Commercial banks in india

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  • 1.   Commercial Banks are those profit seeking institutions which accept deposits from general public and advance money to individuals like household, entrepreneurs, businessmen etc. with the prime objective of earning profit in the form of interest, commission etc. Examples of commercial banks – ICICI Bank, State Bank of India, Axis Bank, and HDFC Bank
  • 2. Scheduled banks :- Banks which have been included in the Second Schedule of RBI Act 1934. They are categorized as follows: • Public Sector Banks :- E.g.. SBI, PNB, Syndicate Bank, Union Bank of India etc. • Private Sector Banks :- E.g.. ICICI Bank, IDBI Bank, HDFC Bank, AXIS Bank etc. • Foreign Banks :- E.g.. Citi Bank, Standard Chartered Bank, Bank of Tokyo Ltd. etc. Non scheduled banks :- Banks which are not included in the Second Schedule of RBI Act 1934.
  • 3. SBI and Associate Banks State Bank of India State Bank of Bikaner & Jaipur State Bank of Hyderabad State Bank of Mysore State Bank of Patiala State Bank of Travancore State Bank of Saurashtra (merged into SBI in 2008) State bank of Indore (merged into SBI in 2010)
  • 4.  Evolution Phase(Prior to 1948 ): ◦ Allahabad Bank set up in 1865 with European Mgt ◦ Oudh Commercial Bank (1881) was first bank established with Indian ownership and management. ◦ Ajodhya Bank in 1884 ◦ Punjab National Bank in 1894 ◦ Nedungadi Bank in 1899.
  • 5.  Foundation Phase (1948-1967) ◦ Banking Regulations Act passed in 1949. ◦ Transformation of Imperial Bank into State Bank of India. ◦ No of scheduled banks increased and non scheduled banks decreased.
  • 6.  Expansion Phase (1968-1984) ◦ Witnessed socialization of banking ◦ 14 banks nationalized in 1969 and 6 in 1980 ◦ Birth of Regional Rural Banks in 1975 and NABARD in 1982 which had priority sector as their focus of activity. ◦ No of scheduled banks increased upto 268 in 1984 and number of non scheduled banks came down from 210 to 4. ◦ Competitive efficiency of banks was low ◦ Customer service became least available commodity.
  • 7.  Consolidation Phase (1985-1990) ◦ Although the number of scheduled banks increased from 264 in 1984 to 276 in 1990, branch expansion of the banks slowed down. ◦ For the first time attention was paid to improving housekeeping, customer service, staff productivity and profitability of banks. ◦ There was no autonomy in vital decisions.
  • 8.  Reformatory Phase (1191-2000) ◦ Various macro level structural reformatory measures were undertaken in the fields of foreign trade, tax system, industrial policy and financial and other sectors. ◦ Too much expansion at too fast pace had left certain management areas weak. ◦ Overregulation leading to weakening of the management function.
  • 9.        1. 2. 3. 4. 5. 6. 7. Accepting deposits Giving loans Overdraft Discounting of Bills of Exchange Investment of Funds Agency Functions Miscellaneous Functions