSBs will play an important role in the industry due to its number of branches andforeign banks facing the constraint of limited number of branches. Hence, in order to achievean efficient banking system, the onus is on the Government to encourage the PSBs to be runon professional lines.Private Sector Banks:The RBI has given licenses to new private sector banks as part of the liberalization process.The RBI has also been granting licenses to industrial houses. Many banks are successfullyrunning in the retail and consumer segments but are yet to deliver services to industrialfinance, retail trade, small business and agricultural finance.
7. Foreign banks:Foreign banks have been operating in India for decades with a few of them having operationsin India for over a century. The number of foreign bank branches in India has increasedsignificantly in recent years since RBI issued a number of licenses - well beyond thecommitments made to the World Trade Organization. The presence of foreign banks in Indiahas benefited the financial system by enhancing competition, resulting in higher efficiency.There has also been transfer of technology and specialized skills which has had some"demonstration effect" as Indian banks too have upgraded their skills, improved their scale ofoperations and diversified into other activities. At a time when access to foreign currencyfunds was a constraint for the Indian companies, the presence of foreign banks in Indiaenabled large Indian companies to access foreign currency resources from the overseasbranches of these banks. Also with the presence of foreign banks, as borrowers in the moneymarket and their operation in the foreign exchange market has resulted in the creation anddeepening of the inter-bank money market. Now, it is the challenge for the supervisors tomaximize the advantages and minimize the disadvantages of the foreign banks localpresence.1.2 History of Banking in IndiaBanking in India originated in the last decades of the 18th century. The first banks were TheGeneral Bank of India, which started in 1786, and Bank of Hindustan, which started in 1790;both are now defunct. The oldest bank in existence in India is the State Bank of India, whichoriginated in the Bank of Calcutta in June 1806, which almost immediately became the Bankof Bengal. This was one of the three presidency banks, the other two being the Bank ofBombay and the Bank of Madras, all three of which were established under charters from theBritish East India Company. For many years the Presidency banks acted as quasi-centralbanks, as did their successors. The three banks merged in 1921 to form the Imperial Bank ofIndia, which, upon Indias independence, became the State Bank of India in 1955. A bank is a financial institution and a financial intermediary that accepts depositsand channels those deposits into lending activities, either directly or through capital markets.A bank connects customers with capital deficits to customers with capital surpluses.
8. 1.3 Bank DefinitionDefinition of a bank varies from country to country. See the relevant country page (below)for more information.1. Under English common law, a banker is defined as a person who carries on the business ofbanking, which is specified as: conducting current accounts for his customers paying cheques drawn on him, and Collecting cheques for his customers.2. A corporation empowered to deal with cash, domestic and foreign, and to receive thedeposits of money and to loan those monies to third-parties.3. In 1899, the United States Supreme Court (Austen) used these words to define a bank:"A bank is an institution, usually incorporated with power to issue its promissory notesintended to circulate as money (known as bank notes); or to receive the money of others ongeneral deposit, to form a joint fund that shall be used by the institution, for its own benefit,for one or more of the purposes of making temporary loans and discounts; of dealing in notes,foreign and domestic bills of exchange, coin, bullion, credits, and the remission of money; orwith both these powers, and with the privileges, in addition to these basic powers, ofreceiving special deposits and making collections for the holders of negotiable paper, if theinstitution sees fit to engage in such business."4. An establishment authorized by a government to accept deposits, pay interest, clear checks,make loans, act as an intermediary in financial transactions, and provide other financialservices to its customers.5. Bank is a lawful organization, which accepts deposits that can be withdrawn onDemand. It also lends money to individuals and business houses that need it.
9. 1.4Banking definitionIn general terms, the business activity of accepting and safeguarding money owned by otherindividuals and entities, and then lending out this money in order to earn a profit.‗Banking‘ as an activity involvesAcceptance of deposits and lending or investment of money. It facilitates business activitiesby Providing money and certain services that help in exchange of goods and services.Therefore,Banking is an important auxiliary to trade. It not only provides money for theproduction of Goods and services but also facilitates their exchange between the buyer andseller.2 Types of bankThere are various types of banks which operate in our country to meet the financialrequirements Of different categories of people engaged in agriculture, business, profession,etc. On the basis of Functions, the banking institutions in India may be divided into thefollowing types: 2.1 Central bank A central bank, reserve bank, or monetary authority is a publicinstitution that manages the nations currency, money supply, and interest rates. Central banks
10. also usually oversee the commercial banking system of their respective countries. In contrastto a commercial bank, a central bank possesses a monopoly on increasing the nationsmonetary base, and usually also prints the national currency, which usually serves as thenations legal tender. Examples include the European Central Bank (ECB), the FederalReserve of the United States, and the Peoples Bank of China.The primary function of a central bank is to manage the nations money supply (monetarypolicy), through active duties such as managing interest rates, setting the reserve requirement,and acting as a lender of last resort to the banking sector during times of bank insolvency orfinancial crisis. Central banks usually also have supervisory powers, intended to preventcommercial banks and other financial institutions from reckless or fraudulent behavior.Central banks in most developed nations are institutionally designed to be independent frompolitical interference. 2.2 Commercial Banks Commercial Banks are banking institutions that accept deposits andgrant short-term loans and Advances to their customers. In addition to giving short-termloans, commercial banks also give Medium-term and long-term loan to business enterprises.Now-a-days some of the commercial Banks are also providing housing loan on a long-termbasis to individuals. There are also many Other functions of commercial banks, which arediscussed later in this lesson.Types of Commercial banks: Commercial banks are of three types i.e., Public sector banks,Private sector banks and foreign banks.(i) Public Sector Banks: These are banks where majority stake is held by the Government ofIndia or Reserve Bank of India. Examples of public sector banks are: State Bank of India,
11. Nationalized banksNameAllahabad BankAndhra BankBank of BarodaBank of IndiaBank of MaharashtraCanara BankCentral Bank of IndiaCorporation BankDena BankIndian BankIndian Overseas BankOriental Bank of CommercePunjab & Sind BankPunjab National BankState Bank of IndiaState Bank of MysoreState Bank of PatialaState Bank of Travancore
12. Syndicate BankUCO BankUnion Bank of IndiaUnited Bank of IndiaVijaya Bank Their public sector banks IDBI Bank Dhanlaxmi Bank Jammu & Kashmir Bank Nainital Bank Lakshmi Vilas Bank South Indian Bank (ii) Private Sectors Banks: In case of private sector banks majority of share capital of the Bank is held by private individuals. These banks are registered as companies with limited Liability. For example: The Jammu and Kashmir Bank Ltd., Bank of Rajasthan Ltd., Development Credit Bank Ltd, Lord Krishna Bank Ltd., Bharat Overseas Bank Ltd.,Global Trust Bank, Vysya Bank, etc. 1. Bank of Punjab Ltd. (since merged with Centurian Bank) 2. Centurian Bank of Punjab (since merged with HDFC Bank)
13. 3. Development Credit Bank Ltd.4. HDFC Bank Ltd.5. ICICI Bank Ltd.6. IndusInd Bank Ltd.7. Kotak Mahindra Bank Ltd.8. Axis Bank (earlier UTI Bank)9. Yes Bank Ltd.(iii) Foreign Banks: These banks are registered and have their headquarters in a foreigncountry but operate their branches in our country. Some of the foreign banks operating in ourcountry are Hong Kong and Shanghai Banking Corporation (HSBC), Citibank, AmericanExpress Bank, Standard & Chartered Bank, Grindlay‘s Bank, etc. The number of foreignbanks operating in our country has increased since the financial sector reforms of 1991.Foreign banks operating in India ABN AMRO Bank N.V. (Now merged with RBS) Abu Dhabi Commercial Bank American Express Bank Bank Internasional Indonesia Bank of America NA Bank of Ceylon Bank of Nova Scotia (Scotia Bank) Bank of Tokyo Mitsubishi UFJ
14. Barclays Bank PLC BNP Paribas Calyon Bank Chinatrust Commercial Bank Citibank N.A. DBS Bank Deutsche Bank AG HSBC JPMorgan Chase Bank Krung Thai Bank Mashreq Bank psc Mizuho Corporate Bank Royal Bank of Scotland Shinhan Bank SCOTIA BANK Société Générale Sonali Bank Standard Chartered Bank State Bank of Mauritius UBS VTB iv) Development BanksBusiness often requires medium and long-term capital for purchase of machinery andequipment, Development Banks Industrial Development Bank of India (IDBI) Industrial Finance Corporation of India (IFCI) Export - Import Bank of India (Exim Bank) Industrial Reconstruction Bank of India (IRBI) now (Industrial Investment Bank of India) National Bank for Agriculture and Rural Development (NABARD)
15. Small Industries Development Bank of India (SIDBI) National Housing Bank (NHB)2.3.Co-operative Banks People who come together to jointly serve their common interest often forma co-operative Society under the Co-operative Societies Act. When a co-operative societyengages itself in Banking business it is called a Co-operative Bank. The society has to obtaina license from the Reserve Bank of India before starting banking business. Any co-operativebank as a society is to function under the overall supervision of the Registrar, Co-operativeSocieties of the State.As regards banking business, the society must follow the guidelines setand issued by the Reserve Bank of India.Types of Co-operative BanksThere are three types of co-operative banks operating in our country. They are primary creditsocieties, central co-operative banks and state co-operative banks. These banks are organizedat three levels, village or town level, district level and state level.(i) Primary Credit Societies: These are formed at the village or town level with borrowerand non-borrower members residing in one locality. The operations of each society arerestricted to a small area so that the members know each other and are able to watch over theactivities of all members to prevent frauds.(ii) Central Co-operative Banks: These banks operate at the district level having some ofthe primary credit societies belonging to the same district as their members. These banksprovide loans to their members (i.e., primary credit societies) and function as a link betweenthe primary credit societies and state co-operative banks.(iii) State Co-operative Banks: These are the apex (highest level) co-operative banks in allThe states of the country. They mobilize funds and help in its proper channelization amongVarious sectors. The money reaches the individual borrowers from the state co-operativeBanks through the central co-operative banks and the primary credit societies
16. 2.4Scheduled Banks Scheduled Banks in India are those banks which have been included in theSecond Schedule of Reserve Bank of India (RBI) Act, 1934. RBI in turn includes onlythose banks in this schedule which satisfy the criteria laid down vide section 42 (6) (a) of theAct.2.5Non-scheduled bank in India "Non-scheduled bank in India" means a banking company as defined in clause(c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949), which is not a scheduledbank.
17. 3 Banking products/functions & servicesThe Banking products/function of commercial banks are of two types.(A) Primary functions; and(B) Secondary functions. Let us discuss details about these functions.3.1 Primary functionsThe primary functions of a commercial bank include: a) Accepting deposits; and b) Granting loans and advances.a) Accepting depositsThe most important activity of a commercial bank is to mobilise deposits from the public.People who have surplus income and savings find it convenient to deposit the amounts withbanks. Depending upon the nature of deposits, funds deposited with bank also earn interest.Thus, deposits with the bank grow along with the interest earned. If the rate of interest ishigher, public are motivated to deposit more funds with the bank. There is also safety offunds deposited withthe bank. Types of Bank Accounts For Accepting deposits Though, the types of accounts offered can vary from bank to bank, here aresome of the common bank accounts offered by commercial banks.Checking Account/ current account A checking account is also known as a current account or a transactional account.Money deposited in this type of account can be withdrawn at any time, as there in no
18. restriction on the number of withdrawals and the amount of money withdrawn. Customers aregenerally given paper checks to carry out day-to-day transactions, like paying bills, makingpurchases, or transferring money to another account. ATM (Automated Teller Machine)facility is also provided to the customers. However, no interest is paid on the depositedmoney and sometimes, customers have to pay a charge to the banks for rendering this service.This type of account is generally maintained by businessmen or concerns, as they have tomake a number of financial transactions each day. A transactional account is sometimescalled a demand deposit account, as no notice is required to withdraw money, i.e. money isavailable on demand.Savings Account Savings accounts are aimed towards mobilizing small savings from the generalpublic. There are certain restrictions regarding the number of withdrawals and the amount tobe withdrawn in a particular time period. However, money deposited in this account, earns afair rate of interest. Though the customers cant withdraw their money with checks, they canavail the ATM facility for the same. A passbook is also provided, which keeps track of all thefinancial transactions.Money Market Account A money market account is a type of deposit account, in which money can bedeposited to earn a higher rate of interest than the savings account. However, a minimumbalance is required to be maintained to earn interest and avoid fees. There is also a limit onthe number of transactions that can be carried out in a particular month. The customers areusually allowed to make 6 withdrawals per month.Certificate of Deposit/ fixed deposit account A certificate of deposit is also known as time deposit or fixed deposit account. This type ofbank account requires the customers to deposit a certain sum of money for a fixed timeperiod. The money deposited in this account cant be withdrawn before the date of maturity.However, some banks allow customers to withdraw money before maturity, by charging apenalty. The rate of interest paid on time deposits is usually higher than the other types of
19. bank accounts. In addition to this, the interest paid on this account depends on the maturityperiod, i.e. longer the maturity period, the higher is the rate of interest paid.Banking institutions offer several different types of bank accounts to satisfy the individualneeds of their customers. These bank accounts enable the public to deposit their money inbanks and thereby earn a monetary return.The Recurring deposit The Recurring deposit account is an account in the bank (or a Post office in somecountries) where an investor deposits a fixed amount of money every month for a fixedtenure (mostly ranging from one year to five years). This scheme is meant for investors whowant to deposit a fixed amount every month, in order to get a lump sum after some years. Thesmall monthly savings in the Recurring Deposit scheme enable the depositor to accumulate ahandsome amount on maturity. Interest at term deposit rates is computable on quarterlycompounded basis.b) Grant of loans and advances The second important function of a commercial bank is to grant loans and advances.Such loans and advances are given to members of the public and to the business communityat a higher rateof interest than allowed by banks on various deposit accounts. The rate of interest charged onloans and advances varies according to the purpose and period of loan and also the mode ofrepayment. i) Loans A loan is granted for a specific time period. Generally commercial banks provide short-term loans. But term loans, i.e., loans for more than a year may also be granted. The borrower may be given the entire amount in
20. lump sum or in installments. Loans are generally granted against the security of certain assets. A loan is normally repaid in installments. However, it may also be repaid in lump sum. ii) Advances An advance is a credit facility provided by the bank to its customers. It differs from loan in the sense that loans may be granted for longer period, but advances are normally granted for a short period of time. Further the purpose of granting advances is to meet the day-to-day requirements of business. The rate of interest charged on advances varies from bank to bank. Interest is charged only on the amount withdrawn and not on the sanctioned amount. o Types of Advances Banks grant short-term financial assistance by way of cash credit, overdraft and bill discounting. Let us learn about these. a) Cash Credit Cash credit is an arrangement whereby the bank allows the borrower to draw amountup to a specified limit. The amount is credited to the account of the customer. The customercan withdraw this amount as and when he requires. Interest is charged on the amount actuallywithdrawn. Cash Credit is granted as per terms and conditions agreed with the customers. b) Overdraft Overdraft is also a credit facility granted by bank. A customer who has a currentaccount with the bank is allowed to withdraw more than the amount of credit balance in hisaccount. It is a temporary arrangement. Overdraft facility with a specified limit may beallowed either on the security of assets, or on personal security, or both. c) Discounting of Bills Banks provide short-term finance by discounting bills, that is, making payment ofthe amount before the due date of the bills after deducting a certain rate of discount. Theparty gets the funds without waiting for the date of maturity of the bills. In case any bill isdishonored on the due date, the bank can recover the amount from the customer.
21. 3.2 Secondary functions In addition to the primary functions of accepting deposits and lendingmoney, banks perform a number of other functions, which are called secondary functions.These are as followsa. Issuing letters of credit, travelers cheque, etc.b. Undertaking safe custody of valuables, important document and securities by providingsafe deposit vaults or lockers.c. Providing customers with facilities of foreign exchange dealings.d. Transferring money from one account to another; and from one branch to another branchof the bank through cheque, pay order, demand draft.e. Standing guarantee on behalf of its customers, for making payment for purchase of goods,machinery, vehicles etc.f. Collecting and supplying business information.g. Providing reports on the credit worthiness of customers.i. Providing consumer finance for individuals by way of loans on easy terms for purchase ofconsumer durables like televisions, refrigerators, etc.j. Educational loans to students at reasonable rate of interest for higher studies, especially forprofessional courses. 3.3 Online banking Online banking (or Internet banking) allows customers to conductfinancial transactions on a secure website operated by their retail or virtual bank, credit unionor building society.E-banking solutions have many features and capabilities in common, but traditionally alsohave some that are application specific.The common features fall broadly into several categories Transactional (e.g., performing a financial transaction such as an account to account transfer, paying a bill, wire transfer, apply for a loan, new account, etc.)
22. o Payments to third parties, including bill payments and telegraphic/wire transfers o Funds transfers between a customers own transactional account and savings accounts o Investment purchase or sale o Loan applications and transactions, such as repayments of enrollments Non-transactional (e.g., online statements, cheque links, cobrowsing, chat) o Viewing recent transactions o Downloading bank statements, for example in PDF format o Viewing images of paid cheques Financial Institution Administration Management of multiple users having varying levels of authority Transaction approval processFeatures commonly unique to Internet banking include Personal financial management support, such as importing data into personal accounting software. Some online banking platforms support account aggregation to allow the customers to monitor all of their accounts in one place whether they are with their main bank or with other institutions 3.4 Mobile Banking Services Banks offering mobile access are mostly supporting some or all of the following services: Account Information o Mini-statements and checking of account history o Alerts on account activity or passing of set thresholds o Monitoring of term deposits o Access to loan statements o Access to card statements o Mutual funds / equity statements
23. o Insurance policy management o Pension plan managementPayments & Transfers o Domestic and international fund transfers o Micro-payment handling o Mobile recharging o Commercial payment processing o Bill payment processingInvestments o Portfolio management services o Real-time stock quotes o Personalized alerts and notifications on security pricesSupport o Status of requests for credit, including mortgage approval, and insurance coverage o Check (cheque) book and card requests o Exchange of data messages and email
24. 4 Reserve Bank of IndiaThe RBI headquarters in Mumbai4.1 R.B.I profile.Headquarters Mumbai, Maharashtra Coordinates:Established 1 April 1935Governor Duvvuri SubbaraoCentral bank of IndiaCurrency Indian rupee
25. Reserves US$30,210 crore (US$302.1 billion)Base borrowing rate 8.50%Base deposit rate 6.00%Website http://www.rbi.org.inStructure Central Board of Directors The Board consists of a governor, four deputy governors, four directors to represent the regional boards, one from the Ministry of Finance and ten other directors from various fields. Supportive bodies The Reserve Bank of India has four regional representations: North in New Delhi, South in Chennai, East in Kolkata and West in Mumbai. The representations are formed by five members, appointed for four years by the central government Offices and branchs 4 zonal offices. New Delhi, Chennai, Kolkata and Mumbai. 22 regional offices Few of them are located in Ahmedabad, Bangalore, Bhopal, Bhubaneswar, Chandigarh, Chennai, Delhi, Guwahati, Hyderabad, Jaipur, Jammu, Kanpur, Kolkata, Lucknow, Mumbai, Nagpur, Patna, and Thiruvananthapuram.
26. 4.2 Major RBI Functions.Monetary Authority: Formulates implements and monitors the monetary policy. Objective: maintaining price stability and ensuring adequate flow of credit to productive sectors.Regulator and supervisor of the financial system: Prescribes broad parameters of banking operations within which the countrys banking and financial system functions. Objective: maintain public confidence in the system, protect depositors interest and provide cost-effective banking services to the public.Manager of Foreign Exchange Manages the Foreign Exchange Management Act, 1999. Objective: to facilitate external trade and payment and promote orderly development and maintenance of foreign exchange market in India.Issuer of currency: Issues and exchanges or destroys currency and coins not fit for circulation. Objective: to give the public adequate quantity of supplies of currency notes and coins and in good quality.Developmental rolePerforms a wide range of promotional functions to support national objectives.
27. Banks to the Government: The RBI is the Bankers agent and adviser to the government. It acceptsdeposits and make payments on behalf of the Government. Issue of loans, management ofpublic debt, sale of treasury bills are undertaken by the bank. It helps the government inensuring better co-ordination of monetary and fiscal policies. It provides short term loansnamely "ways and means advances" to the Central Government and State Government. Theseloans have to be rapid within a period of 3 months. It represents the government in various international organizations like IMF,World Bank etc. It sends its official as representative of the government for internationalseminars and conferences. All important policy decision are taken by the government inconsultation with the RBI. It advises the government on important matters like agriculturalcredit, devaluation of rupee, credit policy for the industrial and export sectors etc. Bankers Bank: RBI acts as a banker for all the commercial banks. All scheduled banks come underthe direct control of RBI. All commercial as well as schedule bank has to keep a minimumreserve with the RBI. They have to submit weekly reports to RBI about their transactions. Byperforming 3 functions, the RBI helps the member banks significantly. They are given belowsuch as:(a) It acts as the lender of the last resort.(b) It is the custodian of cash reserves of commercial banks.(c) It clears, transfers the transaction. It acts as the central clearing house.Credit control: The central bank uses the quantitative and qualitative tools to control credit. Itis one of the principal functions of RBI. It helps the bank to ensure exchange rate stabilityand price stability. In quantitative credit control, the volume of credit is controlled and inqualitative credit control, the direction of credit is regulated. Bank rate, open marketoperations and cash reserve ratio are used under the quantitative method. In selective creditcontrol, the weapons used are variation in margin requirements, moral suasion, rationing of
28. credit, issue of directives etc. At present selective control has been given much importanceand it is more suitable for India.Monetary policy Monetary policy is the process by which the monetary authority of a countrycontrols the supply of money, often targeting a rate of interest for the purpose of promotingeconomic growth and stability.  The official goals usually include relatively stable pricesand low unemployment. Monetary theory provides insight into how to craft optimal monetarypolicy. It is referred to as either being expansionary or contractionary, where an expansionarypolicy increases the total supply of money in the economy more rapidly than usual, andcontractionary policy expands the money supply more slowly than usual or even shrinks it.Expansionary policy is traditionally used to try to combat unemployment in a recession bylowering interest rates in the hope that easy credit will entice businesses into expanding.Contractionary policy is intended to slow inflation in hopes of avoiding the resultingdistortions and deterioration of asset values.Monetary policy differs from fiscal policy, which refers to taxation, government spending,and associated borrowingAims of Monetary policy • MP is a part of general economic policy of the govt. • Thus MP contributes to the achievement of the goals of economic policy. • Objective of MP may be: Full employment Stable exchange rate Healthy Bop Economic growth Reasonable Price Stability Greater equality in distribution of income & wealth
29. Financial stability Instruments Operation of Monetary 1. Discount Rate (Bank Rate) Policy 2.Reserve Ratios Operating Target 3. Open Market Operations • Monetary Base • Bank Credit Intermediate • Interest Rates Target •Monetary Aggregates(M3) Ultimate •Long term Goals interest rates •Total Spending • Price Stability Etc.Instruments of the Monetary Policy The instruments at the disposal of the RBI for managing money supply,interest rates and exchange rates are: Cash Reserve Ratio Statutory Liquidity ratio Open Market Operations Managing Credit Expansion Repo Rate Bank rate Rates paid on government securities Tweaking the basket of currencies against which rupee rate is determined Market Intervention Multiple rates of interest
30. Cash Reserve Ratio: Banks reserve liquidity through their power to create credit.Presently in India, banks are required to maintain the following reserves: o Cash Reserve ratio: 8.25% of demand and time deposits (w.e.f. 24.05.2008) o Statutory Liquidity ratio: 25% of demand and time depositsJust as additional cash inflows enable the banking system to create credit, anyincrease in CRR will require the banking system to contract credit by a large amount.Statutory Liquidity ratio SLR (Statutory Liquidity ratio) is a requirement peculiar to India. Inaddition to ensuring that banks can fall back on the readily saleable governmentdeposits in the event of a run on the bank, it was a prescription to divert bank depositsto meet government investment expenditure.Open Market Operations: Banks as well as other financial institutions, such as insurancecompanies, mutual funds and corporate with surplus cash are big investors ingovernment securities. When RBI wishes to inject liquidity into the market, it hasanother option of buying government securities. When RBI offers to buy thesecurities at a rate that is better than the rate prevailing in the market, some of theinvestors can sell their holdings and the cash inflow would lead to credit creation of alarge magnitude.Similarly, when RBI sells government securities at a higher rate than market rate, RBIabsorbs funds and the banking system contracts credit by a large magnitude to reduceliquidity. This is known as open market operation.
31. Managing Credit Expansion: CRR and OMO reduce liquidity in the system and reduce the ability ofbanks to create credit. RBI also controls sector specific expansion of credit byspecifying maximum amounts that can be lent, minimum margins to be maintainedand higher risk weights.When RBI feels that banks have overextended themselves to certain sectors, the flowof credit to certain sectors is leading to an imbalanced growth of the economy or itwants to control the price of certain commodities by preventing hoarding bywholesalers with borrowed funds, RBI makes sector specific or commodity specificinterventions.Repo rate: Repo rate or repurchase rate is a swap deal involving the immediatesale of securities and simultaneous purchase of those securities at a future date, at adesignated price. It could also be an overnight deal with sale taking place on day oneand repurchase on day two. The repurchase price is adjusted for the interest payablefor the use of funds for the period of contract. Reverse repo involves the immediatepurchase and future sale of those same securities. RBI uses repo and reverse repo tocontrol liquidity on a day-to-day basis.Bank rate: RBI provides refinance to banks against funds deployed by banks inspecified sectors such as export finance portfolio of the banks. In the past, the bankrate used to be the primary interest rate tool of RBI. But over a period of time the reporate has presently emerged as the primary interest rate tool and bank rate has lostmuch of its relevance. Changes in the bank rate are a signal to the market regardingthe direction in which the RBI would like interest rates to move.
32. Rates paid on government securities: RBI, as a banker to the government, helps government to borrow from the market by selling their securities. RBI also determines the timing, size, and rate paid on the issues. Rates offered by RBI on government securities are both a reflection of the market and also an indicator to the market on the direction of interest rate movements. Tweaking the basket of currencies: The exchange rate of rupee is calculated by RBI based on the exchange rates of basket of currencies of countries with which India has significant trade transactions. RBI maintains confidentiality about the weight age given to each currency in the basket and when RBI wishes to manage the extent of volatility in the exchange rate of rupee, RBI adjusts the weight ages properly. Market intervention: Large balance of payment surpluses and build up of Forex reserves are bound to strengthen the rupee in the exchange market. This market force cannot be counted by RBI for long periods of time. However, by intervening in the market by offering to buy any amount of foreign currency at a particular rate, RBI can prevent the sudden strengthening of rupee. RBI seeks to smoothen the movement of rates in either direction so than importers and exporters have time to adjust to the changing exchange rate scenario and are not caught by surprise by violent rate movements, which could cripple them.• Multiple rates of interest – Under rbi fixes the credit quotas for various commercial bank.& commercial bank borrows funds from rbi within their quotas they are charges interest at bank rates. But if it is borrowed more than quotas then they are charged higher interest rates i.e. more than bank rates .
33. • Policy rates, Reserve ratios, lending, and deposit rates as of 14 September, 2011 • 6.0%• Bank Rate • 8.25%• Repo Rate • 7.25%• Reverse Repo Rate • 6.0%• Cash Reserve Ratio (CRR) • 24.0%• Statutory Liquidity Ratio (SLR) • 9.50%–10.75%• Base Rate • 4%• Reserve Bank Rate • 8.50%–9.50%• Deposit Rate
34. 5 Role of Banks A proper financial sector is of special importance for the economic growth ofdeveloping and underdeveloped countries. The commercial banking sector which forms oneof the backbones of the financial sector should be well organized and efficient for the growthdynamics of a growing economy. No underdeveloped country can progress without firstsetting up a sound system of commercial banking. The importance of a sound system ofcommercial banking for a developing country may be depicted as follows :1 Capital Formation The rate of saving is generally low in an underdeveloped economy due totheexistence of deep-rooted poverty among the people . Even the potential savings of thecountrycannot be realized due to lack of adequate banking facilities in the country . Tomobilizedormant savings and to make them available to the entrepreneurs for productivepurposes , thedevelopment of a sound system of commercial banking is essential for adeveloping economy .2 Monetization An underdeveloped economy is characterized by the existence of a largenonmonetized sector , particularly , in the backward and inaccessible areas of the country .Theexistence of this non monetized sector is a hindrance in the economic development ofthecountry . The banks , by opening branches in rural and backward areas , can promote theprocessof monetization in the economy .3 Innovations Innovations are an essential prerequisite for economic progress .Theseinnovations are mostly financed by bank credit in the developed countries . But theentrepreneursin underdeveloped countries cannot bring about these innovations for lack ofbank credit in anadequate measure . The banks should , therefore , pay special attention to thefinancing of business innovations by providing adequate and cheap credit to entrepreneurs4 Finance for Priority Sectors The commercial banks in underdeveloped countries generally hesitate inextending financial accommodation to such sectors as agriculture and small scale industries ,
35. on account of the risks involved there in . They mostly extend credit to trade and commercewhere the risk involved is far less .But for the development of these countries it inessentialthat the banks take risk in extending credit facilities to the priority sectors, such as agricultureand small scale industries.5 Provision for Medium and Long term Finance The commercial banks in underdeveloped countries invariably give loans andadvances for a short period of time . They generally hesitate to extend medium and long termloans to businessmen. As is well known , the new business need medium and long term loansfor their proper establishment . The commercial banks should ,therefore , change theirpolicies in favor of granting medium and long term accommodation to business and industry .6 Cheap Money Policy The commercial banks in an underdeveloped economy should follow cheapmoney policy to stimulate economic activity or to meet the threat of business recession.Infact , cheap money policy is the only policy which can help promote the economic growthof an underdeveloped country . It is heartening to note that recently the commercial bankshave reduced their lending interest rates considerably .7 Need for a Sound Banking System A sound system of commercial banking is an essential prerequisitefor the economic development of a backward country .
36. 6 Role of Banks in Indian Economy In India , as in many developing countries , the commercial banking sectorhas been the dominant element in the country‘s financial system . The sector has performedthe key functions of providing liquidity and payment services to the real sector and hasaccounted for the Bulk of the financial intermediation process . Besides institutionalizingsavings , the banking sector has contributed to the process of economic development byserving as a major source of credit to households , government , business and to weakersectors of the economy like village and small scale industries and agriculture. Over the years,over 30-40% of gross household savings , have been in the form of bank deposits and around60% of the assets of all financial institutions accounted for by commercial banks. Animportant landmark in the development of banking sector in recent years has been theinitiation if reforms following the recommendations of the first Narasimham Committee onFinancial System. In reviewing the strengths and weaknesses of these banks , the Committeesuggested several measures to transform the Indian banking sector from a highly regulated toamore market oriented system and to enable it to compete effectively in an increasinglyglobalised environment . Many of the recommendations of the Committee especially thosepertaining to Interest rate , an institution of prudential regulation and transparent accountingnorms were in line with banking policy reforms implemented by a host of developingcountries since 1970‟ s .
37. 7. Growth of bank in IndiaMarket OverviewThe banking industry too has evolved rapidly over the last few years in India due to theavailability of cheaper technology and falling communication costs. De-regulation,competition from non-financial players, new compliance requirements, and changingcustomer expectations has added complexity and challenges to banking systems andprocesses.Banks, however, face an uphill task in reaching out to the customers in remote locations suchas villages. There is a lower level of literacy and access to Internet. Setting up branchesinvolves higher cost and operating expenses, and lower return on investment. Given the 742-million rural population, the penetration of deposit accounts languishes at a deplorable 18 percent. (Source: Extending Banking to the poor in India‖, Amit Singhal and Bikram Duggal,ICICI Bank).Qualitative growth :The growth of banking in the coming years is likely to be more qualitative than quantitative,according to the report. Based on the projections made in the "India Vision 2020" preparedby the Planning Commission and the Draft 10th Plan, the report forecasts that the pace ofexpansion in the balance-sheets of banks is likely to decelerate.The total assets of all scheduled commercial banks by end-March 2010 is estimated at Rs 40,90,000 crore. That will form about 65 per cent of GDP at current market prices as comparedto 67 per cent in 2002-03. Banks assets are expected to grow at an annual composite rate ofgrowth of 13.4 per cent during the rest of the decade against 16.7 per cent between 1994-95and 2002-03.On the liability side, there is likely to be large additions to capital base and reserves. As thereliance on borrowed funds increases, the pace of deposit growth may slow down. On theasset side, the pace of growth in both advances and investments is forecast to weaken.
38. The high GDP growth in India is creating lots of job opportunities in urban and semi-urbanIndia and it will go further into rural India — increasing the potential for ruralentrepreneurships and rural growth with higher per-capita income and savings opportunities.Investment in Indian marketIndia, among the European investors, is believed to be a good investment despite politicaluncertainty, bureaucratic hassles, shortages of power and infrastructural deficiencies. Indiapresents a vast potential for overseas investment and is actively encouraging the entrance offoreign players into the market. No companies, of any size, aspiring to be a global player can,for long ignore this country which is expected to become one of the top three emergingeconomies.Market potential:India is the fifth largest economy in the world (ranking above France, Italy, the UnitedKingdom, and Russia) and has the third largest GDP in the entire continent of Asia. It is alsothe second largest among emerging nations. (These indicators are based on purchasing powerparity.) India is also one of the few markets in the world which offers high prospects forgrowth and earning potential in practically all areas of business. Yet, despite the practicallyunlimited possibilities in India for overseas businesses, the worlds most populous democracyhas, until fairly recently, failed to get the kind of enthusiastic attention generated by otheremerging economies such as China.2.2 Trend AnalysisFinancial And Banking Sector ReformsThe last decade witnessed the maturity of Indias financial markets. Since 1991, everygovernments of India took major steps in reforming the financial sector of the country. Theimportant achievements in the following fields is discussed under separate heads:• Financial markets• Regulators
39. • Non-banking finance companies• The capital market• Mutual funds• Overall approach to reforms• Deregulation of banking system• Consolidation imperative
40. 8 . Indias GDP Growth to make the Indian Banking Industry third largestin the World by 2025 A study titled Being five star in productivity — road map for excellence inIndian banking was released FICCI-IBA-BCG on 22 August 2011, the eve of IBA-FICCIannual banking conference. The theme for the banking conference was decided to beProductivity Excellence. According to the study, Indias gross domestic product (GDP) growth will makethe Indian banking industry third largest in the world by 2025. The report chalked out anaction agenda for banks, based on insights from an extensive productivity benchmarkingexercise conducted across 40 banks. The report highlighted that banks have to strive for excellence on fivedimensions: branch sales and service, new channels, lean operations, organisation design andbad debt management. The report stated that branches of banks can generate higher levels of revenue forthe banks. Indian banks deploy 62 per cent of staff in customer facing roles as against thebenchmark of 82 per cent observed by BCG globally. Break-out growth in usage of new channels will characterise the next decade inIndian banking. Among the new channels, mobile phones, propelled by 3G and smart phonetechnology, will emerge as an undisputed winner by 2020 accounting for 20-30 per cent oftotal transactions. ATMs have seen exponential growth in usage but are far from maturitywith just about 50 per cent adoption even in metros. New channels will not only enhance theproductivity but can be a source of new customer acquisition.Indian banks, the reportmentioned were to be doing well overall with industry cost-income ratio below 50 per cent. However, there remained plenty of scope for betterment. On an average, Indianbanks have about 20 per cent of staff deployed in back-office processing (for some banks, as
41. high as 40 per cent) as against a global best of 10 per cent observed by BCG. Process re-engineering and operating model change if employed could help reduce costs, improveservice, and contain operating risks. Public sector banks were found to be under-investing in technology with spends atabout 25 per cent of global benchmarks. An Indian banks average administrative overhead atabout 11 per cent of the total staff is in line with what BCG has observed globally. The banking industry was holding low headcount in HR and finance roles.Variable pay at 2 per cent of fixed compensation is far below the 12-15 per cent that isoptimal for incentive compensation. The public sector as per the report urgently needed anadjustment in its compensation structure. The industry has an impressive bad debtperformance and the bad debt levels in priority sectors of MSME and agriculture aresignificantly high.The report suggested major overhaul of NPA management processes at banks. Some bankshave alarmingly high NPA levels in relatively safe products such as home loans. The report stressed on a whole new paradigm for risk management encompassingoperating model, technology, experience and expertise retention, and minimum critical sizeof book.
42. 9. Banking Sector in India: Counting on Credit GrowthLeading Indian Banks by Assets and Market Capitalization Market Majority Asset Size StockBank Capitalization (in Shareholding (in$bllions) Listing $ Billions) Mumbai,State Bank of India Government 314 36.6 London Mumbai,ICICI Bank Private 81 25.6 New YorkPunjab National Government 66 7.6 MumbaiBankBank of Baroda Government 62 7.3 MumbaiBank of India Government 61 5.1 MumbaiCanara Bank Government 59 5.5 MumbaiIDBI Bank Government 52 2.9 MumbaiHDFC Bank Private 49 22.2 MumbaiUnion Bank of Government 43 3.7 MumbaiIndia Mumbai,Axis Bank Private 40 11.6 London
43. 10. Banking reformIndian banking has come a long way since India embarked on the reforms path about adecade-and-a-half ago in 1991-92. The reforms have unleashed tremendous change in thebanking sector. Today, Indian banks are as technology-savvy as their counterparts indeveloped countries. On the networking front, branch banking – the traditional forte, coupledwith ATM networks-the now imperative, have evolved to place the banking services on anew trajectory. The competitive forces have led to the emergence of Internet and mobilebanking too, to let banks attract and retain customers.The banking sector is also gearing up to embrace the Basel II regime, to benchmark with theglobal standards. Similarly, retail lending has emerged as another major opportunity forbanks. All these factors are driving up competition, which in turn forcing banks to innovate.A slew of innovative products, which could not be imagined even a couple of years ago, are areality now. Even mundane products like Saving Account, Personal Loans and Home Loanshave become subjects of innovation.1.First Banking Sector Reforms (1991)The Narasimham Committee had proposed wide-ranging reforms for:1. Improving the financial viability of the banks;2. Improving the macroeconomic policy framework for banks;3. Increasing their autonomy from government directions;4. Allowing a greater entry to the private sector in banking;5. Liberalizing the capital markets;6. Improvement in the financial health and competitive position of the banks;7. Furthering operational flexibility and competition among the financial institutions.A number of reforms initiatives have been taken to remove or minimize the distortionsimpinging upon the efficient and profitable functioning of banks. These include thefollowings:1. Reduction in SLR & CRR2. Transparent guidelines or norms for entry and exit of private sector banks
44. 3. Public sector banks have been allowed for direct access to capital markets4. The regulated interest rates have been rationalized and simplified.5. Branch licensing policy has been liberalized6. A board for Financial Bank Supervision has been established to strengthen the supervisorysystem of the RBI.These and other measures that have been taken would help the highly regulated and directedbanking system to transform itself into one characterized by openness, competition,prudential and supervisory discipline. They will also make the new challenges particularlythe growing demands from customers for high quality 56 services. The objective of this is tostudy, describe and analyze the impact of banking sector reforms on the performance ofcommercial banks. On the basis of the impact of these reforms, to suggest third new modifiedreforms in the changing scenario.2. Second Banking Sector Reforms (1998)By mid-1997, the RBI reported that the reform process had started yielding results. But asobserved by the NC in its second report, the improvement has arrested the deterioration of thesystem earlier but there is still a considerable distance to traverse. There has beenimprovement in several of the quantitative indices but there are many areas in whichweaknesses still persist. These include customer service, technological up gradation,improvement in house keeping in terms of reconciliation of entries and balancing of books.The second report was submitted on 23rd April, 1998, which sets the pace for the secondgeneration of banking sector reforms. These include:1. Merge strong banks, close weak banks unviable ones2. Two or three banks with international orientation, 8 to 10 national banks and a largenumber of local banks3. Increase Capital Adequacy to match enhanced banking risk4. Rationalize branches and staff, review recruitment5. De-politicize Bank Boards under RBI supervision6. Integrate NBFCs activities with banks.But many cities saw no purpose in setting up the second NC on banking sector reforms withinsix years and before the full implementation of the recommendations of the first report of
45. 1991. Strictly speaking, there were no new recommendations made in the second reportexcept two on:1. Merger of strong units of banks2. Adaptation of the ―narrow banking‖ concept to rehabilitate the weak banks.Various reform measures introduced in India have indeed strengthened the Indian bankingsystem in preparation for the global challenges ahead.Some of the reforms introduced and their impact on banks and furnished in the table (Indianbanking on the reforms path)After the brief introduction of theme, section II fixes the objectives, hypotheses andmethodology along with the database. Section III reviews the related studies and section IVhighlights the major issues faced by Indian banking sector. Section V analyses the results anddiscussions whereas section VII exhibits the future agenda for the third reforms andconcludes the paper.
46. 11 .Top Banking Companies in India • Banking in India began in the year 1786 with the establishment of the General Bank of India and later Bank of Hindustan came into existence. However, these two banks are not currently functioning in India. • At present, the oldest bank in India position is held by the State Bank of India, which came into existence in the year 1806. Now, not only public sector banks, but a number of private sector banks are also functioning in India. The list of leader in the banking sector is given below: • Top ten banks in India: • State Bank of India • HDFC Bank • Axis Bank • Bank of India • Punjab National Bank • Bank of Baroda • ICICI Bank Limited • Union Bank of India • Citibank • Canara Bank
47. 12.Top Private Banks in India • HDFC Bank • ICICI Bank • Axis Bank • Kotak Mahindra Bank • Yes Bank • ING Vysya Bank • IndusInd Bank • Dhanalakshmi Bank • Federal Bank • Jammu and Kashmir Bank • Lakshmi Vilas Bank
48. 13. Punch lines of banks in India 1. Union Bank of India -- Good people to bank with 2. Indian Overseas Bank -- Good people to grow with 3. Syndicate Bank -- Your Faithful and Friendly Financial Partner 4. Federal Bank -- Your Perfect Banking Partner 5. United Bank of India -- The Bank that begins with U 6. HDFC -- We Understand Your World 7. Bank Of Baroda -- Indias International Bank 8. Yes Bank -- Experience our expertise 9. Allahabad Bank -- A tradition of trust 10. Bank of India -- Relationships beyond Banking
49. 11. Oriental Bank of Commerce -- where every individual is committed12. Dena Bank -- Trusted Family Bank13. Indian Bank -- Taking Banking Technology to Common Man14. IDBI Bank -- Banking for all; not just for Big boys; "Aao Sochein Bada"15. Canara Bank -- its easy to change for those who you love; Together we can do...16. Vijaya Bank -- A Friend You can Bank Upon17. Punjab National Bank -- A Name you can Bank Upon18. Central Bank of India -- Build A Better Life Around Us19. J & K Bank -- Serving to Empower20. ICICI Bank -- "Hum Hai na..."21. Andhra Bank -- Much more to do. With YOU in focus22. Bank of Rajasthan -- Together we Prosper
50. 23. SBI Bank - Nations banks on us; Pure Banking Nothing Else; With you all theway.24. Lakshmi Vilas Bank -- The Changing Face of Prosperity25. UCO Bank -- Honours Your Trust26. Karur Vysya Bank -- Smart way to Bank27. South Indian Bank -- Experience Next Generation Banking
51. 14. CMDs & CEOs of Banks in India 2011 (As of 20.11.2011) SBI & Associates State Bank of India Pratip Chaudhuri, CMD State Bank of Bikaner And Shiv Kumar,MD Jaipur State Bank of Hyderabad M Bhagavantha Rao,MD State Bank of Mysore Dilip Mavinkurve,MD State Bank of Patiala Ashok Nayar,MD State Bank of Travancore P. Nanda Kumaran,MD Nationalised Banks Allahabad Bank J. P. Dua,CMD Andhra Bank R. Ramchandran,CMD Bank of Baroda M D. Mallya,CMD Bank of India Alok Kumar Mishra,CMD Bank of Maharashtra Anup Sankar Bhattacharya,CMD Canara Bank S Raman,CMD Central Bank of India M.V.Tanksale,CMD Corporation Bank Ajai Kumar,CMD Dena Bank Smt. Nupur Mitra,CMD IDBI Bank Ltd R. M. Malla,CMD
52. Indian Bank T. M. Bhasin,CMDIndian Overseas Bank M.Narendra,CMDOriental Bank of Commerce Nagesh Pydah,CMDPunjab And Sind Bank Devendra Pal Singh, IAS,CMDPunjab National Bank K. R. Kamath,CMDSyndicate Bank Basant Seth,CMDUCO Bank Arun Kaul,CMDUnion Bank of India M. V. Nair,CMDUnited Bank of India Bhaskar Sen,CMDVijaya Bank H.S Upendra Kamath,CMDPrivate BanksAxis Bank Smt. Shikha Sharma,MD & CEOCatholic Syrian Bank Shri.V.P Iswardas ,MD & CEOCity Union Bank Balasubramanian S,Development Credit Bank Murali M. Natrajan,MD & CEODhanalakshmi Bank Amitabh Chaturvedi,MD & CEOFederal Bank Shyam Srinivasan,MD & CEOHDFC Bank Adtya Puri, MD & CEOICICI Bank Smt Chanda Kochar, MD & CEOIndusind Bank Romesh Sobti, MD & CEOING Vysya Bank Shailendra Bhandari, MD & CEOJammu & Kashmir Bank Mushtaq Ahmad, MD & CEO
53. Karnataka Bank P. Jayarama Bhat, MD & CEOKarur Vysya Bank K. Venkataraman, MD & CEOKotak Mahindra Bank Uday Kotak , MDLakshmi Vilas Bank P.R. Somasundaram, MDNainital Bank Animesh Chauhan,Chairman CEORatnakar Bank Vishwavir Ahuja, MD & CEOSouth Indian Bank Dr.V.A.JOSEPH, MD & CEO Thiru A.K. Jagannathan, MD &Tamilnad Mercantile Bank CEO Rana Kapoor, Founder/MD &Yes Banks Ltd CEOForeign Banks : CountryHeads India Pramit Jhaveri, Citi CountryCity Bank Officer, India Naina Lal Kidwai,Country Head,HSBC Bank HSBC Sunil Kaushal, chief of IndiaStandard Chartered Bank operations
54. 15. Logos of bank in India
55. City union bank development credit bank
56. Nainital bank
57. 16. Merger &Acquisition of banks in India after 1991
58. 17. Career Opportunities in BankingBanking is one of the most sought after career choice among the students. It is an entry into awell paid, secure and status career. Though it may appear that these jobs are meant forcommerce/economics students but the fact is that majority of bank officers are from differentstreams of education. Further, it is also not a fact that top positions in Foreign/MultinationalBanks are held by MBAs from Premier Management Institutes. Though the Public sectorBanks are now appointing management graduates, CAs and CFAs but bright graduates fromany subject can get entry in the Public sector Banks through an All India Examinationconducted by them.The emergence of technology-driven new private banks have broadened the scope and rangeof banking service and entry of Financial Institutions are into the short-term lending business,is resulting in needs for more professionals. Now banks are in the mutual funds ,securitisation business credit cards, consumer loans, housing loans, housing loans besidestrading in gold and forex activities.Generally banks look for good communication skills, good interpersonal skills, the ability todeal with customers, an alert nature, and basic knowledge of the industry. However to joinforeign or private sector banks at higher than entry level one needs specialisation in somespecific areas. For example expertise in project analysis, credit appraisal skills, managinghuge loan portfolios general and foreign exchange and money .Good computer knowledge isalways preferred.There are front office personnel in all banks, and then there are supervisors who handle mostback office operations like completion of transactions, general ledger work, overallsupervision.Banks are now offering good salary packages. Most Public sector officers canbegin in the Rs 6000-8000 per month scale. MBAs recruited by private and foreign banks aregiven plum packages to the extent of about Rs 25000-30000 a month. Bank job Openings India
59. Indian professionals have many growth opportunities in the Banking Jobs in India Sector. With the right qualification, enthusiasm and dedication, Indian professionals have made an indelible impression on the global scenario. The Banking Jobs in India sector offers opportunities galore for Indian professionals. It has been predicted that the opportunities both on the national and global front, are going to increase specially for banking tellers and other administrative support International Banking Jobs. A study has projected that there will be an increase of 16 % between 2005 to 2012 in the employment in the International Banking Jobs sector. There will be a boom in the banking sector with the increase in thetechnology and population all over the world. Opportunities Galore In the banking sector, the bank personnel are employed at 2 levels : CLERICAL: This level entails the maintenance of the account books and the documents, and attend to customers at the counter. MANAGERIAL :The duties include organizing, controlling and supervising Bank Job Openings India activities and holding overall charge of one or more departments or branches.* Duties of workers in specialized areas are : Personnel - recruiting and training staff, planning career development of trainees, advising students about careers in banking; Marketing - designing campaigns to promote new and existing services, researching customers banking habits to find new opportunities for the bank; Operations - processing transactions and loans, researching new technology or different working methods to increase the banks efficiency; Electronic Services- writing a new section on the banks website, developing interactive digital TV banking services;
60. Card Services- authorizing and issuing cards, managing transactions; Credit and Risk- analyzing loans and deciding whether to approve them. The various Occupations in the Industry are : Management, business, and financial occupationsChief executivesGeneral and operations managersMarketing and sales managersComputer and information systems managersFinancial managersHuman resources, training, and labor relations specialistsManagement analystsAccountants and auditorsCredit analystsFinancial analystsPersonal financial advisorsLoan counselorsLoan officers
61. Professional and related occupations Computer programmers Computer software engineers Computer support specialists Computer systems analystsSales and related occupations Securities, commodities, and financial services sales agentsOffice and administrative support occupations First-line supervisors/managers of office and administrative support workers Bill and account collectors Bookkeeping, accounting, and auditing clerks Tellers Credit authorizers, checkers, and clerks Customer service representatives Loan interviewers and clerks New accounts clerks Executive secretaries and administrative assistants Secretaries, except legal, medical, and executive
62. Office clerks, generalThe Eligibility CriteriaThe international recruiters are very particular when it comes to qualifications. The candidateneeds to be a graduate from a wide range of degree subjects. For specialist roles within abank, a candidate could be a graduate in the following disciplines: Economics Business studies Banking and finance Financial services Computing.