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Indian banking system

P
Preet Gill

Indian Banking System

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INDIAN BANKING SYSTEM
PRESENTED BY :
Dr. MANPREET KAUR
Roadmap for Presentation
Introduction
Need of the Banks
Structure of Indian Banking system
Functions of Bank
What is Bank ?
A bank is a financial institution that
provides banking and other financial
services to their customers such as
accepting deposits and providing
loans.
What is Banking system ?
A banking system also referred as a
system provided by the bank which
offers cash management services for
Indian Banking System customers,
reporting the transactions of their
accounts and portfolios, through out
the day.
Need of the Banks
To provide the security to the
savings of customers.
 To control the supply of money and
credit.
To set equal norms and conditions
(i.e. rate of interest, period of
lending etc.) to all types of
customers.
STRUCTURE OF INDIAN
BANKING SYSTEM

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Indian banking system

  • 1. INDIAN BANKING SYSTEM PRESENTED BY : Dr. MANPREET KAUR
  • 2. Roadmap for Presentation Introduction Need of the Banks Structure of Indian Banking system Functions of Bank
  • 3. What is Bank ? A bank is a financial institution that provides banking and other financial services to their customers such as accepting deposits and providing loans.
  • 4. What is Banking system ? A banking system also referred as a system provided by the bank which offers cash management services for Indian Banking System customers, reporting the transactions of their accounts and portfolios, through out the day.
  • 5. Need of the Banks To provide the security to the savings of customers.  To control the supply of money and credit. To set equal norms and conditions (i.e. rate of interest, period of lending etc.) to all types of customers.
  • 8. RBI- Reserve Bank Of India  Reserve Bank of India is the Central Bank of our country. It was established on 1st April 1935  RBI performs various developmental and promotional functions.  It has given wide powers to supervise and control the banking structure.
  • 9. Scheduled banks  Banks that are included in the second schedule of the Reserve Bank of India Act, o Such a bank becomes eligible for debts/loans on bank rate from the RBI
  • 10. Non-scheduled banks All banks which are not included in the second section of the Reserve Bank of India Act, 1934 are Non- scheduled Banks
  • 11. Commercial Banks  Commercial bank is an institution that accepts deposit, makes business loans and offer other financial services to the customers  These institutions run to make profit.
  • 12. Public Sector Banks:  In Public Sector Banks the majority stake is held by the government.  After the recent amalgamation of smaller banks with larger banks, there are 12 public sector banks in India as of now.  An example of Public Sector Bank is State Bank of India.
  • 13. Private Sector Banks  Private Sector Banks are banks where the major stakes in the equity are owned by private stakeholders or business houses.  A few major private sector banks in India are HDFC Bank, Kotak Mahindra Bank, ICICI Bank etc.
  • 14. Foreign Bank  A Foreign Bank is a bank that has its headquarters outside the country but runs its offices as a private entity at any other location outside the country.  An example of Foreign Bank in India is Citi Bank.
  • 15. Regional Rural Banks  The aim of ensuring sufficient institutional credit for agriculture and other rural sectors.  RRBs are owned jointly by the Government of India, the State Government and Sponsor Banks.  An example of RRB in India is Arunachal Pradesh Rural Bank.
  • 16. Cooperative Bank  A Cooperative Bank is a financial entity that belongs to its members, who are also the owners as well as the customers of their bank.  Cooperative banks are the primary supporters of agricultural activities, some small-scale industries and self-employed workers.
  • 18. Primary Functions of Banks Accepting Deposits The bank collects deposits from the public. These deposits can be of different types, such as :-  Saving Deposits  Fixed Deposits  Current Deposits  Recurring Deposits
  • 19. Saving Deposits • This type of deposits encourages saving habit among the public. • The rate of interest is low. • Withdrawals of deposits are allowed subject to certain restrictions. • This account is suitable to salary and wage earners.
  • 20. Fixed Deposits • Lump sum amount is deposited at one time for a specific period. • Higher rate of interest is paid, which varies with the period of deposit. • Withdrawals are not allowed before the expiry of the period.
  • 21. Current Deposits • This type of account is operated by businessmen. • Withdrawals are freely allowed. • No interest is paid. • The account holders can get the benefit of overdraft facility.
  • 22. Recurring Deposits • This type of account is operated by salaried persons and petty traders. • A certain sum of money is periodically deposited into the bank. • Withdrawals are permitted only after the expiry of certain period. • A higher rate of interest is paid.
  • 23. Granting of Loans and Advances The bank advances loans to the business community and other members of the public. The rate charged is higher than what it pays on deposits. The types of bank loans and advances are :-  Overdraft  Cash Credits  Loans
  • 24. Secondary Functions of Banks Agency Functions The bank acts as an agent of its customers. The bank performs a number of agency functions which includes :-  Transfer of Funds  Collection of Cheques  Periodic Payments  Portfolio Management
  • 25. General Utility Functions The bank also performs general utility functions, such as :-  Locker Facility  Underwriting of Shares  Dealing in Foreign Exchange  Project Reports  Social Welfare Programmes