Download to read offline
Uploaded bydepartment of economics and statistic
Bankink
The document provides an overview of the banking structure and financial reforms in India. It discusses the meaning and functions of banks, the components of the financial system, and the various types of commercial and non-banking financial institutions in India. It then summarizes the history of banking in India and the key stages of development. Finally, it outlines the major regulations and laws governing the financial sector and provides details on the current banking structure, including public and private sector banks and foreign banks.
More Related Content
Bankink
- 1. Banking Structure andFinancial Refoms In India
- 2. Meaning of Bank #Bank is a lawful organization, which accepts deposits that can be withdrawn on demand. It also lends money to individuals and business housesthat need it.
- 3. Financial System An institutionalframework existing in a country to enable financial transactions. Three main parts Financial assets (loans, deposits, bonds, equities, etc.) Financial institutions (banks, mutual funds, insurance companies, etc.) Financial markets (money market, capital market, forex market, etc.)
- 4. Commercial banks a. Public sector b.Private sector c. Foreign banks d. Cooperative institutions (i) Urban cooperative banks (ii) State cooperative banks (iii) Central cooperative banks Financial institutions a. All-India financial institutions (AIFIs) b. State financial corporation’s (SFCs) c. State industrial development corporations (SIDCs) Nonbanking financial companies (NBFCs) Capital market intermediaries Financial Structure
- 5. Functions of Bank •Accepting deposits from Public • Lending money to public • Collection Business • Keeping valuables in safe custody • Government business • Acting as trustee • Treasury services • Capital Market activity
- 6. History of Bankingin India
- 7. The reminisce ofbanking in India can be traced back to the 4th century BC in the 'Kautilya Arthashastra‘. However the real roots of commercial banking in India can be traced back to the early eighteenth century. Bank of Hindustan was set up in 1870,it was the earliest Indian Bank. Later, three presidency banks under Presidency Bank's act 1876 i.e. Bank of Calcutta, Bank of Bombay and Bank of Madras were set up, which laid foundation for modern banking in India In 1921, all presidency banks were amalgamated to form the Imperial Bank of India.
- 8. The first bankwhich was exclusively set up by Indians was Allahabad Bank, followed by Punjab National Bank Ltd. set up in 1895 with headquarters at Lahore The Reserve Bank of India was established on April 1, 1935 to control & regulate these banks in accordance with the provisions of the Reserve Bank of India Act, 1934. In 1955, RBI acquired control of the Imperial Bank of India, which was renamed as State Bank of India. In 1959, SBI took over control of eight private banks . The plan for nationalization was passed in1968. Thus forming the third turning point in the history of Indian Banking in India. The Narasimha Committee report suggested wide ranging reforms for the banking sector in 1992 to introduce internationally accepted banking practices. The amendment of Banking Regulation Act in 1993 saw the entry of new private sector banks. private sector banks.
- 9. Regulates the FinancialSector in India Ministry of Finance • Controls and assists the financial sector • Every year the finance minister announces the budget • Also acts as the policy maker and regulates the financial sector Reserve Bank of India • Apex Financial Institution of India, established in April 1935 • Advises the central board on various matters • Acts as the investment banker to the Government Securities and Exchange Board of India • Regulator of securities market in India • Protects the interest of investors in securities • Also regulates the development of securities market Insurance Regulatory and Development Authority • An agency of the Government, based in Hyderabad • It works on the guidelines of IRDA Act, 1999 • Safeguards the interest of the common man
- 10. Some other Lawsrelated to Banking Sector Other Acts Companies Act (1956) Banking Companies Act Negotiable Instruments Act (1881) SARFAESI act (2002) Bankers’ Books Evidence Act (1891) Regional Rural Bank Act (1976) SBI Act (1955)
- 11. Banking Structure inIndia
- 12. Indian Financial System–Share by Asset Size - 2013 Segment Market Share of Financial Assets (%) Banks 63 Insurance Companies 19 Non-Banking Financial Institutions 8 Mutual Funds 6 Provident and Pension Funds 4 Indian Banking System – Share by Asset Size - 2013 Institutions Market Share of Banking Assets (%) Scheduled Commercial Banks 92.4 Public Sector Banks 67.2 Private Sector Banks 18.7 Foreign Banks 6.5 Regional Rural Bank 2.7 Co-operative Banks 3.4 Local Area Banks 1.5 Banks dominate the Indian Financial System The Banking System is dominated by Commercial Banks
- 13. Share in theBanking Space Type of Banks Number of Banks Number of Branches %age Share of Number of Branches Market Share of Assets (%) Public Sector 26 67,466 83.0 72.8 Private Sector 20 13,452 16.6 20.2 Foreign Banks 41 323 0.4 7.0 Total 87 81,241 100.0 100.0 Public sector banks have more presence relative to their share of assets.
- 14. Types of Banks CentralBank (RBI) Non Banking Finance Companies (NBFCs) Commercial Banks Term Financial Institutions State Finance Corporations (SFCs) Indian Financial Institutions E.g. IFCI NABARD SIDBI Public Sector Private Sector Foreign Co-operative Banks Regional Rural Banks E.g. SBI PNB BOB E.g. HDFC Bank UTI Bank ICICI Bank E.g. Citibank ABN Amro HSBC State/Central Private Primary Credit Societies
- 15. Loan Products • AutoLoan • Gold Loan • House Loan • Credit cards • Education Loan • Loan against Securities • Retail Banking Business Deposit Products • Deposits • Saving Accounts • Current Accounts • Fixed / Recurring • Corporate Salary A/C Other Products/Services • NRI services • POS Terminals • Private Banking • Demat Services • Mutual Fund Sales • Foreign Exchange Services Commercial Banking • Term Loan • Guarantees • Bill Collection • Letter of Credit • Working Capital • Forex & Derivatives • Wholesale Deposits Transaction Banking • Cash Management • Custodian Services • Clearing Bank Services • Tax Collections • Banker to Public Issues Commodities(Inc Hedging) Key Segment • Large Corporate • Emerging Corporate • Financial Institutions • Government/PSUs • Agriculture Commodities Product Segment • Equities • Derivatives • Capital Market • Debt Securities • Foreign Exchange Other Financing • Cash Management • Statutory Reserve • Financial Decisions • Asset Liability Management Retail Banking1 Wholesale Banking2 Treasury Banking3 WORKING
- 16. Analysis of PreviousData • Since nationalization of 14 major commercial banks in 1969, followed by nationalization of another 6 banks in 1980, Indian banking system has expanded rapidly. • The number of bank offices increased from about 8,000 in 1969 to over 100,000 by 2014. • The average population per branch office has from 64,000 in 1969 to 13,000 today. • Both per capita deposit and per capita credit have expanded about 600 times.
- 17. Bank Credit GrowthCompared with Economic and Banking aggregates
- 18. Key Player inIndian Banking Sector Public sector banks Allahabad Bank Andhra Bank Bank of Baroda Bank of India Bank of Maharashtra Canara Bank Central Bank of India Corporation Bank Dena Bank IDBI Bank Ltd Indian Bank Indian Overseas bank Oriental Bank of Commerce Punjab & Sindh Bank Punjab National Bank State Bank of India State Bank of Bikaner & Jaipur State Bank of Hyderabad State Bank of Indore State Bank of Mysore State Bank of Patiala State Bank of Travancore UCO Bank Syndicate Bank
- 19. Private banks • AxisBank • Bank of Rajasthan • Catholic Syrian Bank • City Union Bank • Development Credit Bank • Dhanalakshmi Bank • Federal Bank • HDFC Bank • ICICI Bank • IndusInd Bank • ING Vysya Bank • Jammu & Kashmir Bank • Karnataka Bank • Karur Vysya Bank • Kotak Mahindra Bank • Lakshmi Vilas Bank • Nainital Bank • Ratnakar Bank • SBI Comm& Intl Bank • South Indian Bank • Tamil Nadu Mercantile Bank • Yes Bank
- 20. Foreign banks • TheRoyal Bank of Scotland • Abu Dhabi Commercial Bank • American Express Banking • Corporation • Antwerp Diamond Bank • AB Bank • Bank International Indonesia • Bank of America • Bank of Bahrain & Kuwait • Bank of Ceylon • Bank of Nova Scotia • Bank of Tokyo Mitsubishi UFJ • Barclays Bank • BNP Paribas • Calyon Bank • Chinatrust Commercial Bank • Citibank • DBS Bank • Deutsche Bank • Hongkong & Shanghai Banking Corpn • JP Morgan Chase Bank • JSC VTB Bank • Krung Thai Bank • Mizuho Corporate Bank • Mashreq Bank
- 21. Different stages ofdevelopments • From 1786 till today, the journey of Indian Banking System can be segregated into three distinct phases. They are as mentioned below: • Early phase from 1786 to 1969 of Indian Banks.Phase-I • Nationalization of Indian Banks and up to 1991 prior to Indian banking sector Reforms.Phase-II • New phase of Indian Banking System with the arrival of Indian Financial & Banking Sector Reforms after 1991. Phase-III
- 22. Innovation in theBanking Industry Biometric ATM’s • These ATMs use the finger print of the card holder or eye retina scan as a PIN for verification purpose • Banks are more focused to put these ATMs in rural areas because biometrics makes it possible for the low literacy population to use banks M-Pesa • M-pesa is a mobile-phone based money transfer and micro financing service, which allows users with a national ID to use their money easily with a mobile • Vodafone is expected to launch M-pesa in India, in association with ICICI & HDFC bank Plastic Money • Plastic money, cash cards, credit/debit cards and polymer notes will boom as the e-commerce space boom in India and people get used to the idea of carrying less cash • Many cards have a micro chip embedded in them which makes it a transit card also Virtual Banking • This technology will have a deep impact on the lives of professionals who believe in the life-on-the-go approach • A user can have access to his/her bank accounts at a nominal cost and at a fast speed from anywhere in the world
- 23.
Editor's Notes
- #15 Scheduled commercial Banks constitute those banks which have been included in the Second Schedule of Reserve Bank of India (RBI) Act, 1934. For the purpose of assessment of performance of banks, the Reserve Bank of India categorise them as public sector banks, old private sector banks, new private sector banks and foreign banks.