Modern banking in India began with the establishment of three presidency banks in the early 19th century under British rule. These banks later merged to form the Imperial Bank of India in 1921. Following independence and the goal of increasing rural credit, the State Bank of India was established in 1955. Major banking reforms began in 1991 to liberalize and open the sector to competition. Reforms led to significant growth and changes, including the establishment of new private banks. Today the banking industry is categorized into various groups including nationalized banks and private sector banks.
The document provides an overview of the Indian banking system and Canara Bank. It discusses the history and evolution of banking in India through various phases from 1950s to present day. It describes the key entities that make up the Indian banking structure including the Reserve Bank of India, commercial banks, cooperative banks, and foreign banks. It then profiles Canara Bank, outlining its founding in 1906, growth after nationalization in 1969, expansion across India, and focus on customer service and rural development in line with its founding principles.
Report 2 - Indian Banking system & EvolutionSudiksha Joshi
This document provides an overview of the evolution and reforms of the Indian banking system. It discusses the system in 5 phases from pre-independence to post-liberalization. Some key points:
- The system grew slowly pre-independence and was influenced by commercial principles.
- Post-independence saw nationalization of SBI in 1955 and its subsidiaries in 1969 to bolster priority sector lending.
- The 1969-1985 period saw rapid branch expansion especially in rural areas, increasing deposits and credit. However, problems with asset quality and profitability emerged.
- 1985-1991 focused on consolidation through improving operations and relaxing regulations.
- Post-1991 reforms aimed to increase competition and
Evolution of banks & phases of developmentsankrityayan
The document discusses the evolution of banks in India from ancient times to the present. It outlines the major phases of development: 1) In ancient India, the Vedas first mentioned usury. 2) In the medieval era, loan deeds called dastawez were used. 3) Under British rule, the Union Bank of Calcutta was established in 1829 as the first joint stock bank. 4) After independence, most banks were nationalized in 1969. 5) Today, banking in India includes both nationalized banks and new private banks, with over 100,000 branches serving customers across the country.
The document provides a history and overview of the banking industry in India. It discusses the origins and nationalization of major banks in India in the 20th century. It then summarizes the emergence of private sector banks in India in the 1990s after economic liberalization. The document concludes by providing details on the top 10 banks in India by market capitalization, total assets, employee costs, and customer understanding. It also provides brief overviews of major banks in India such as State Bank of India, HDFC Bank, ICICI Bank, Axis Bank, and others.
India's banking sector is booming, with many banks focusing on retail customers by offering internet, phone, and mobile banking services. This has helped banks tap into India's growing middle class. The sector has seen proliferation of new services and adoption of technologies like ATMs, telephone banking, and online banking. Nationalization in 1969 led to increased branches and higher deposits and loans over time.
Banks and NBFCs: Types of Banks & NBFCs: Central Bank, Nationalized & Co Operative Banks, Regional Rural
Banks, Scheduled Banks, Private Banks & Foreign Banks, Mudra Bank, Small Finance Banks, Specialized Banks, NBFCs.
Types of Banking: Wholesale and Retail Banking, Investment Banking, Corporate Banking, Private Banking, Development
Banking.
The document provides an overview of the banking industry, including its evolution and history. It discusses how banking originated in temples and palaces as safe places to store gold and other valuables. It then outlines the emergence of early banks like merchant banks in medieval times and the formalization of banking within distinct buildings by the Romans. The document also summarizes the nature, trends, and federal regulation of the modern banking industry.
The document provides an overview of the Indian banking system and Canara Bank. It discusses the history and evolution of banking in India through various phases from 1950s to present day. It describes the key entities that make up the Indian banking structure including the Reserve Bank of India, commercial banks, cooperative banks, and foreign banks. It then profiles Canara Bank, outlining its founding in 1906, growth after nationalization in 1969, expansion across India, and focus on customer service and rural development in line with its founding principles.
Report 2 - Indian Banking system & EvolutionSudiksha Joshi
This document provides an overview of the evolution and reforms of the Indian banking system. It discusses the system in 5 phases from pre-independence to post-liberalization. Some key points:
- The system grew slowly pre-independence and was influenced by commercial principles.
- Post-independence saw nationalization of SBI in 1955 and its subsidiaries in 1969 to bolster priority sector lending.
- The 1969-1985 period saw rapid branch expansion especially in rural areas, increasing deposits and credit. However, problems with asset quality and profitability emerged.
- 1985-1991 focused on consolidation through improving operations and relaxing regulations.
- Post-1991 reforms aimed to increase competition and
Evolution of banks & phases of developmentsankrityayan
The document discusses the evolution of banks in India from ancient times to the present. It outlines the major phases of development: 1) In ancient India, the Vedas first mentioned usury. 2) In the medieval era, loan deeds called dastawez were used. 3) Under British rule, the Union Bank of Calcutta was established in 1829 as the first joint stock bank. 4) After independence, most banks were nationalized in 1969. 5) Today, banking in India includes both nationalized banks and new private banks, with over 100,000 branches serving customers across the country.
The document provides a history and overview of the banking industry in India. It discusses the origins and nationalization of major banks in India in the 20th century. It then summarizes the emergence of private sector banks in India in the 1990s after economic liberalization. The document concludes by providing details on the top 10 banks in India by market capitalization, total assets, employee costs, and customer understanding. It also provides brief overviews of major banks in India such as State Bank of India, HDFC Bank, ICICI Bank, Axis Bank, and others.
India's banking sector is booming, with many banks focusing on retail customers by offering internet, phone, and mobile banking services. This has helped banks tap into India's growing middle class. The sector has seen proliferation of new services and adoption of technologies like ATMs, telephone banking, and online banking. Nationalization in 1969 led to increased branches and higher deposits and loans over time.
Banks and NBFCs: Types of Banks & NBFCs: Central Bank, Nationalized & Co Operative Banks, Regional Rural
Banks, Scheduled Banks, Private Banks & Foreign Banks, Mudra Bank, Small Finance Banks, Specialized Banks, NBFCs.
Types of Banking: Wholesale and Retail Banking, Investment Banking, Corporate Banking, Private Banking, Development
Banking.
The document provides an overview of the banking industry, including its evolution and history. It discusses how banking originated in temples and palaces as safe places to store gold and other valuables. It then outlines the emergence of early banks like merchant banks in medieval times and the formalization of banking within distinct buildings by the Romans. The document also summarizes the nature, trends, and federal regulation of the modern banking industry.
The document summarizes the history of banking in India in 3 phases: (1) pre-independence with the establishment of presidency banks, (2) post-independence which saw nationalization of SBI and other banks, and (3) post-1991 reforms with liberalization and introduction of new technologies. Key events included the establishment of RBI in 1935, nationalization acts of 1969 and 1980, and 1991 reforms following the Narasimham Committee recommendations which opened the sector to competition and modernization.
Banking originated in India in the early 1700s with the establishment of the Bank of Bombay in 1720 and the Bank of Hindustan in 1770. The first 'Presidency bank' was the Bank of Bengal, established in 1806. Over subsequent decades, the Bank of Bombay and Bank of Madras were also established as Presidency banks. In the early 20th century, the Imperial Bank of India was formed through the amalgamation of the Presidency banks. The Reserve Bank of India was established in 1935 to regulate the banking sector. After independence in 1947, the State Bank of India was nationalized. Further nationalization occurred in 1969 with 14 major private banks being taken over by the government.
Banking originated in India in the late 18th century with the Bank of Hindustan and General Bank of India. The State Bank of India, formed in 1955 from three banks merging in 1921, is the oldest and largest bank still in existence today. Banking in India went through several eras - under colonial rule from the 1820s-1940s, it was primarily private banks. In 1949, the Reserve Bank of India was established and 14 largest commercial banks were nationalized in 1969. Six more banks were nationalized in 1980. Liberalization in the 1990s allowed new private banks to open.
This document provides a brief history of banking in India from ancient times to modern times. It discusses the origins of indigenous banking systems as well as the establishment of western-style commercial banks starting in the 18th century under British rule. It then summarizes the key events in the nationalization of banks in India in 1955, 1969, 1980 which brought most of the banking sector under public/government ownership. The creation of the Reserve Bank of India in 1935 to act as the central bank is also highlighted.
This document provides a history of banking in India from ancient times to the present. It discusses the evolution of banking practices in India prior to independence, including indigenous banking systems. It then outlines the major developments in the Indian banking sector post-independence, including the nationalization of banks in 1969 and 1980, and the financial sector reforms that began in the early 1990s. The document also provides brief descriptions of the Reserve Bank of India and the classification of banks in India's organized and unorganized banking sectors.
The document provides an overview of the banking sector in India across four phases of development:
1) Phase I from 1860-1946 saw the establishment of banks on western models and the creation of the Reserve Bank of India in 1935.
2) Phase II from 1947-1968 included the nationalization of the State Bank of India and its associates in 1955. The number of bank branches expanded significantly.
3) Phase III from 1969-1990 was marked by the nationalization of 14 major commercial banks in 1969 and 6 more in 1980. Priority sector lending was introduced to promote development.
Banks and NBFCs: Types of Banks & NBFCs: Central Bank, Nationalized & Co Operative Banks, Regional Rural
Banks, Scheduled Banks, Private Banks & Foreign Banks, Mudra Bank, Small Finance Banks, Specialized Banks, NBFCs.
Types of Banking: Wholesale and Retail Banking, Investment Banking, Corporate Banking, Private Banking, Development
Banking.
Indian banking sector has grown at a healthy pace over the past decade. Total credit off-take has increased at a CAGR of 10.94% during FY07-18 reaching $1,299 billion as of Q3 FY19. Total deposits have grown at a CAGR of 11.66% during the same period reaching $1,866 billion as of Q3 FY19. The assets base of banks across sectors continues to expand with total banking sector assets growing at a CAGR of 7.01% during FY13-18 to reach $2,358 billion in FY18. Notable trends in the banking industry include improved risk management practices, growing digitalization, and rising
Today, the banking industry in our country is stronger and capable of withstanding the pressures of competition. It withstood Global Financial Crisis (2008). In the era of Globalization Banking Sector in India is rapidly changing since 1990s due to technological innovation, financial liberalization with entry of new private and foreign banks, and regulatory changes in the corporate sector. Indian banking industry is gradually moving towards adopting the best practices in accounting, internationally accepted prudential norms, with higher disclosures and transparency, corporate governance and risk management, interest rates have been deregulated, while the rigour of directed lending is being progressively reduced. In our country, currently we are having a fairly well developed banking system with different classes of banks – public sector banks, foreign banks, private sector banks – both old and new generation, regional rural banks and co-operative banks with the Reserve Bank of India as the leader of the system. In the banking field, there has been an unprecedented growth and diversification of banking industry and our banks are now utilizing the latest technologies like internet and mobile devices to carry out transactions and communicate with the masses.
The banking system in India has evolved significantly over time and plays a key role in the country's economic development. It began with the establishment of banking companies during British rule in the late 18th century. After independence in 1947, the government nationalized several banks to increase access to rural populations and priority sectors. Major reforms in the 1990s liberalized the system by allowing more private and foreign banks, making banks more competitive and progressive. Today, India has a large, growing, and diverse banking industry that continues to contribute to the country's economic growth.
The document provides an overview of the Indian banking industry, including its historical development, current state, and future outlook. It discusses the nationalization of banks in 1969 and 1980, the introduction of private sector banks in 1993, and the liberalization of the banking sector in the 1990s. It also summarizes the aggregate performance of the industry in terms of deposits, credit growth, and earnings. Looking ahead, it forecasts continued consolidation in the banking sector and a greater focus on retail banking and technology.
The document summarizes the history of banking in India. It discusses how banking originated in India during the Vedic period through money lending activities. It then outlines the key developments in Indian banking, including the establishment of the earliest joint-stock banks in the late 18th century, the establishment of presidency banks by the East India Company in the early 19th century, the creation of the Reserve Bank of India in 1935, the nationalization of banks in 1969, and the liberalization of the banking sector beginning in 1993 that allowed new private banks to form. The document also provides an overview of the key phases in the computerization and modernization of Indian banking from the 1970s to the early 2000s.
This document provides an overview of the history and development of banking in India. It discusses how the earliest banks originated in the late 18th century, and how foreign banks started establishing branches in India in the 1860s, with Calcutta becoming an important banking center. The document outlines the nationalization of India's banks in 1969 and 1980, and the subsequent liberalization of the banking sector in the 1990s with the introduction of private banks. It also provides context on the current state of India's banking industry and expected future growth.
The banking system in India has evolved over centuries from money lending practices in ancient times to a modern system with widespread reach. It has undergone 3 major phases of development: [1] Early phase from 1786 to 1969 saw the establishment of the first banks; [2] Nationalization phase from 1969-1991 where government took control of banks; [3] Post-1991 liberalization phase introduced reforms and new private and foreign banks. Today the system includes public, private, foreign and cooperative banks serving both urban and rural areas across the country.
The document summarizes the evolution of banking in India over different phases:
Phase I saw the slow growth of banks with the establishment of the first bank in India in 1786 and the Reserve Bank of India in 1935. Phase II brought nationalization of SBI and other banks in 1955-1960. Phase III saw further nationalization of 14 banks in 1969. Phase IV began banking reforms after 1991, allowing new private banks and more foreign investment and competition. Today, Indian banking utilizes modern technology and aims to further financial inclusion.
This document provides an overview of the history and development of banking in India from 1786 to present day. It discusses the early foundations of banking during British rule through institutions like the Bank of Bengal and Bombay. It then covers the periods of nationalization in 1969 and 1980 when the government took control of major private banks. The document also summarizes key banking reforms since the 1990s that liberalized and opened the industry to competition through policies like universal banking and proposed amendments to banking laws.
For updated information, please visit www.ibef.org February 2018
BANKING
[1] The Indian banking sector has grown at a healthy pace over the past decade, with total credit increasing at a CAGR of 12.38% during FY07-17 and total deposits increasing at a CAGR of 10.08% during the same period.
[2] Total banking sector assets have increased at a CAGR of 8.83% to US$ 2.202 trillion during FY13–17, with assets of public sector banks growing at 7.43% CAGR and private sector banks growing at 14.44% CAGR.
[3]
This document provides an overview of the banking system and monetary policy in India. It discusses the structure of the banking system including the roles of the Reserve Bank of India, scheduled banks, cooperative banks, and commercial banks. It also lists the major public sector and private sector banks. The document then explains the functions and instruments of monetary policy used by the RBI, including open market operations, bank rate, cash reserve ratio, and statutory liquidity ratio. Finally, it briefly discusses fiscal policy and compares the key differences between fiscal and monetary policy.
The document provides an overview of the banking system in India. It discusses the origins and evolution of banking in India from money lenders to the establishment of the Reserve Bank of India in 1935. Key events include the nationalization of major private banks in 1969 and 1980 to promote financial inclusion and priority sector lending. The banking sector was further reformed in the 1990s on the recommendations of the Narasimham Committee, liberalizing and opening the sector to private and foreign banks. Today the Indian banking sector is dominated by public sector, private sector, and foreign banks and has grown but still faces challenges of furthering financial inclusion across India.
This document provides an overview of the history and development of banking in India. It discusses 3 phases: the early phase from 1786 to 1969 which saw the establishment of the first banks but also failures; the nationalization phase from 1969 to 1991 where the government took control of private banks; and the new post-1991 phase of reforms and liberalization. It also describes the current banking structure in India including scheduled commercial banks, cooperative banks, and regional rural banks. Overall it traces the evolution of banking in India from its beginnings to the present system.
Comparison between public sector & private sectorDharmik
The document provides an overview of public sector and private sector banks in India. It discusses that scheduled commercial banks in India are categorized into five groups according to ownership, including public sector banks, private sector banks, and foreign banks. Public sector banks are majority owned by the government, while private sector banks were established to better serve economic needs as public sector banks lacked profit incentives. The document then provides details on the functions of public and private sector banks in India.
The document summarizes the history of banking in India in 3 phases: (1) pre-independence with the establishment of presidency banks, (2) post-independence which saw nationalization of SBI and other banks, and (3) post-1991 reforms with liberalization and introduction of new technologies. Key events included the establishment of RBI in 1935, nationalization acts of 1969 and 1980, and 1991 reforms following the Narasimham Committee recommendations which opened the sector to competition and modernization.
Banking originated in India in the early 1700s with the establishment of the Bank of Bombay in 1720 and the Bank of Hindustan in 1770. The first 'Presidency bank' was the Bank of Bengal, established in 1806. Over subsequent decades, the Bank of Bombay and Bank of Madras were also established as Presidency banks. In the early 20th century, the Imperial Bank of India was formed through the amalgamation of the Presidency banks. The Reserve Bank of India was established in 1935 to regulate the banking sector. After independence in 1947, the State Bank of India was nationalized. Further nationalization occurred in 1969 with 14 major private banks being taken over by the government.
Banking originated in India in the late 18th century with the Bank of Hindustan and General Bank of India. The State Bank of India, formed in 1955 from three banks merging in 1921, is the oldest and largest bank still in existence today. Banking in India went through several eras - under colonial rule from the 1820s-1940s, it was primarily private banks. In 1949, the Reserve Bank of India was established and 14 largest commercial banks were nationalized in 1969. Six more banks were nationalized in 1980. Liberalization in the 1990s allowed new private banks to open.
This document provides a brief history of banking in India from ancient times to modern times. It discusses the origins of indigenous banking systems as well as the establishment of western-style commercial banks starting in the 18th century under British rule. It then summarizes the key events in the nationalization of banks in India in 1955, 1969, 1980 which brought most of the banking sector under public/government ownership. The creation of the Reserve Bank of India in 1935 to act as the central bank is also highlighted.
This document provides a history of banking in India from ancient times to the present. It discusses the evolution of banking practices in India prior to independence, including indigenous banking systems. It then outlines the major developments in the Indian banking sector post-independence, including the nationalization of banks in 1969 and 1980, and the financial sector reforms that began in the early 1990s. The document also provides brief descriptions of the Reserve Bank of India and the classification of banks in India's organized and unorganized banking sectors.
The document provides an overview of the banking sector in India across four phases of development:
1) Phase I from 1860-1946 saw the establishment of banks on western models and the creation of the Reserve Bank of India in 1935.
2) Phase II from 1947-1968 included the nationalization of the State Bank of India and its associates in 1955. The number of bank branches expanded significantly.
3) Phase III from 1969-1990 was marked by the nationalization of 14 major commercial banks in 1969 and 6 more in 1980. Priority sector lending was introduced to promote development.
Banks and NBFCs: Types of Banks & NBFCs: Central Bank, Nationalized & Co Operative Banks, Regional Rural
Banks, Scheduled Banks, Private Banks & Foreign Banks, Mudra Bank, Small Finance Banks, Specialized Banks, NBFCs.
Types of Banking: Wholesale and Retail Banking, Investment Banking, Corporate Banking, Private Banking, Development
Banking.
Indian banking sector has grown at a healthy pace over the past decade. Total credit off-take has increased at a CAGR of 10.94% during FY07-18 reaching $1,299 billion as of Q3 FY19. Total deposits have grown at a CAGR of 11.66% during the same period reaching $1,866 billion as of Q3 FY19. The assets base of banks across sectors continues to expand with total banking sector assets growing at a CAGR of 7.01% during FY13-18 to reach $2,358 billion in FY18. Notable trends in the banking industry include improved risk management practices, growing digitalization, and rising
Today, the banking industry in our country is stronger and capable of withstanding the pressures of competition. It withstood Global Financial Crisis (2008). In the era of Globalization Banking Sector in India is rapidly changing since 1990s due to technological innovation, financial liberalization with entry of new private and foreign banks, and regulatory changes in the corporate sector. Indian banking industry is gradually moving towards adopting the best practices in accounting, internationally accepted prudential norms, with higher disclosures and transparency, corporate governance and risk management, interest rates have been deregulated, while the rigour of directed lending is being progressively reduced. In our country, currently we are having a fairly well developed banking system with different classes of banks – public sector banks, foreign banks, private sector banks – both old and new generation, regional rural banks and co-operative banks with the Reserve Bank of India as the leader of the system. In the banking field, there has been an unprecedented growth and diversification of banking industry and our banks are now utilizing the latest technologies like internet and mobile devices to carry out transactions and communicate with the masses.
The banking system in India has evolved significantly over time and plays a key role in the country's economic development. It began with the establishment of banking companies during British rule in the late 18th century. After independence in 1947, the government nationalized several banks to increase access to rural populations and priority sectors. Major reforms in the 1990s liberalized the system by allowing more private and foreign banks, making banks more competitive and progressive. Today, India has a large, growing, and diverse banking industry that continues to contribute to the country's economic growth.
The document provides an overview of the Indian banking industry, including its historical development, current state, and future outlook. It discusses the nationalization of banks in 1969 and 1980, the introduction of private sector banks in 1993, and the liberalization of the banking sector in the 1990s. It also summarizes the aggregate performance of the industry in terms of deposits, credit growth, and earnings. Looking ahead, it forecasts continued consolidation in the banking sector and a greater focus on retail banking and technology.
The document summarizes the history of banking in India. It discusses how banking originated in India during the Vedic period through money lending activities. It then outlines the key developments in Indian banking, including the establishment of the earliest joint-stock banks in the late 18th century, the establishment of presidency banks by the East India Company in the early 19th century, the creation of the Reserve Bank of India in 1935, the nationalization of banks in 1969, and the liberalization of the banking sector beginning in 1993 that allowed new private banks to form. The document also provides an overview of the key phases in the computerization and modernization of Indian banking from the 1970s to the early 2000s.
This document provides an overview of the history and development of banking in India. It discusses how the earliest banks originated in the late 18th century, and how foreign banks started establishing branches in India in the 1860s, with Calcutta becoming an important banking center. The document outlines the nationalization of India's banks in 1969 and 1980, and the subsequent liberalization of the banking sector in the 1990s with the introduction of private banks. It also provides context on the current state of India's banking industry and expected future growth.
The banking system in India has evolved over centuries from money lending practices in ancient times to a modern system with widespread reach. It has undergone 3 major phases of development: [1] Early phase from 1786 to 1969 saw the establishment of the first banks; [2] Nationalization phase from 1969-1991 where government took control of banks; [3] Post-1991 liberalization phase introduced reforms and new private and foreign banks. Today the system includes public, private, foreign and cooperative banks serving both urban and rural areas across the country.
The document summarizes the evolution of banking in India over different phases:
Phase I saw the slow growth of banks with the establishment of the first bank in India in 1786 and the Reserve Bank of India in 1935. Phase II brought nationalization of SBI and other banks in 1955-1960. Phase III saw further nationalization of 14 banks in 1969. Phase IV began banking reforms after 1991, allowing new private banks and more foreign investment and competition. Today, Indian banking utilizes modern technology and aims to further financial inclusion.
This document provides an overview of the history and development of banking in India from 1786 to present day. It discusses the early foundations of banking during British rule through institutions like the Bank of Bengal and Bombay. It then covers the periods of nationalization in 1969 and 1980 when the government took control of major private banks. The document also summarizes key banking reforms since the 1990s that liberalized and opened the industry to competition through policies like universal banking and proposed amendments to banking laws.
For updated information, please visit www.ibef.org February 2018
BANKING
[1] The Indian banking sector has grown at a healthy pace over the past decade, with total credit increasing at a CAGR of 12.38% during FY07-17 and total deposits increasing at a CAGR of 10.08% during the same period.
[2] Total banking sector assets have increased at a CAGR of 8.83% to US$ 2.202 trillion during FY13–17, with assets of public sector banks growing at 7.43% CAGR and private sector banks growing at 14.44% CAGR.
[3]
This document provides an overview of the banking system and monetary policy in India. It discusses the structure of the banking system including the roles of the Reserve Bank of India, scheduled banks, cooperative banks, and commercial banks. It also lists the major public sector and private sector banks. The document then explains the functions and instruments of monetary policy used by the RBI, including open market operations, bank rate, cash reserve ratio, and statutory liquidity ratio. Finally, it briefly discusses fiscal policy and compares the key differences between fiscal and monetary policy.
The document provides an overview of the banking system in India. It discusses the origins and evolution of banking in India from money lenders to the establishment of the Reserve Bank of India in 1935. Key events include the nationalization of major private banks in 1969 and 1980 to promote financial inclusion and priority sector lending. The banking sector was further reformed in the 1990s on the recommendations of the Narasimham Committee, liberalizing and opening the sector to private and foreign banks. Today the Indian banking sector is dominated by public sector, private sector, and foreign banks and has grown but still faces challenges of furthering financial inclusion across India.
This document provides an overview of the history and development of banking in India. It discusses 3 phases: the early phase from 1786 to 1969 which saw the establishment of the first banks but also failures; the nationalization phase from 1969 to 1991 where the government took control of private banks; and the new post-1991 phase of reforms and liberalization. It also describes the current banking structure in India including scheduled commercial banks, cooperative banks, and regional rural banks. Overall it traces the evolution of banking in India from its beginnings to the present system.
Comparison between public sector & private sectorDharmik
The document provides an overview of public sector and private sector banks in India. It discusses that scheduled commercial banks in India are categorized into five groups according to ownership, including public sector banks, private sector banks, and foreign banks. Public sector banks are majority owned by the government, while private sector banks were established to better serve economic needs as public sector banks lacked profit incentives. The document then provides details on the functions of public and private sector banks in India.
Market research customer satisfaction kotak mahindraPrateek Gahlot
- Modern banking in India began with the establishment of presidency banks in the early 19th century under British rule. These banks marked the beginning of limited liability and joint-stock banking in India.
- In the mid-20th century, many banks were nationalized and consolidated to promote growth and access to rural areas. Reforms in the 1990s opened the sector to private banks.
- Today there are public sector, private, and foreign banks offering various savings accounts and services to different customer segments through expanding branch networks. Major banks like SBI and ICICI provide basic savings accounts as well as premium accounts for higher balance customers.
The banking sector in India has grown significantly over the past few decades. It has emerged as an important sector for employment and economic growth. According to a McKinsey report, the banking index grew at over 51% annually from 2001-2010, outpacing the overall market growth. The sector is projected to account for over 7.7% of GDP and provide 1.5 million jobs. Today, banks have diversified and expanded into new services like credit cards, insurance, investment banking, and wealth management. Most leading Indian banks have also established international operations.
A Study on Emerging Challenges & Opportunities for Indian Banking Sectorinventionjournals
Banking sector is treated as a backbone of a nation as it plays multifarious role for the all total growth of a developing country like India. The banking industry in India has a huge canvas of history, which covers the traditional banking Practices from the time of Britishers to the reforms period, nationalization to privatization of banks and now increasing numbers of foreign banks in India. Therefore, Banking in India has been through a long journey. Banking industry in India has also achieved a new height with the changing times. The use of technology has brought a revolution in the working style of the banks. Nevertheless, the fundamental aspects of banking i.e. trust and the confidence of the people on the institution remain the same. Here commercial banks cater to short and medium term financing requirements, while national level and state level financial institutions meet longer-term requirements. Banking industry in India has also achieved anew height with the changing times. Most of banks provide various services such as Mobile banking, SMS & Net banking and ATMs to their customers for their convenience. The use of technology has brought a revolution in the working style of the banks. Banking today has transformed into a technology intensive and customer friendly model with a focus inconvenience. However, changing dynamics of banking business also brings new kind of risk exposure
A Study on Emerging Challenges & Opportunities for Indian Banking Sectorinventionjournals
Banking sector is treated as a backbone of a nation as it plays multifarious role for the all total growth of a developing country like India. The banking industry in India has a huge canvas of history, which covers the traditional banking Practices from the time of Britishers to the reforms period, nationalization to privatization of banks and now increasing numbers of foreign banks in India. Therefore, Banking in India has been through a long journey. Banking industry in India has also achieved a new height with the changing times. The use of technology has brought a revolution in the working style of the banks. Nevertheless, the fundamental aspects of banking i.e. trust and the confidence of the people on the institution remain the same. Here commercial banks cater to short and medium term financing requirements, while national level and state level financial institutions meet longer-term requirements. Banking industry in India has also achieved anew height with the changing times. Most of banks provide various services such as Mobile banking, SMS & Net banking and ATMs to their customers for their convenience. The use of technology has brought a revolution in the working style of the banks. Banking today has transformed into a technology intensive and customer friendly model with a focus inconvenience. However, changing dynamics of banking business also brings new kind of risk exposure.
Indian Banking Industry: Challenges and OpportunitiesWaqas Tariq
Abstract: The banking industry in India has a huge canvas of history, which covers the traditional banking practices from the time of Britishers to the reforms period, nationalization to privatization of banks and now increasing numbers of foreign banks in India. Therefore, Banking in India has been through a long journey. Banking industry in India has also achieved a new height with the changing times. The use of technology has brought a revolution in the working style of the banks. Nevertheless, the fundamental aspects of banking i.e. trust and the confidence of the people on the institution remain the same. The majority of the banks are still successful in keeping with the confidence of the shareholders as well as other stakeholders. However, with the changing dynamics of banking business brings new kind of risk exposure. In this paper an attempt has been made to identify the general sentiments, challenges and opportunities for the Indian Banking Industry. This article is divided in three parts. First part includes the introduction and general scenario of Indian banking industry. The second part discusses the various challenges and opportunities faced by Indian banking industry. Third part concludes that urgent emphasis is required on the Indian banking product and marketing strategies in order to get sustainable competitive edge over the intense competition from national and global banks. This article is a small seed to existing branch of knowledge in banking industry and is useful for bankers, strategist, policy makers and researchers. Key words: Rural Market, Risk Management, Global Banking, Employee and Customer Retention.
The document provides an overview of the history and development of banking in India. It discusses [1] the origins of banking tracing back to Vedic times, [2] the three phases of banking in India from the colonial era to post-independence reforms, and [3] the current structure and types of banks that operate in India including commercial banks, development banks, and cooperative banks.
The document discusses the history and evolution of banking in India from ancient times to modern times. It covers the origins of banking in India, the pre-independence and post-independence banking systems, nationalization of banks in 1969 and 1980, types of banks in India including commercial banks, development banks and cooperative banks, policies of liberalization in the 1990s, and the increasing globalization of the Indian banking sector. It also provides details about the Bank of India as an example of a major public sector bank.
customer satisfaction in icici bank limited 2014-15Gaurav Tyagi
This document provides an overview of private banking in India. It discusses how private banking is a new but fast-growing concept in India given the competitive banking environment. The research objectives are to explore the private banking products and process for matching clients' needs, and to understand why banks are offering private banking services. Private banking first emerged in India in the late 1980s but has grown significantly since ICICI Bank launched private banking in 2002. The document then focuses on analyzing ICICI Bank's private banking portfolio.
This document provides an overview of ICICI Bank, one of the major private sector banks in India. It discusses the history and evolution of ICICI Bank, from its origins as a wholly owned subsidiary of ICICI Limited in 1994, to its merger with ICICI in 2002. The summary also outlines ICICI Bank's recent growth, including a 31% increase in net profit in the last quarter due to improved net interest margin. It concludes with an overview of ICICI Bank's branch network, products and services, and the five dimensions of service quality as defined in the SERVQUAL model.
The document provides a history of banking in India from ancient times through present day. It discusses the key phases in Indian banking history and the current composition of the banking system, including public sector banks, private sector banks, cooperative banks, and development banks. The document also summarizes some of the major opportunities and challenges facing the Indian banking industry, such as interest rate risk, non-performing assets, competition in retail banking, bank mergers and acquisitions, and the impact of Basel II capital adequacy norms.
The document provides a history of banking in India from ancient times through present day. It discusses the key phases in Indian banking history and the current composition of the banking system, including public sector banks, private sector banks, cooperative banks, and development banks. The document also summarizes some of the major opportunities and challenges facing the Indian banking industry, such as interest rate risk, non-performing assets, competition in retail banking, bank mergers and acquisitions, and the impact of Basel II capital adequacy norms.
The document provides an overview of the history and development of banking in India. It discusses the following key points:
1. Banking in India can be broadly classified into commercial banks, cooperative banks, regional rural banks, and foreign banks. The Reserve Bank of India acts as the central bank.
2. The Indian banking system has undergone significant reforms since the early 1990s to increase efficiency and competition. This included reducing reserve requirements, deregulating interest rates, and allowing more private sector and foreign banks.
3. Reforms have helped improve banks' profitability and diversification of services. However, more reforms are still needed to strengthen the system and ensure banks can meet the challenges of globalization.
The document provides an overview of the history and development of banking in India. It discusses how banking originated in India in the late 18th century. It then summarizes the key events in Indian banking including the establishment of the Reserve Bank of India in 1934, the nationalization of banks in 1969 and 1980, and the liberalization of the banking sector in 1991 allowing private banks. The document also outlines the current structure of banking in India including public sector banks, private banks, and foreign banks. It notes that banking has expanded into new products and services and that banks are playing an important role in India's economic development by providing credit and capital.
The document provides information about IDBI Bank Ltd. It discusses that IDBI was established in 1964 as a wholly owned subsidiary of the Reserve Bank of India to serve as an agent of development across various sectors like industry, agriculture, and international trade. IDBI played a dominant role in the balanced industrial development of India by directly or indirectly assisting major corporates. It also established institutions like SIDBI and played a role in the development of the capital market. Currently, the government holds a 51% stake in IDBI while the rest is publicly owned. IDBI has grown to be a large development bank financing various sectors of the economy over the years.
This document provides an introduction and overview of a report comparing the non-performing asset (NPA) scenarios of public sector banks (SBI) and private sector banks (HDFC) in India. It includes the report title, authors, department/university, table of contents listing chapters on the banking structure in India, company profiles of SBI and HDFC, data analysis and conclusions. The introduction discusses the banking system in India and provides background on bank nationalization, the Reserve Bank of India, and the Indian Banks' Association.
The document provides an overview of the Indian banking system. It discusses that a bank accepts deposits and uses those deposits to lend. It then outlines the evolution of banking in India from the pre-independence era to post-independence. After independence, the government nationalized several commercial banks. The Reserve Bank of India acts as the regulatory authority and oversees various types of banks like public sector banks, private sector banks, foreign banks, cooperative banks, regional rural banks, small finance banks, and payment banks.
AN INTRODUCTION TO INDIAN BANKING SYSTEM.pdfPoojaTrehan2
The document summarizes the evolution of the Indian banking system in 4 phases:
1) Evolutionary phase (pre-1947): Banking existed since ancient times but was dominated by the Imperial Bank of India. Banking was largely urban-focused.
2) Foundation phase (1947-1969): At independence, banking was entirely private sector dominated. Rural access to banking was inadequate. The State Bank of India was established in 1955 to boost rural banking.
3) Expansion phase (1969-1990): Nationalization of major banks in 1969 and 1980 increased branch network. Priority sector lending norms were introduced.
4) Liberalization phase (post-1990): Banking was deregulated and privatized. New private
1. I. EVOLUTION OF BANKING IN INDIA
Modern banking in India could be traced back to the establishment of Bank of Bengal (Jan 2, 1809), the
first joint-stock bank sponsored by Government of Bengal and governed by the royal charter of the British
India Government. It was followed by establishment of Bank of Bombay (Apr 15, 1840) and Bank of
Madras (Jul 1, 1843). These three banks, known as the presidency banks, marked the beginning of the
limited liability and joint stock banking in India and were also vested with the right of note issue.
In 1921, the three presidency banks were merged to form the Imperial Bank of India, which had multiple
roles and responsibilities and that functioned as a commercial bank, a banker to the government and a
banker’s bank. Following the establishment of the Reserve Bank of India (RBI) in 1935, the central banking
responsibilities that the Imperial Bank of India was carrying out came to an end, leading it to become more
of a commercial bank. At the time of independence of India, the capital and reserves of the Imperial Bank
stood at Rs 118 mn, deposits at Rs 2751 mn and advances at Rs 723 mn and a network of 172 branches
and 200 sub offices spread all over the country.
In 1951, in the backdrop of central planning and the need to extend bank credit to the rural areas, the
Government constituted All India Rural Credit Survey Committee, which recommended the creation of a
state sponsored institution that will extend banking services to the rural areas. Following this, by an act of
parliament passed in May 1955, State Bank of India was established in Jul, 1955. In 1959, State Bank of
India took over the eight former state-associated banks as its subsidiaries. To further accelerate the credit
to fl ow to the rural areas and the vital sections of the economy such as agriculture, small scale industry
etc., that are of national importance, Social Control over banks was announced in 1967 and a National
Credit Council was set up in 1968 to assess the demand for credit by these sectors and determine resource
allocations. The decade of 1960s also witnessed significant consolidation in the Indian banking industry
with more than 500 banks functioning in the 1950s reduced to 89 by 1969.
For the Indian banking industry, Jul 19, 1969, was a landmark day, on which nationalization of 14 major
banks was announced that each had a minimum of Rs 500 mn and above of aggregate deposits. In 1980,
eight more banks were nationalised. In 1976, the Regional Rural Banks Act came into being, that allowed
the opening of specialized regional rural banks to exclusively cater to the credit requirements in the rural
areas. These banks were set up jointly by the central government, commercial banks and the respective
local governments of the states in which these are located.
The period following nationalisation was characterized by rapid rise in banks business and helped in
increasing national savings. Savings rate in the country leapfrogged from 10-12% in the two decades of
1950-70 to about 25 % post nationalisation period. Aggregate deposits which registered annual growth in
the range of 10% to 12% in the 1960s rose to over 20% in the 1980s. Growth of bank credit increased
from an average annual growth of 13% in the 1960s to about 19% in the 1970s and 1980s. Branch
network expanded significantly leading to increase in the banking coverage.
Indian banking, which experienced rapid growth following the nationalization, began to face pressures on
asset quality by the 1980s. Simultaneously, the banking world everywhere was gearing up towards new
prudential norms and operational standards pertaining to capital adequacy, accounting and risk
management, transparency and disclosure etc. In the early 1990s, India embarked on an ambitious
economic reform programme in which the banking sector reforms formed a major part. The Committee on
Financial System (1991) more popularly known as the Narasimham Committee prepared the blue print of
the reforms. A few of the major aspects of reform included (a) moving towards international norms in
income recognition and provisioning and other related aspects of accounting (b) liberalization of entry and
exit norms leading to the establishment of several New Private Sector Banks and entry of a number of new
Foreign Banks (c) freeing of deposit and lending rates (except the saving deposit rate), (d) allowing Public
Sector Banks access to public equity markets for raising capital and diluting the government stake,(e)
greater transparency and disclosure standards in financial reporting (f) suitable adoption of Basel Accord on
2. capital adequacy (g) introduction of technology in banking operations etc. The reforms led to major
changes in the approach of the banks towards aspects such as competition, profitability and productivity
and the need and scope for harmonization of global operational standards and adoption of best practices.
Greater focus was given to deriving efficiencies by improvement in performance and rationalization of
resources and greater reliance on technology including promoting in a big way computerization of banking
operations and introduction of electronic banking.
The reforms led to significant changes in the strength and sustainability of Indian banking. In addition to
significant growth in business, Indian banks experienced sharp growth in profitability, greater emphasis on
prudential norms with higher provisioning levels, reduction in the non performing assets and surge in
capital adequacy. All bank groups witnessed sharp growth in performance and profitability. Indian banking
industry is preparing for smooth transition towards more intense competition arising from further
liberalization of banking sector that was envisaged in the year 2009 as a part of the adherence to
liberalization of the financial services industry.
II. STRUCTURE OF THE BANKING INDUSTRY
According to the RBI definition, commercial banks which conduct the business of banking in India and
which (a) have paid up capital and reserves of an aggregate real and exchangeable value of not less than
Rs 0.5 mn and (b) satisfy the RBI that their affairs are not being conducted in a manner detrimental to the
interest of their depositors, are eligible for inclusion in the Second Schedule to the Reserve Bank of India
Act, 1934, and when included are known as ‘Scheduled Commercial Banks’. Scheduled Commercial Banks
in India are categorized in five different groups according to their ownership and/or nature of operation.
These bank groups are (i) State Bank of India and its associates, (ii) Nationalised Banks, (iii) Regional
Rural Banks, (iv) Foreign Banks and (v) Other Indian Scheduled Commercial Banks (in the private sector).
All Scheduled Banks comprise Schedule Commercial and Scheduled Co-operative Banks. Scheduled
Cooperative banks consist of Scheduled State Co-operative Banks and Scheduled Urban Cooperative Banks.
Banking Industry at a Glance
In the reference period of this publication (FY06), the number of scheduled commercial banks functioning in
India was 222, of which 133 were regional rural banks. There are 71,177 bank XIV offices spread across
the country, of which 43 % are located in rural areas, 22% in semi-urban areas, 18% in urban areas and
the rest (17 %) in the metropolitan areas. The major bank groups (as defined by RBI) functioning during
the reference period of the report are State Bank of India and its seven associate banks, 19 nationalised
banks and the IDBI Ltd, 19 Old Private Sector Banks, 8 New Private Sector Banks and 29 Foreign Banks.
Table 1: Indian Banking at a Glance
Source: Reserve Bank of India
Table 2: Number of Banks, Group Wise
3. Source: Indian Banks’ Association/ Reserve Bank of India.
* Includes Industrial Development Bank of India Ltd.
Table 3: Group Wise: Comparative Average
Source: Reserve Bank of India.
Table 4: Bank Groups: Key Indicators
4. Source: Reserve Bank of India.
Mergers & Acquisitions
During FY06, two domestic banks were amalgamated - Ganesh Bank of Kurundwad with Federal Bank Ltd
and Bank of Punjab Ltd with Centurion Bank Ltd to become Centurion Bank of Punjab Ltd, while one
Foreign bank UFJ Bank Ltd merged with Bank of Tokyo-Mitsubishi Ltd. ING Bank NV closed its business in
India. In Sept, 2006, The United Western Bank Ltd was placed under moratorium leading to its
amalgamation with Industrial Development Bank of India Ltd. in Oct, 2006. On Apr 1, 2007, Bharat
Overseas Bank an old private sector bank was taken over by Indian Overseas Bank and on Apr 19, 2007,
Sangli Bank, another old private sector bank was merged with ICICI Bank, a new private sector bank.
Shareholding Pattern
As of Mar 2006, only four Nationalised Bank had 100% ownership of the Government. These are Central
Bank of India, Indian Bank, Punjab and Sind Bank and United Bank of India. As of Mar 2006, the
government shareholding in the State Bank of India stood at 59.7% and in between 51-77% in other
nationalised banks. In Feb 2007, Indian Bank came out with a public issue thus leaving only three
nationalised banks having 100% government ownership. Foreign institutional holding up to 20% of the paid
up is allowed in respect of Public Sector Banks including State Bank of India and many of the banks have
reached the threshold level for FII investment. In respect of Private Sector Banks where higher FII holding
is allowed, threshold limit has been reached in the leading banks.
III. INDIAN BANKING AND INTERNATIONAL TRENDS
When compared to other emerging markets, the growth of Indian banking has been impressive and
compares favorably on several counts. A recent study by Bank for International Settlements on the
progress and the prospects of banking systems in emerging countries highlights the following features of
the performance of Indian banks:
Average growth rate of real aggregate credit in India rose from 6.1% during the period 1995- 99 to
14.6 % in 2000-04.
5. The average growth rate of real aggregate credit in India during 2000-04 in India is higher as
compared to major countries and regions in the emerging markets, such as China (13.3%), Other
Asia (4.7%), Latin America (4.5%), and Central Europe (9.6%).
Commercial banks in India account for a major share of the bank credit (97%) as compared to
Latin America (68%), Other Asia (74%) and Central Europe (83%).
Real bank credit to the private sector has shown sustained growth in India, and has moved from
3.9% a year in 1990-94 to 6.9% a year in 1995-99 to 13.5 % a year in 2000-04. In 2005, real
bank credit to the private sector in India showed a growth of 30% year-on-year as against 9.4% in
China and 15.8% in emerging markets.
In India, during the period 1999 and 2004, non-performing loans as a percentage of total
commercial bank assets came down from 6.1% to 3.3%, capital asset ratios moved up from 11.3%
to 12.9% and operating costs as a percentage of total assets reduced from 2.4% to 2.3%. NPAs in
China in 2004 stood at 6%.
In India, return on assets of banks during the period 1999-2004 moved up from 0.4% to 1.1%, and
return on equity from 8.5% to 20.9% where as in China the former rose from 0.1% to 0.3%.
IV. BUSINESS OF COMMERCIAL BANKS
1. Balance Sheet Growth
In FY06, the aggregate balance sheet of the scheduled commercial banks increased by 18.4%,
over a 19.3 % growth registered in FY05. The ratio of bank assets to GDP rose to 86.9% as
compared to 82.8% in FY05. Banking industry gained from the by rapid rise in the real economy,
leading to surge in several areas of business.
2. Capital and Reserves
The capital of the scheduled commercial banks as on Mar 31, 2006 stood at Rs 252040 mn. During
FY06, reserves and surplus of all scheduled commercial banks rose by 27.6%. Revenue and other
reserves nearly doubled for the banks as a whole, with SBI reporting four fold increase in this
regard.
3. Deposits and Advances
Deposits of SCBs grew by 17.8 % in FY06 as against 16.6% in FY05, but the advances growth
outstripped this pace with a rise of 31.8% in FY06, over a 33.2% growth in FY05. As per a recent
RBI report, FY06 was the second consecutive year, when increase in credit in absolute terms was
more than the absolute increase in aggregate deposits.
Table 5: Deposits/Advances/Investments of Bank Groups in India (In Rs mn)
Source: Reserve Bank of India
4. Group-wise Performance
The growth in deposits across the different bank groups showed substantial variation. Public Sector
Banks with a deposit growth of 12.9% and Old Private Sector Banks with 11.4% showed a
relatively subdued growth in deposits where as the New Private Sector Banks with 50.7% and
6. Foreign Banks with 31.7% showed a sharp rise. Borrowings of the Public Sector Banks grew at
24%, but that of the Foreign Banks was much higher (30%). Due to redemption of the India
Millennium Deposits in Dec 2005, banks’ non-resident foreign currency deposits showed a sizeable
decline. Loans and advances growth too was on similar trends. For Public Sector Banks, loan
growth was 29.5% as compared to 34.9% in FY05, for Old Private Sector Banks, it was 21.5% as
against 22.7% in the previous year, for New Private Sector Banks it was 50.2 % as against 33% in
FY05, and for Foreign Banks it was 29.5% as against 24 % in FY05. In the non-food credit, apart
from retail credit which grew at 40.9%; infrastructure (24%), basic metals (14.1%) and textiles
(11.2%) were the other major sectors that received higher levels of incremental credit.
5. Growth in Retail Lending
While total credit of the SCBs grew at 31% in FY06, credit to the new segments in the retail
banking showed still higher growth rates. In FY06, loans to housing rose by 33.4%, credit card
receivables by 47.9%, auto loans by 75%, and other personal loans by 39.1% taking the growth of
retail loans during the FY06 to 40.9%. Retail loans in FY06 constituted 25.5% of the total loans
and advances of scheduled commercial banks. Lending to sensitive sectors also rose significantly.
Loans to capital market rose by 39.2%, to real estate markets by 81.78% and to commodities by
85.56% with the growth in these three segments reaching to 77.65% in FY06.
Table 6: Advances to Sensitive Sectors as a percentage to Total Loans
Source: Reserve Bank of India
6. Priority Sector Advances
Credit to priority sector increased at a robust rate of 33.7% in FY06 on the top of 40.3% in the
previous year. A major portion of the credit growth in the priority sector is accounted by
agriculture and housing. Credit to SSI also grew sizeably.
Table 7: Priority Sector Lending
Source: Reserve Bank of India.
Figures in brackets are annual growth rate in %
7. 7. Market Share
The share of Public Sector Banks showed deceleration in respect of major areas of business, where
as that of the new private sector and Foreign Banks earned higher share of business. The market
share of the Old Private Sector Banks too came under pressure. Public Sector Banks hold 75%
market share in major areas of business.
Table 8: Major Components of Business, Bank GroupWise (in %)
Source: Reserve Bank of India
* Industrial Development Bank of India Ltd
** Includes Industrial Development Bank of India Ltd
8. Access to Equity Markets
Banks have been increasingly accessing primary equity capital markets for raising resources. In
FY06, resource mobilization of banks through public equity markets rose by 24%. Resources raised
by banks from public equity markets showed continuous increase, from Rs 24560 mn in FY04 to Rs
89220 mn in FY05 to Rs 110670 mn in FY06. Encouraged by the response to banks stocks, eleven
banks, six in the public sector and five in the private sector, raised Rs 110670 mn from the equity
markets. The Public Sector Banks which raised equity from the capital markets included Allahabad
Bank, Oriental Bank of Commerce, Syndicate Bank, Andhra Bank, Bank of Baroda and Union Bank
of India. The five Private Sector Banks were Lakshmi Vilas Bank Ltd, Yes Bank Ltd, ICICI Bank
Ltd., The South Indian Bank Ltd and The United Western Bank Ltd. The size of the share issue of
these banks was Rs 6270 mn where as the premium was at Rs 104400 mn. Banks also tapped
private placement market for resource mobilization in a big way by raising Rs 301510 mn of which
Public Sector Banks accounted for 74%.
Bank stocks also emerged as an important portfolio for investment giving significant returns.
Returns from bank stocks as measured through BSE Bankex rose from 28.6% in FY05 to 36.8 % in
FY06 as compared to the benchmark index. Bank stocks still have scope for further growth with
lower valuation prevailing at present in many banks.
8. Source : Bombay Stock Exchange.
9. Asset Quality
There is a perceptible increase in the quality of bank assets. Standard assets as percent of all
assets for scheduled commercial banks moved from 94.9% in FY05 to 96.7% in FY 06, with decline
in reported sub standard, doubtful and loss assets. The proportion of standard assets rose across
all the bank groups in FY06, showing improved management of assets by banks. According to a
report of the Reserve Bank of India, the gross non performing assets of the scheduled commercial
banks declined by Rs 73090 mn over and above the decline of Rs 65610 mn in FY05.
As on 31 Mar 2006, gross NPAs of scheduled commercial banks stood at Rs 518150 mn of which
26.4% are with State Bank group, 53% with the nationalised banks, 7.1% with the Old Private
Sector Banks, 7.3% with the New Private Sector Banks and 3.7% with the Foreign Banks.
Scheduled commercial banks stepped up recovery efforts through numerous methods. In addition
to their own internal recovery processes, banks recovered to the tune of Rs 6080 mn through one-
time settlement and compromise schemes, Rs 2230 mn though Lok Adalats, Rs 47100 mn through
Debt Recovery Tribunals and Rs 34230 mn through SARFAESI Act. Asset Reconstruction Company
of India Ltd (ARCIL) acquired 559 cases amounting to Rs 211260 mn from banks.
Table 9: Asset Classification in Banks (as % of Total Assets)
9. Source: Reserve Bank of India
10. Distribution of Network
The expansion in the distribution network of the banks is increasingly evident from the growth of
the automated teller machines. There is a surge in the growth of off-site ATMs with their share in
the total ATMs rising to 32% in respect of Public Sector Banks, 67% in State Bank group, 32% in
Old Private Sector Banks, 63% in New Private Sector Banks and 73% in Foreign Banks.
Computerisation of public sector bank branches is also moving at rapid pace. In 2007 the pace of
computerization progressed much further. Public Sector Banks have 93 branches operating abroad
in 26 countries. All scheduled commercial banks together have 106 branches abroad.
10. Table 10: Branches/ATMs/Staff in Banks (Number)
Source: Reserve Bank of India
11. Major Trends in Business
Indian banking, in addition to improvements in performance and efficiency, has also experienced
significant changes in the structure of asset and liabilities. The major changes on the liabilities side
include relatively higher growth of demand deposits over time deposits, and also, within time
deposits, greater preference for short term over the longer term deposits. The share of demand
deposits in total deposits increased from 14.7% in FY01 to 17% in FY06. The share of short term
deposits in total time deposits increased from 43.8% in FY00 to 58.2% in FY06. The narrowing of
interest rate spread between short and long term deposits has reduced the preference for long
term deposits.
Banks are moving away from investments to loans due to more lending opportunities offered by
the higher economic growth. The rate of bank credit growth which was at 14.4% in FY03 rose
sharply to reach 30% each in the FY05 and FY06. Bank credit has picked up momentum on the
back of rising growth of real economy. A period of low interest rates induced banks to shift their
preference from investments to advances, which led to the share of gross advances in total assets
of all commercial banks reaching 54.7% in FY06 from 45% in two years prior to that.
The sectors towards which the bank credit was directed has also shown significant changes. Retail
loans witnessed growth of over 40% in the last two years, and began driving the credit growth to a
significant extent. Retail loans as a percentage of Gross Advances rose from about 22% in FY04 to
25.5% in FY06. Within the retail loans, housing segment showed the highest growth of 50% in
FY05 and 34% in FY06. As per the RBI data, banks direct exposure to commercial real estate more
than doubled in FY06.
Despite sharp rise in the credit growth, improved risk management processes and procedures of
banks contained the surge in bad debts which is evident from the lower levels of incremental
nonperforming assets reported by the banks as also the rise in the proportion of standard assets.
Further improvement in risk management systems could provide banks with more opportunities in
expanding credit and pursuing higher levels of growth in retail lending.
11. Private-sector banks in India
The private-sector banks in India represent part of the indian banking sector that is made up of
both private and public sector banks. The "private-sector banks" are banks where greater parts of
stake or equity are held by the private shareholders and not by government.
Banking in India has been dominated by public sector banks since the 1969 when all major banks
were nationalised by the Indian government. However since liberalisation in government
banking policy in 1990s, old and new private sector banks have re-emerged. They have grown
faster and bigger over the two decades since liberalisation using the latest technology, providing
contemporary innovations and monetary tools and techniques.[1]
The private sector banks are split into two groups by financial regulators in India, old and new.
The old private sector banks existed prior to the nationalisation in 1969 and kept their
independence because they were either too small or specialist to be included in nationalisation.
The new private sector banks are those that have gained their banking license since the
liberalisation in the 1990s
Old private-sector banks[edit]
The banks, which were not nationalized at the time of bank nationalization that took place
during 1969 and 1980 are known to be the old private-sector banks. These were not
nationalized, because of their small size and regional focus.[2]
Most of the old private-sector
banks are closely held by certain communities their operations are mostly restricted to the areas
in and around their place of origin. Their Board of directors mainly consist of locally prominent
personalities from trade and business circles. One of the positive points of these banks is that,
they lean heavily on service and technology and as such, they are likely to attract more business
in days to come with the restructuring of the industry round the corner.
List of the old private-sector banks in India[edit]
Name
Year
established
1. Bank of punjab merged with Centurion Bank to form Centurion Bank of Punjab in June
2005
1943
2. City Union Bank 1904
3. Dhanlaxmi Bank 1927
12. 4. Federal Bank 1931
5. ING Vysya Bank 1930
6. Jammu and Kashmir Bank 1938
7. Karnataka Bank 1924
8. Karur Vysya Bank 1916
9. Lakshmi Vilas Bank 1926
10. Nainital Bank 1922
11. RBL Bank 1943
12. SBI Commercial and international Bank 1955
13. South Indian Bank 1929
14. Tamilnad Mercantile Bank Limited 1921
15. United Western Bank 1936
16. IDB Bank Ltd (reverse merged with parent IDBI in 2004 to become IDBI Bank. Making
this public sector bank private)
1964
17. CATHOLIC SYRIAN BANK 1920
New private-sector banks[edit]
The banks, which came in operation after 1991, with the introduction of economic reforms and
financial sector reforms are called "new private-sector banks". Banking regulation act was then
amended in 1993, which permitted the entry of new private-sector banks in the Indian banking s
sector. However, there were certain criteria set for the establishment of the new private-sector
banks, some of those criteria being:#The bank should have a minimum net worth of Rs. 200
crores.
1. The promoters holding should be a minimum of 25% of the paid-up capital.
2. Within 3 years of the starting of the operations, the bank should offer shares to public and their
net worth must increased to 300 crores.[3]
List of the new private-sector banks in India[edit]
13. Name
Year
established
1. Axis Bank (earlier UTI Bnk) 1994
2. Bank of Punjab (actually an old generation private bank since it was not founded under
post-1993 new bank licensing regime)
1989
3. Centurion Bank Ltd. (Merged Bank of Punjab in late 2005 to become Centurion Bank of
Punjab, acquired by HDFC Bank Ltd. in 2008)
1994
4. Development Credit Bank (Converted from Co-operative Bank, now DCB Bank Ltd.) 1995
5. HDFC Bank 1994
6. ICICI Bank (previously ICICI and then both merged;total merger SCICI+ICICI+ICICI Bank
Ltd)
1996
7. IndusInd Bank 1994
8. Kotak Mahindra Bank 2003
9. Yes Bank 2005
10. Times Bank (Merged with HDFC Bank Ltd.) Unknown
11. Global Trust Bank (India) (Merged with Oriental Bank of Commerce) Unknown
12. Balaji Corporation Bank Limited 2010