This document provides an overview of banking concepts including: - The definition and types of banks, including their primary functions of accepting deposits and lending, as well as secondary functions like money transfers. - The Reserve Bank of India (RBI) is the central bank that manages monetary policy and the money supply through tools like the bank rate, cash reserve ratio (CRR), and statutory liquidity ratio (SLR). - Commercial banks facilitate credit creation in the economy by accepting deposits and offering loans under the regulatory framework established by the RBI.

1. A PRESENTATION ON
ENGINEERING ECONOMICS AND MANAGEMENT
DEPARTMENT OF CIVIL ENGINEERING
PARUL INSTITUTE OF ENGINEERING & TEC.
P.O.LIMDA,TA.WAGHODIA,DIST.BARODA.
PIN-391760,GUJRAT,INDIA
[2014-2015]

2. Banking

3.  WHAT IS BANKING ?
Simply we can say that banks are the
institutions which deals with the
transection of money.
A bank is a financial intermediary
which mobilizes the savings of surplus
sector and passes them over to the
deficit sectors.

4.  TYPES OF BANKS…
 As per RBI act Classifications,
i. Scheduled banks
ii. non-scheduled banks
 As per Sectoral Classification,
i. Public Sector banks
ii. Private Sector banks
iii. Operative banks
 As per scope of banking operations,
i. National Banks
ii. International banks

5.  FUNCTIONS OF BANKS...
Generally Banks Performs three
types of functions
1. Primary Functions
2. Secondary Functions
3. Ancillary Functions

6. •PRIMARY FUNCTIONS
The primary function of a bank is to
mobilize the surplus funds of the saving
sector whose consumption expenditure is less
than the income generated.
i.e.
 Acceptance of deposits
 Advances of Loans
 Bill Discounting
 Factoring & Forfeiting

7. •SECONDARY FUNCTIONS
The Secondary functions of the banks
are agency functions which they perform
on behalf of their clients and others.
i.e.
 Collection of Money
 Payment of Money
 Internet money transfer and e-banking
 Merchant banking
 Dematerialize Account Service

8. •ANCILLARY FUNCTIONS
It is the financial functions relating to
the money and credit management. These
are considered as fund base landing and
non-fund based financial services provided
to bank clients at nominal service charges.
i.e.
 Issue of bank drafts, pay orders , credit and
debit cards
 ATM facility
 Safe Deposit Vaults

9. CENTRAL BANK
It is an apex financial institution in the
country which is charged with the
responsibilities of managing the money
supply in the economy.
Money Supply is a macro variable
which is managed in the best interest of
the country.

10. RESERVE BANK OF INDIA [RBI]
RBI is a central bank of India which
manages the volume of credit through
the six monthly announcement of the
monetary policy.
It also reviews the mid term monetary
position every three months in July and
December.

11. BANKING CONCEPTS
The role of the Central bank and the
networking of the commercial banks is
crucial.RBI manages the currency supply
and the credit creation by the
commercial banks.
Bank Rate, Cash reserve Ratio,
Statutory Liquidity Ratio, Repo and
Reserve Repo, etc are some of its basic
concepts

12. Bank Rate
It is the interest rate charged by the needy
commercial banks against the gilt edged financial
assets.
Cash Reserve Ratio [CRR]
CRR refers to an obligation on the part of the
commercial banks which mobilizes the deposits
from the house hold to corporate sector.

13. Statutory Liquidity Ratio [SLR]
The SLR is the supplement to the CRR.
Increase of Decrease of SLR percentage
decreases or increases the liquidity of the bank
respectively.
Repo
Some banks invests their funds in such
securities as a part of their treasury function.
This depositing of such securities against cash is
known as repo

14. THANK YOU….