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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
The Reserve Bank of India (RBI) is India's central banking institution established in 1935. It controls monetary policy and ensures price stability in India. RBI was initially owned privately but was nationalized in 1949. RBI plays an important role in the development strategy of the Indian government and oversees financial inclusion initiatives. It is governed by a 21-member Central Board of Directors including the Governor, Deputy Governors, and government and regional representatives.
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 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 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.
Banking in India originated in the late 18th century with the Bank of Hindustan and General Bank of India. The oldest and largest bank still in existence is the State Bank of India, which originated from the Bank of Bengal and later merged with the Bank of Bombay and Bank of Madras to form the Imperial Bank of India. In 1955 it became the State Bank of India. The government nationalized many banks in 1969 and they remain under government ownership as public sector undertakings. The modern Indian banking sector includes public sector banks, private sector banks, foreign banks, regional rural banks, urban cooperative banks and state cooperative banks.
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
Bank of Baroda (BoB) is one of the largest public sector banks in India with over 5000 branches globally. It was founded in 1908 in Baroda, Gujarat by the Maharaja of Baroda. Over the years, BoB has expanded both within India and internationally. In 1969, it was nationalized along with 13 other major banks. Today, BoB offers a wide range of banking products and services to corporate and retail customers. It has received several awards recognizing its leadership and customer service. BoB has a strong presence both within India and globally across over 20 countries.
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.
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.
Final research project ....jayati poddar 17 1-11 modifiedJayati Poddar
This document is a project report on comparing the financial performance of State Bank of India and Bank of Baroda. It includes an introduction, acknowledgements, preface, and table of contents. The main sections analyze the banking industry in India, provide profiles of SBI and Bank of Baroda, discuss the research methodology used, present a financial analysis using ratio analysis, and compare the financial performance of the two banks. It concludes with findings, suggestions, and conclusions from the comparative study.
The three key points are:
1) The Reserve Bank of India Act 1934 established the Reserve Bank of India and empowered it to regulate banks and maintain financial stability in India.
2) The principal regulatory framework for banks in India involves the Banking Regulation Act 1949, which provides legal guidelines for banks, and the Reserve Bank of India Act 1934, which empowers RBI to supervise banks.
3) Some of RBI's main roles and responsibilities include being the sole issuer of banknotes, acting as banker and lender of last resort to commercial banks, managing currency and monetary policy, and regulating and supervising banks.
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.
This document provides an overview of the State Bank of India (SBI), including its history, products/services, and organizational structure. It discusses that SBI was formed in 1955 and took over the operations of the Imperial Bank of India. Today, SBI owns 28% of India's banking network and has over 70,000 offices nationwide, making it the largest bank in India. The document also notes that SBI is working to computerize its branches to improve services and is developing new products to better serve customers.
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.
This document provides an overview of public sector and private sector banks in India. It begins with background on the Indian banking system and classifications of banks based on ownership, law, and function. It then discusses the privatization of Indian banking and the structure of the banking system. The primary functions of banks are described as accepting deposits, advancing loans through various methods, and credit creation. Secondary functions include remittance facilities, agency services, and other supplementary roles. The document presents research methodology used for a comparative study and analyzes data collected on performance indicators of sample public and private banks. It concludes with findings, suggestions and recommendations.
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.
This document provides an overview of bank financial management and international banking topics related to the CAIIB exam syllabus. It covers key concepts like exchange rates, foreign exchange markets, spot and forward rates, currency quotes, cross-currency rates, arbitrage, forex operations including dealing, back office and mid office functions, and associated risks. It also discusses forex derivatives like forwards, options, swaps, and defines risks in forex operations such as exchange rate risk, settlement risk, and how banks manage risks through various dealing limits.
Government run crop yield insurance scheme, procurement at minimum support prices and calamity relief funds are the major instruments being used to protect the Indian farmer from agricultural variability. However, crop insurance covers only about 10% of sown area and suffers from an adverse claims to premium. There are problems with both the design and delivery of crop insurance schemes. These problems could be overcome with rainfall insurance with a well developed rainfall measurement infrastructure. Private and public insurers are currently experimenting with rainfall insurance products. Given the current levels of yield and rainfall variability the actuarially fair premium rates are likely to be high and in many cases unattractive or unaffordable. Instead of adopting the easy and unsustainable route of large subsidies, in the long term the government should consider risk mitigation through improvements in the irrigation and water management infrastructure.
The Theory and Practice of Banking: A power point presentationNiki Hannevig
If the purpose of The 1776 Declaration of Independence was to "dissolve the political bands which have connected them with another", what was the purpose of post-Civil War "reconstruction"?
How were 18th Century Whigs and Tories connecting colonists with bankers?
Is there a solution? If so, what is that solution?
Learn more about alienable "Rights"; what they were and how they have been conveyed without full disclosure.
Below are the links for this presentation:
The Theory and Practice of Banking (book format) - https://archive.org/stream/theoryandpracti01maclgoog#page/n501/mode/1up
The Theory and Practice of Banking (PDF format) - https://ia600304.us.archive.org/1/items/theoryandpracti01maclgoog/theoryandpracti01maclgoog.pdf
Why the Confederacy Failed - https://archive.org/details/whyconfederacyfa00rose
Lackawanna Jurist - http://books.google.com/books/download/Lackawanna_Jurist.pdf?id=LK04AAAAIAAJ&hl=en&capid=AFLRE72oH90TsgYw4sAUMH00K4-CFU5CoJvz14k9TzhgG_CPI5mbNtIydhbqkIbq1jUvABvc38VZNfV79nuq2XM_6jc-AU-u-w&continue=http://books.google.com/books/download/Lackawanna_Jurist.pdf%3Fid%3DLK04AAAAIAAJ%26output%3Dpdf%26hl%3Den
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.
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.
The Reserve Bank of India (RBI) is India's central banking institution established in 1935. It controls monetary policy and ensures price stability in India. RBI was initially owned privately but was nationalized in 1949. RBI plays an important role in the development strategy of the Indian government and oversees financial inclusion initiatives. It is governed by a 21-member Central Board of Directors including the Governor, Deputy Governors, and government and regional representatives.
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 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 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.
Banking in India originated in the late 18th century with the Bank of Hindustan and General Bank of India. The oldest and largest bank still in existence is the State Bank of India, which originated from the Bank of Bengal and later merged with the Bank of Bombay and Bank of Madras to form the Imperial Bank of India. In 1955 it became the State Bank of India. The government nationalized many banks in 1969 and they remain under government ownership as public sector undertakings. The modern Indian banking sector includes public sector banks, private sector banks, foreign banks, regional rural banks, urban cooperative banks and state cooperative banks.
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
Bank of Baroda (BoB) is one of the largest public sector banks in India with over 5000 branches globally. It was founded in 1908 in Baroda, Gujarat by the Maharaja of Baroda. Over the years, BoB has expanded both within India and internationally. In 1969, it was nationalized along with 13 other major banks. Today, BoB offers a wide range of banking products and services to corporate and retail customers. It has received several awards recognizing its leadership and customer service. BoB has a strong presence both within India and globally across over 20 countries.
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.
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.
Final research project ....jayati poddar 17 1-11 modifiedJayati Poddar
This document is a project report on comparing the financial performance of State Bank of India and Bank of Baroda. It includes an introduction, acknowledgements, preface, and table of contents. The main sections analyze the banking industry in India, provide profiles of SBI and Bank of Baroda, discuss the research methodology used, present a financial analysis using ratio analysis, and compare the financial performance of the two banks. It concludes with findings, suggestions, and conclusions from the comparative study.
The three key points are:
1) The Reserve Bank of India Act 1934 established the Reserve Bank of India and empowered it to regulate banks and maintain financial stability in India.
2) The principal regulatory framework for banks in India involves the Banking Regulation Act 1949, which provides legal guidelines for banks, and the Reserve Bank of India Act 1934, which empowers RBI to supervise banks.
3) Some of RBI's main roles and responsibilities include being the sole issuer of banknotes, acting as banker and lender of last resort to commercial banks, managing currency and monetary policy, and regulating and supervising banks.
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.
This document provides an overview of the State Bank of India (SBI), including its history, products/services, and organizational structure. It discusses that SBI was formed in 1955 and took over the operations of the Imperial Bank of India. Today, SBI owns 28% of India's banking network and has over 70,000 offices nationwide, making it the largest bank in India. The document also notes that SBI is working to computerize its branches to improve services and is developing new products to better serve customers.
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.
This document provides an overview of public sector and private sector banks in India. It begins with background on the Indian banking system and classifications of banks based on ownership, law, and function. It then discusses the privatization of Indian banking and the structure of the banking system. The primary functions of banks are described as accepting deposits, advancing loans through various methods, and credit creation. Secondary functions include remittance facilities, agency services, and other supplementary roles. The document presents research methodology used for a comparative study and analyzes data collected on performance indicators of sample public and private banks. It concludes with findings, suggestions and recommendations.
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.
This document provides an overview of bank financial management and international banking topics related to the CAIIB exam syllabus. It covers key concepts like exchange rates, foreign exchange markets, spot and forward rates, currency quotes, cross-currency rates, arbitrage, forex operations including dealing, back office and mid office functions, and associated risks. It also discusses forex derivatives like forwards, options, swaps, and defines risks in forex operations such as exchange rate risk, settlement risk, and how banks manage risks through various dealing limits.
Government run crop yield insurance scheme, procurement at minimum support prices and calamity relief funds are the major instruments being used to protect the Indian farmer from agricultural variability. However, crop insurance covers only about 10% of sown area and suffers from an adverse claims to premium. There are problems with both the design and delivery of crop insurance schemes. These problems could be overcome with rainfall insurance with a well developed rainfall measurement infrastructure. Private and public insurers are currently experimenting with rainfall insurance products. Given the current levels of yield and rainfall variability the actuarially fair premium rates are likely to be high and in many cases unattractive or unaffordable. Instead of adopting the easy and unsustainable route of large subsidies, in the long term the government should consider risk mitigation through improvements in the irrigation and water management infrastructure.
The Theory and Practice of Banking: A power point presentationNiki Hannevig
If the purpose of The 1776 Declaration of Independence was to "dissolve the political bands which have connected them with another", what was the purpose of post-Civil War "reconstruction"?
How were 18th Century Whigs and Tories connecting colonists with bankers?
Is there a solution? If so, what is that solution?
Learn more about alienable "Rights"; what they were and how they have been conveyed without full disclosure.
Below are the links for this presentation:
The Theory and Practice of Banking (book format) - https://archive.org/stream/theoryandpracti01maclgoog#page/n501/mode/1up
The Theory and Practice of Banking (PDF format) - https://ia600304.us.archive.org/1/items/theoryandpracti01maclgoog/theoryandpracti01maclgoog.pdf
Why the Confederacy Failed - https://archive.org/details/whyconfederacyfa00rose
Lackawanna Jurist - http://books.google.com/books/download/Lackawanna_Jurist.pdf?id=LK04AAAAIAAJ&hl=en&capid=AFLRE72oH90TsgYw4sAUMH00K4-CFU5CoJvz14k9TzhgG_CPI5mbNtIydhbqkIbq1jUvABvc38VZNfV79nuq2XM_6jc-AU-u-w&continue=http://books.google.com/books/download/Lackawanna_Jurist.pdf%3Fid%3DLK04AAAAIAAJ%26output%3Dpdf%26hl%3Den
Priority Sector Lending (PSL) is a critical piece of compliance required in the Indian Banking and Finance industry. This presentation (along with the part 1, posted earlier gives a quick overview of the priority sector lending concepts. The regulation for PSL is quite clear and increasingly Banks are mandated by the regulator - RBI to ensure compliance to PSL.
Brought to you by www.sineedge.com
This article describes the various challenges and opportunities in implementing Agriculture insurance in India. It also details the historical insurance programs and crop insurance schemes implemented by the Government of India in the past few decades.
The document provides an overview of the Indian banking system, including definitions of key banking terms, the functions and roles of banks, and the history and evolution of banking in India. It describes the different types of banks in India such as public sector banks, private sector banks, foreign banks, cooperative banks, regional rural banks, and specialized banks like NABARD, EXIM Bank, and NHB. It also discusses pre-reforms developments like the lead bank scheme and important milestones in Indian banking.
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
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.
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.
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.
1) The document provides an overview of the banking industry in India, including its history and evolution. It discusses how banks originated from goldsmiths in the 12th century and the establishment of key banks like the Bank of England and presidency banks in India.
2) It then summarizes the nationalization of banks in India in 1969 and 1980, where the government took control of major private banks to facilitate development and credit delivery. This resulted in the government controlling around 91% of banking at the time.
3) The roles of the Reserve Bank of India in regulating the banking sector through acts like the Banking Regulation Act of 1949 are also highlighted. The history provides context for how the modern Indian banking system developed and
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.
Banks play a critical role in economic development by financing businesses and individuals. In India, banks cater to vast numbers of savers and provide financing needed for corporate and individual needs. Over time, banks have evolved, taking on new forms and services in response to economic changes. Today commercial banks in India accept deposits, provide loans, facilitate payments, support trade and development, and offer additional financial products and services.
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.
The document discusses the origin and development of banking in India over three phases from 1786 to the present. It provides details on the key events and reforms that took place during each phase, including the establishment of early private banks in the late 18th century, nationalization of banks from the 1960s to 1980s, and liberalization reforms beginning in 1991 that opened the sector to private and foreign banks. It also outlines the role and importance of banks in promoting economic development through capital formation, monetization, financing innovations and priority sectors.
The document provides background information on the Indian banking system. It discusses the origins of banking in India dating back to ancient times. It outlines the key developments in the banking system including the establishment of presidency banks under the British East India Company in the 1800s, the nationalization of banks in 1969 and 1980 that brought most banking under public sector control, and the subsequent liberalization reforms since 1991 that increased competition and private sector participation. It also defines the different types of banks that operate in India such as commercial banks, development banks, and cooperative banks.
A study on customer satisfaction towards e banking services during 2nd waves ...vinodgowdavinod9743
A study on customer satisfaction towards e banking services during 2nd waves of COVID-19 pandemic situation with special reference to state Bank of India
The document discusses the history and evolution of banking in India through five phases:
1) Pre-Independence phase which saw the establishment of the first banks like Bank of Bengal.
2) Pre-nationalization phase from 1947-1969 which saw an increase in rural banking.
3) Expansion phase from 1969-1984 where 14 major commercial banks were nationalized and branches expanded rapidly.
4) Consolidation phase from 1985-1991 focused on strengthening public sector banks through policy reforms.
5) Restructuring phase from 1992 onward introduced liberalization and licensing of private banks and foreign banks in India.
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.
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.
This document is a summer training project report submitted by Prateek Chandra to the State Bank of India. The report analyzes the financial patterns of retail traders with SBI compared to other banks in Lucknow, India. It includes an acknowledgements section thanking those who provided guidance. It also includes a declaration stating the report is Prateek Chandra's original work. The report contains an executive summary of the findings, table of contents, and sections on the banking industry profile and history in India.
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.
A study to know the banking behavoir and preferences of corporate customers t...Gop's Barvaliya
This document provides an overview of a project report submitted by two students, Prashant J. Barvaliya and Dhwani M. Thakar, for their MBA program. The report studies the banking behavior and preferences of corporate customers in Prahalad Nagar area towards corporate banking at Kotak Mahindra Bank. The 3-4 page document includes sections on preface, declaration, acknowledgements, and the start of chapter 1 on the executive summary and industry profile.
The document discusses the history of banking in India in three phases:
1) Pre-Nationalization Era - Banking began with indigenous credit instruments and later developed through agency houses. The first presidency banks were established in the 1800s.
2) Nationalization Stage - The State Bank of India was established in 1955 by nationalizing the Imperial Bank of India. In 1969 and 1980, 14 and then 6 more commercial banks were nationalized.
3) Post Liberalization Era - Financial sector reforms began in the 1990s to address issues like regulated interest rates, lack of profit focus and competition that had hindered bank performance. Reforms aimed to make banks more viable and efficient.
This document provides an overview of the banking industry in India through an industry analysis. It begins with a history of banking in India and outlines key developments such as nationalization in 1969 and liberalization in 1991. It then performs a PEST analysis, SWOT analysis, and Porter's Five Forces analysis of the industry. The document also examines the current state of the industry, including market share breakdown among public and private sector banks. It concludes with an objective to analyze and compare the top two players in the industry through various lenses.
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Prescriptive analytics BA4206 Anna University PPTFreelance
Business analysis - Prescriptive analytics Introduction to Prescriptive analytics
Prescriptive Modeling
Non Linear Optimization
Demonstrating Business Performance Improvement
1. The Banking Sector in India
The Banking sector in India has always been one of the most preferred
avenues of employment. In the current decade, this has emerged as a
resurgent sector in the Indian economy. As per the McKinsey report ‘India
Banking 2010’, the banking sector index has grown at a compounded annual
rate of over 51 per cent since the year 2001, as compared to a 27 per cent
growth in the market index during the same period. It is projected that the
sector has the potential to account for over 7.7 per cent of GDP with over
Rs.7,500 billion in market cap, and to provide over 1.5 million jobs.
Today, banks have diversified their activities and are getting into new
products and services that include opportunities in credit cards, consumer
finance, wealth management, life and general insurance, investment
banking, mutual funds, pension fund regulation, stock broking services,
custodian services, private equity, etc. Further, most of the leading Indian
banks are going global, setting up offices in foreign countries, by themselves
or through their subsidiaries.
2. CHAPTER V
PROGRESS OF THE BANKING SECTOR IN INDIA AND
THE UNION TERRITORY OF PONDICHERRY.
5,l Introduction
Banks constitute an important segment in financial arena of all countries
whether developed or developing or underdeveloped. Economic development of every
country depends upon financial sector particularly commercial banks. In fact economic
development and financial infrastructure go hand in hand. From time immemorial, the
conventional banker, an indispensable pillar of Indian society, giving and taking of
credit in one form or another, must have existed as earlier as the Vedic period. Money
lending was one of the recognised occupations under Manu's laws' .
The history of modem Indian banking2 goes back to 1683 when the first
Indian Bank was established on western lines in Madras. The establishment of the Bank
of Calcutta in 1806 marked the beginning of the modern banking era in India. Two more
Presidential Banks, namely, Bank of Bombay and Bank of Madras were set up in 1840
and 1843 respectively. With the launching of Swadeshi movement in 1905, there were
outbursts of banking activities. Many banks like Bank of Burma (1904), Bank of India
(1 906), Canara Bank (1 906), Bank of Rangoon (1 906), Indian Specie Bank (1 906),
1
N.K. Thingalaya, "Manu, Chanakya and the Rate of Interest", Pigmy Economic
Review, Vol. 36, Aug - Oct, 1994, pp. 1-5..
'c. Kugumakara Hebbar, "Growth of Banking in India Before Independence",
Pigmy Econgmic Review, August 1 9 89, pp .3 -4. Indian Bank (1 9061, Bank of Baroda (1 908) and Central
Bank ( 191 1 ) had their operation
with a paid up capital of Rupees Five lakhs and above. But the present Indian banking
system had developed considerably since 1935. RBI has started its operation in 1935
3. through an Act. A critical review of the growth of banking in India in the pre-
independence period reveals that the banking system had neither a definite shape nor
policy except the creation of RBI in 1935. With the enactment of the Banking
Companies Act in 1949, the Indiaii banking system had undergone substantial changes
structurally, geographically and functionally.
Banking in India broadly falls under two categories: (a) Commercial
banks and (b) Co-operative banks. Commercial banks are the major players as far as
industry and trade sectors are concerned whereas co-operative banks cater to the needs of
rural economy particularly agriculture sector. Commercial banks fall under two distinct
categories, namely, Scheduled commercial banks and non-scheduled Commercial banks.
Scheduled commercial banks means the banks which are listed in the Second Schedule
of RBI Act, 1934. Under section 42 (1) of the Act, scheduled commercial banks are
expected to maintain cash balance to a minimum of three per cent of their net demand
and time liabilities, The cash reserve ratio is subject to upward / downward revision by
RBI. The scheduled commercial banks enjoy certain special privileges like availing
financial assistance under section 17 of the RBI Act. Non-scheduled Commercial banks
are not listed and they do not have any large network. As of now only, one non-
scheduled bank is functioning in India as compared to 16 nos on the eve of bank
nationalisation. 5.2 Progress of Banking in India
The progress of Commercial banking in India can be categorised under
the following four distinct phases: Phase I ( 1 860-1 946 ); Phase I1 (1 947-1968 ); Phase
111 (1969-1 990); Phase IV (1991- till date).
5.2.1 Progress of Banking - Phase I (1860 - 1946)
With the advent of British rule in India, the business of the indigenous
bankers had declined. The banks on western model have come into existence. Financial
4. transactions were handled by them. It was only in 1850's, the British bank actually
reached India. The first western type thrift institution introduced in India was the
Savings department of the Presidency Bank which, opened in the 1840's and was
followed in 1870 by District Savings Bank operated by the treasury and in 1882 by the
Postal Saving system. In 1900, the Postal savings system was the only such institution
left in the field besides the indigenous private institutions like chit funds, nidhis. Life
Insurance was still in the early stage of development at the beginning of World War I
and substantial part of this business was done by the British people rather than by the
Indian banks.
The Central bank in India came into existence on First April , 1935 The
bank was organised as a Joint Stock Company whose shares were held privately. This
bank had two major departments, namely, System department and Badsing department.
The RBI was the largest financial institution in India with about one-third of the assets of
all financial institutions. The Imperial Bank which came next was privately owned joint
stock campany with all its stock owned by the British ancestors living in India. Since the
Government deposits were transferred to RBI after 1935, the Imperial Bank came to rely increasingly on
private deposits. About 95 per cent of the total funds of Imperial Bank
in 1946 came only through private funds,
5.2.2 Progress of Banking - Phase I1 (1947-1968)
The structure of the Indian banking till 1947 was not backed by adequate
control or directive measures. The Banking Regulation Act. 1949 provided the much
needed framework for proper supervision under RBI. 011 the Boards of directors of PSB,
there was a nominee represented from RBI and Government of India. This period
witnessed the disappearance of many smaller banks due to tight inspection by RBI.
Bigger banks' growth was facilitated by winding of business by smaller ones. This
period witnessed consolidation and growth of larger banks. There were attempts at
5. correcting the regional maldistribution in branch network, which was marked by heavy
concentration of branches at larger urban centres. Through effective branch licensing
policy, many banks were opened in rural unbanked centres. This period witnessed the
nationalisation of Imperial Bank, now called as the SBI and its Associate banks in 1955.
Between 1955 and 1968, the SBI and its Associates opened many branches. About 80
per cent of 1608 branches opened by SBI and its Associates during 1955 - 1968 were at
rural and semi-urban centres. The growth of bank branches during this period can be
seen in Table 5.1
Table 5.1: PROGRESS OF BANKING IN INDIA, 1951 - 1968
S1, State Bank of Scheduled Non-Scheduled
No. Year India and its Commercial Commercial Total
Associates Banks Banks
3. 1968 3379 5104 207 8690
Source: R. Srinivasan, Priority Sector lend in^ - A Study o f Indian Experience,
HimalayaPublishing House, Bombay 1995, p.6. Though there were welcome signs in increasing more
number of bank
branches and intensive banking network, in the absence of policy compulsion. large
private sector banks controlled by a few big industrial business houses failed to meet the
requirements of small borrowers in agriculture. activities allied to agriculture, trade.
small scale industries, transport operations. Between 196 1-7 1. the number of
borrowal accounts had come down. Flow of credit to industrial sector was greater
whereas agricultural sector was languishing for want of funds. Official recognition of
the need to have a closer look at the functioning of the Commercial banking system has
necessitated the Social Control of banks in 1968 by the NCC. The first meeting of the
NCC in March, 1968 discussed and generally agreed on matters like deposit
mobilisation and deployment of credit to the targeted groups in the form of PSL with
6. special reference to agricultural sector.
5.2.3 Progress of Banking - Phase 111 (1969-1990)
The nationalisation of 14 Commercial banks in July, 1969 was the
culmination of Social control of banks in 1968. The development of Commercial
banking in India after the introduction of social control and nationalisation of major
banks has certain unique characteristics. The class banking has become mass banking
trying to realise the socially oriented objectives stipulated for the banking system under
the policy directives of the Government that promote growth with social justice. The
following were the major objectives of bank nationalisation:
a) to promote social and economic objectives of State policy by effective execution of
plans and achieve the ideals of socialistic pattern o f society; b) to remove the control by a few so
as to make contribution of adequate credit for
agricultural and small industries and exports:
c) to give professional bent to bank management;
d) to encourage new class of entrepreneurs; and
e) to provide adequate training and reasonable service to the bank staff.
In April 1980, SIX more commercial banks were nationalised mak~ng the
T
total nationalised PSB to 20. Another milestone in the progress of the banking sector
was the setting up of W s . In July, 1975, the working group under the chairmanship of
Narasimham had recommended the setting up of RRBs as fullfledged scheduled banks
for mobilising savings and deploying credit in rural areas. These RRBs were sponsored
by Commercial banks. At the end of March, 1998 there were 196 IiRBs operating in
the country.
The banking sector has been made to serve the national economy as a
catalytic agent. It was felt that nationalisation was very essential to mob~lise the deposits
7. on a massive scale and sustain employment and to secure a more equitable distribution of
credit throughout the country. After the introduction of LBS, nationalised banks have
been identified in different selected districts of the country to prepare a blueprint for the
development of the respective districts. The designated bank in each district known as
"Lead Bank" prepares DCP and ACP. Thus the banking system has been made as an
i n s m e n t towards realising the social objectives from its earlier profit oriented
approach. Thrust was made towards PSL afker nationalisation. The PSL known as
directed credit programme has become an active mechanism and instrument in
transforming the neglected segments. Agriculture and allied activities, small scale and cottage
industries. small road and water transport operators. retail traders were
articulated under PSL. RBI has stipulated that 40 per cent of net hank credit should
flow towards priority sector. Weaker sections are taken care of under the Prime
Minister's 20-Point Programme announced first in 1975, revised in 1982 and modified
in 1986. Thrust was made by Government of India to earmark adequate outlay by banks
in implementing the 20-Point Programme after having detailed consultations with RBI.
DRI Scheme was introduced to ameliorate the poverty-stricken masses in rural and urban
areas to avail bank credit at four per cent concessional bank interest. Minority welfare is
also taken care by commercial banks after bank nationalisation. Many of bank branches
were opened in the hitherto neglected rural and semi-urban areas.
The norms for opening bank branches in different areas are as follows3:
i. Rural group includes all centres with a population of less than 10,000.
ii. Semi-urban group includes centres with a population of 10,000 to One I&.
iii* Urban group includes centres with population of One lakh to 10 lakhs.
iv. Metropolitan group includes centres with population of 10 lakhs and more.
NABARD was set up on 12.07.1982 for supporting and promoting
agriculture and rural development and to provide short-term, medium term and long
8. term credit to state Co-operative banks, RRBs and commercial banks. Refinancing
facility is made available for n o n - f m projects also by NABARD. The Industrial
Development Bank of India (IDBI) was set up in 1964 to serve as an Apex institution for
Term finance for industries in India. Besides, it also plans, promotes and develops
industries, undertakes market investments and serves as a techno-economic agency for
3~eserve Bank of India, Banbin? Statistics 1972-95 - Basic Statistical Returns,
Bombay, 1998,ppl-2. the development of industries. To take care of the small industries on a
sound
footing a subsidiary organisation of IDBI. namelj.SIDB1 was set up. Other specialised
financial institutions with Government patronage have come into existence during this
phase. This phase had witnessed the growth of financial assets in leaps and bounds.
More bank branches were opened. There was an abnormal growth of deposits and
advances particularly to the priority sectors. The diversification of financial assets had
also taken place in the form of diversified portfolio investment in mutual funds, shares,
debentures and equities. Stock markets had witnessed many changes and many new
investors from different strata entered into stock markets.
5.2.4 Progress of Banking - Phase IV (1991 - Till Date)
The advent of Narasimharn Committee on financial sector reforms
introduced sweeping changes in the financial sector particularly in the functioning of
cornrnercial banks with regard to portfolio management and flow of credit to the target
group under PSL. The Narashimham Committee had recommended that directed credit
should be phased out to 10 per cent from the stipulated 40 per cent grad~~ally. This is in
tune with the World Bank suggestions and also due to the integration of Indian economy
into global network. Thanks to this development in financial sector, non-viable bank
branches mostly in rural areas were either merged with existing viable bank branches or
closed down. This period has been witnessing many irregularities and malpractices in
9. various public sector and private banks thereby warranting the necessary corrective
action on the part of the RBI. The issue of Non performing assets has assumed
importance due to non-grounding of assets by beneficiaries. The process of financial
sector reforms initiated in 1991-92 is pursued with vigour and determination to improve
the competitiveness, operational efficiency and transparency of the financial sector. The financial
reforms touched a number of areas - monetary and credit policy issues relating
to reserve requirements. interest rates, refinancing facilities and indirect monetary control
via the securities market and matters relating to strengthening and consolidation of
banks, the prescription of prudential norms relating to asset classification and income
recognition, adequate provisioning for bad and doubtful assets. introduction of a capital
to risk-weighted assets ratio system for banks (including foreign banks) and
establishment of a strong supervisory system. All of these are expected to bring about a
significant improvement in the f~~nctioning of the banking system. One of the problems
faced by banks is the low rate of loan recoveries. This has a bearing on the accounting
standards as well as on current operations of banks. It is in this context that the
'Recovery of Debts Due to Banks and Financial Institutions Bill, 1993' was passed in
August 1993 which facilitated the establishment of Debt Recovery Tribunals for
expeditious adjudication and recovery of debts due to banks and financial institutions.
The provisions of this Act shall not apply where the amount of debt due to any bank or
financial institution or to a consortium of banks or financial institutions is less than Rs,
10 lakh or such amount, being not less than Rupees One lakh, as the Central Government
may, by notification specify. These tribunals will expeditiously deal with applications
made by bankslfinancial institutions and endeavor to dispose of such applications within
six months from the date of receipt of such applications. This period witnessed the
widening gap between the deposits and credit and thereby gradual reduction in CDR
eventually affecting the flow of credit towards PSL. The trend and progress of
10. commercial banks on the basis of certain relevant crucial indicators during the tbird and
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P l3m-n the above figures, we can deduce that the number of commercial
banks have gone up to 300 in March 1998 as against 89 numbers in 1969. The increase
in the number of Commercial banks was mainly due to the increase in W s . The fact
to be observed during 1969 to 1998 is that non-scheduled Commercial banks have come
down from 16 to one during the same period. Number of bank offices in India has gone
up from 8262 in 1969 to 64218 in March '98. There was 7.77 time increase in the
growth of bank offices over the last 29 years. Rural branches have increased to 32878 in
1998 from a mere 1833 in 1969 indicating 17.94 times increase. Semi-urban branches
have gone up to 13980 from 3342 for the same period, indicating an increase of 4.18
times. There was 6.06 times increase in urban branches from 1584 in 1969 to 9597 in
March 1998. An increase of 5.17 times has been noticed in expanding bank branches in
metropolitan areas, from 1503 numbers to 7763 numbers for the same period. Opening
of more number of branches in rural areas has facilitated intensive banking network and
thereby bringing bank to the door steps of the depositors and the loanee. 64000
population had a bank branch in 1969. Due to intensive branch licensing policy of RBI
13. particularly in rural and semi-urban areas, population per bank branch has come down to
15000 in 1998. This means that the gap has been narrowed down to the minimum and
close rapport has been established between the banks and the people,
Deposits by scheduled commercial banks have grown to a considerable
extent from a mere Rs.4646 crores in 1969 to Rs,605410 crores in 1998 denoting, an
increase of 130.31 times. The credit of scheduled commercial banks has gone to the
extent of Rs.324079 crores in 1998 from Rs.3599 crores in 1969 indicating an increase
of 90.04 times. The deposits of commercial banks as a percentage to national income
has increased fiam 15.5 per cent in 1969 to 50.1 per cent in 1997. This shows the
important role played by commercial banks in determining the national income of the Iiidian
economy. This also establishes the fact that major part of the development of
Indian economy depends upon the banking sector. Mopping up of large chunk of
deposits was mainly possible due to large network of branch expansion p~icularly in
rural areas.
The share of priority sector advances to the total credit portfolio has
moved from a mere Rs.504 crores in 1969 to Rs.93807 crores in March 1997 indicating
an increase of 186.13 times. The priority sector advances have gone up from 14 per cent
in 1969 to 34.8 per cent in 1997. The stipulated target of 40 per cent was achieved and
even exceeded in 1989. Since 1991, the share has come down and reached a level of
34.8 per cent in March., 1997. The reason for such a deceleration in growth of priority
sector advances may partly be attributed to reduction in number of bank branches in rural
areas from a maximum of 35389 in March, 93 to 3291 8 in March, 97. This might have
a direct bearing on the flow of credit to agriculture and allied activities besides non-farm
activities. Per capita deposit of commercial banks has increased from Rs.88 in 1969 to
Rs.6270 in 1998. Per capita credit has increased from Rs.68 to Rs.3356 for the same
period. This period has also witnessed the decline in CDR from 77.5 per cent in 1969 to
14. 53.5 per cent in 1998. The Investment Deposit Ratio (IDR) has gone up moderately from
29.3 per cent to 36.1 per cent in 1997. The progress of banking Sector in India was on a
very positive trend despite shortcomings in the nineties mainly in the social arena due to
implementation of structural reforms in financial sector.
5.3 Lead Bank Scheme - Rationale and Methodology
While discussing progress of banks, a prominent place should also be
given for the Lead Bank scheme which is an innovative and development oriented
Indian economy based on 'Area Approach' -
96 evolved by a study group. This study group constituted by NCC made a detailed
analysis for setting up an appropriate organisational framework for implementing various
social objectives set before the country. The Committee report known as Gadgil
Committee Report had suggested that banks should adopt area approach and
recommended allotment of districts to different commercial banks to take lead role and
act as consortium leader. This was mainly intended to the main task of identifying the
territorial and functional credit gaps and of making recommendations for the extensive
and adequate institutional credit on reasonable terms to neglected sectors and areas.
The purpose of nationalisation of 14 Commercial bailks in July, 1969 was
to make available the adequate flow of institutional credit to the economy in general and
the rural areas and the weaker sections in particular, After nationalisastion of banks, the
RBI had appointed a Committee of Bankers under the Chairmanship of Nariman to
evolve a co-ordinated programme for setting up of adequate banking facilities in the
unbanked and underbanked districts on the lines of the Gadgil study group. This
Committee had submitted its report on 15' November 1969 recommending that banks
should be allotted specific districts to take care of an integrated area approach relating to
the particular district. The allotted bank for the specified district would act as a Nodal or
15. Lead Bank which would take a lead role in surveying the potentials available in the area.
The LBS was endorsed by the Standing Committee of Bankers at the meeting held in the
RBI on 12' December 1969. After giving a concrete shape to 'area approach', the LBS
come into operation. Banks were designated as Lead Bank on the basis of :
a)
the size of the bank;
b)
the adequacy of its resources for handling the volume of work; c )
continuity of districts so that a cluster of each district could emerge;
d) regional operation of banks and the desirability for each state to have more than
one Lead Bank operating in the area and to the extent possible for each bank to
operate in more than one State.
Though the Lead Bank is treated as the custodian bank as far as a
particular district is concerned, it does not mean that it has a monopoly of banking
business in that district . It is expected to act as a consortium leader rather than as a big
brother. The major functions of the LBS as spelt out by RBI are:
i. surveying the lead districts on resources and potential for banking development,
ii. surveying the number of industrial and commercial units and other
establishments and farms which do not have banking accounts or depend mainly
on money lenders and increasing their own resources by the creation of surpluses
from the additional production financed by the banking system;
iii. examining the facilities for marketing of agricultural and industrial production,
storage and warehousing-spare and linking of credit with marketing;
iv. surveying the facilities for the stocking of fertilizers and other agricultural inputs
and repairing and servicing of equipment;
16. v. recruiting and traning the staff, which would offer advice to small borrowers and
farmers in the priority sectors, covered by the proposed credit insurance schemes
and follow-up and inspection of the end use loans;
vi. assisting other primary lending agencies; and
vii. maintaining contacts and liaison with Government and quasi-Government
agencies. RBI has designed common formats to elicit information from all the
designated Lead Banks on some basic statistical information pertaining to the allotted
district(s). In order to monitor the implementation of LBS effectively. as per the
guidelines and directions of RBI, each Lead Bank constituted district forum. Lead Banks
are expected to enter into a meaningful business with the cornnlercial banks, RRBs, co-
operative institutions and relevant developmental departments through an established
forum called as DCC with the following objectives.
a)
to evolve methods for exchanging information between banks about intending
borrowers and lending to priority sectors in the districts.
b)
to identify bankable schemes arnong those furnished by the Govt. and on its own
and work-out suitable schemes to finance them and
c)
to serve as a clearing house for discussing problems arising out of financing
priority sectors.
The DCC has the following functions :
a)
to examine whether the credit supplied by the cormnercial banks and co-
operatives is adequate from the point of view of the borrowers.
17. b)
to discuss as to how the small loans to the socially and economically weaker
sections can be efficiently disbursed.
c)
to find out the measure for avoiding the danger of multiple or double financing.
d)
to discuss how the State agencies and banks can help the small scale industries to
prepare their schemes to increase the production.
e)
to evolve methods for ensuring better co-ordination between commercial and co-
operative banks in exchanging credit information and
f)
to assess tht: b-g potentials of the district periodically The DCC was formed at the district level covering
all the 338 districts in
initially. The District Collector or the District Magistrate used to preside over these
meetings by convention built up by the bankers. There was no Government order
directing the district authorities to preside over these meetings. In order to discuss the
problems identified focussed at the DCC, a State level forum was constituted in 1976 at
the instance of Government of India. The State Level Bankers' Committee thus came
into existence at the State for bringing about better co-ordination among the banks by
making all the banks as members of this committee. Banks having large network of
bank branches and handling a fairly large volume of banking business in the State was
designated as convenor of this Committee.
Besides, Regional Consultative Committee (RCC) was set-up at each
region grouping all the contiguous States/Union Territories. The States of Tamil Nadu,
Kerala, Karnataka, Andhra Pradesh and Union Territories of Pondicherry and
18. Lakshadweep constitute the Southern Regional Consultative Committee. Through this
forum, dialogue and exchange of ideas are established between the Union Finance
Minister, RBI and Chairman of various public sector banks on the one hand and Chief
Ministers / Finance Ministers of various States and Union Territories on the other hand,
for better implementation of banking schemes including the LBS for balanced regional
development.
As at the end of December, 1989 lead districts under LBS have increased
to 444 from 338. SBI and its Associates, all Public Sector Banks and one Private
Sector Bank were allotted lead districts. By March 1999 567 districts have been covered
under the LBS in the country as shown in Table 5.3. Table 5.3: DISTRICTS ALLOCATED TO COMMERCIAL
RANKS UNDER LEAD
BANKS SCHEME - ALL INDIA.
Sl.
Number of Number of Number of
No. Name of the Lead Bank
Lead Districts Lead Districts Lead Districts
originally in 1989 in 1999
Public Sector Banks
1. State Bank of India and its
Associates
2. Allahabad Bank
3. Andhra Bank
4. Bank of Baroda
5 . Bank of India
6. Bank of Maharashtra
7. Canara Bank
19. 8. Central Bank of India
9. Corporation Bank
10. Dena Bank
1 1. Indian Bank
12. Indian Overseas Bank
13. New Bank of India
14. Oriental Bank of Commerce
1 5. Punj ab National Bank
1 6. Punj ab and Sind Bank
17. Syndicate Bank
1 8. Union Bank of India
19, United Bank of India
20. United Commerical Bank
21. Vijaya Bank
Sub-Total
Private Sector Bank
1 . Jammu & Kashmir Bank Ltd
2. Bank of Rajasthan
Grand Total
*Since merged with Punjab National Bank.
Source: [a] Reserve Bank of India Bulletin, Bombay January 1970,
[b] Sfivasan, Priority Sector Lending - A study o f Indian Experience,
HimaIayrm Publishing House, 1995, Bombay, pp.34-37.
[c] Eyed on Reserve Bank of India Sources, Chennai, 1999. It was found that even with the
implementation of various welfare
schemes by the Government and also with the large dispensation of credit by the
20. ~ommercial banks under LBS, majority of the rural population could not cross the
poverty line and were still living a hand to mouth existence. To find out the reasons for
this state of affairs, RBI advised the top Executives of PSB in 1987 to conduct on the
spot survey of villages in 88 districts of 21 states. Survey was carried out by the top
Executives themselves. The Report submitted by them revealed the following
defficiencies:
I . even though large credits were dispensed by banks, the dispensation was sporadic
and many pockets of the rural area were left uncovered by banks,
2. the inflow of credit in rural areas did not show a corresponding increase in
productivity,
3, the implementation of various Governlent schemes lacked motivation.
5.3.1 Service Area Credit Plan (SACP)
The RBI organised a seminar in 1988 in which the top Executives of all
the Public Sector Banks participated and was presided over by the Minister of State for
Finance. An Action Plan was evolved in the seminar to remove the deficiencies found in
the lending system of the banks and to have a proper flow of credit for the entire ma1
population on an objective and realistic basis. It was decided in the seminar, a cluster of
villages would be allotted to each bank. The villages allotted would be called the
Service Area of that particular bank branch, wherein it would be lending exclusively and
extensively. The needs of each one of the village people would be looked after and a
village credit plan based on the needs of the people, the resources of the bank would be
prepared which would have a direct impact on the lives of the rural poor and would also achieve the
goal of the Government of India namely eradication of rural poverty. Thus
the concept of Service Area Credit Plan (SACP) under I.BS has been evolved.
Government of India has approved this and the SACP has become operational from
01.04. 1989. The service area concept involves the following five major operational
21. aspects:
a)
identification and allocation of Service Area for each bank branch;
b) survey of villages in the Service Area for assessing the potential for lending
activities and identification of beneficiaries for assistance:
c) Preparation of Credit Plan on an annual basis for the Service Area by each
branch;
d) Co-ordination between credit institutions on the one hand and field level
development agencies on the other hand for effective implementation of Credit
Plans and ;
e) System of continuous monitoring of progress in the implementation of the plans.
The villages have been allocated to all the commercial banks by a
committee comprising of:
i) Lead District Officer of the RBI as leader,
ii) Lead Bank Officer as Convenor,
iii) Officer from NABARD as member.
Under Service Area Approach, the methodology of planning itself has
been changed from district level to village level. Previously the ACP was prepared at the
district level by the Lead Bank and the bank branches operating were to implement the
Plan. Now under Service Area Approach, the planning starts at the grassroot level. The
branch managers themselves prepare the village plan after undertaking a detailed study
of their command area and taking into account the potential available in the villages for various
activities. Before preparing the Service Area plan by the branch manager. the
Potential Linked Credit Plan (PLCP) prepared by NABARD is also taken into account.
After which the village level plans are approved by Block Level Bankers' Committee
(BLBC) and then the DCP is prepared by Lead Bank. This grassroot level planning
22. enables proper allocation of funds to various activities based on the needs of the villages.
This will enable a proper and even growth under all sectors particularly under the
priority sector.
5.4 Progress of Banking in the Union Territory of Pondicherry
The IIiary4 of Anandaranga Pillai provides some clues about the system
of banking in 18" century Pondicherry. During the French regime, sowcars were
the professional money lenders in the Union Territory of Pondicherry, Some money
lenders used to charge 18 to 36 per cent rate of interest. There was also a practice of
charging around 100 to 120 per cent of interest per annum by some unscrupulous money
lenders. French Government had setup Ment do I Dioto a bank like pawn ofice in 1827
to overcome the practice of charging higher rate of interest by money lenders. The
Institution had provided credit assistance at an eight per cent rate of interest to the
needy population particularly to small scale agriculturists. The point to be observed here
is that even before the introduction of the concept of PSL in Indian Soil on a preferential
scale, the French Government had realised it 142 years back itself for the need to
provide credit assistance to the small scale agriculturist at eight per cent which is well
below the priority sector rate of interest of 10 to 12.5 per cent charged now. The first
and the foremost Commercial bank branch on the modem line of today, namely,
ranci cis Cynil Antony (Ed), &d., pp.637-647. Indo-China Bank was set up in Pondicherry in 1875 by a
Presidential decree which had
dealt all kinds of banking operations. Indian based banks had opened their branches in
1948. The first Indian based bank to have opened the bank branch in Pondicherry was
United Commercial bank and then the Indian Overseas bank had come up. State Bank of
India had set up a pay office in 1954 and a full fledged bank branch in 1955, Indian
Bank had opened its first branch in Pondicherry in 1958. Thus four Commercial banks
were in operation on the eve of defacto merger of Pondicherry with the Union of India.
23. The Union Territory of Pondicherry has been witnessing a phenomenal
growth of banking activities since bank nationalisation in 1969, thanks to the growing
commercial activities in this important Indo-French centre. In 1961, there were 4 bank
branches with a deposit of Rs.269 lakhs and an advance of Rs.260 lakhs. The CDR was
as high as 96.65 percentage. In 1969, that is, on the eve of nationalisation of banks, ol~ly
12 bank branches were in operation with a deposit of Rs. 552 lakhs and an advance of
Rs. 480 lakhs. Since nationalisation, phenomenal banking growth has taken place. By
March 1998~, 78 bank branches, that is, 58 in Pondicherry, 13 in Karaikal, 5 in Mahe
and 2 branches in Yanam are fbnctioning.
The progress of the banking seen at the all India level was reflected in the
Union Territory of Pondicherry also. The indicators of progress of banking are also
shown in Table 5.4.
'lndian- Bank (Lead Bank), Agenda Notes for 59" State Level Bankers'
~ o d t t e e , Meeting, Pondicherry, August 1999. L d h
ePQw
E z c It may be seen from the Table 5.4 that the Union Territory of Pondichenj
had got 12 branches only in 1969 and this has gone up to 26 in 1974. 44 in 1979, 59 in
1983 and 70 in 1989. The seventies and eighties have brought many bank branches to the
Union Territory, thanks to bank nationalisation. 78 bank branches have come into
operation by March 1998. The amount of deposits rnobilised till March 1998 was
Rs.967 crores. The credit advanced for the same period was Rs.347 crores which works
out to a CDR of 35.90 per cent as against the all India average of 53.5 per cent.
Pondicherry has emerged as one of the top 100 major centres according to size of
deposits and credit as of March 1999. As per ranking, it occupies 81th place in deposit
mobilisation and 88" place in credit availment. Despite all these positive developments.
24. a disturbing trend observed is that the CDR has been declining steadily since 199 1 in this
Territory. This is detrimental to the economic development of the Union Territory of
Pondicherry. Though declining CDR is an all India phenomenon, the trend noticed in
the Union Territory of Pondicherry is more alarming which needs immediate corrective
measures on the part of commercial banks and RBI. This Territory had witnessed more
than the prescribed flow of priority sector credit throughout eighties and the earlier part
o f nineties. The advances towards priority sector has been declining since 1994 due to
poor deployment of credit to various segments in Pondicherry economy despite the
implementation of LBS in the Union Territory of Pondicherry as can be seen from the
succeeding chapters.
The Banking sector in India has always been one of the most preferred destinations
for employment. In this decade, this sector has emerged as a sunrise sector in the
Indian economy. Banking sector index has grown at a compounded annual rate of
over 51 per cent since the year 2001.The Banking Industry is recruiting in a big
way. In the next five years , banks will have to recruit almost 7.5 lakh people .
Now, banks have diversified their activities and getting into new products and
services that include opportunities in credit cards, consumer finance, wealth
management, life and general insurance, investment banking, mutual funds,
pension fund regulation, stock broking services, custodian services and private
equity etc. Further, most of the leading Indian banks are going global, setting up
offices in foreign countries themselves or through their subsidiaries.
The expansion of the banking sector and its convergence with the other financial
sectors such as insurance,NBFCs and Capital markets,retirement of the existing
25. employees and financial inclusion have created more number of opportunities in the
banking sector.
Infrastructure, Risk Management, Banking and Financial Services, Management
Information Systems and Customer Relations Management are a few areas where
specialization is expected.
INTRODUCTION
A bank is an institution that deals in money and its substitutes and provides other financial
services. Banks accept deposits and make loans or make an investment to derive a profit from
the difference in the interest rates paid and charged, respectively.
In India the banks are being segregated in different groups. Each group has their own benefits
and limitations in operating in India. Each has their own dedicated target market. Few of them
only work in rural sector while others in both rural as well as urban. Many even are only catering
in cities. Some are of Indian origin and some are foreign players.
India’s economy has been one of the stars of global economics in recent years. It has grown by
more than 9% for three years running. The economy of India is as diverse as it is large, with a
number of major sectors including manufacturing industries, agriculture, textiles and handicrafts,
and services. Agriculture is a major component of the Indian economy, as over 66% of the
Indian population earns its livelihood from this area. Banking sector is considered as a booming
sector in Indian economy recently. Banking is a vital system for developing economy for the
nation.
However, Indian banking system and economy has been facing various challenges and
problems which have discussed in other parts of project.
INDIAN BANKING SYSTEM
Without a sound and effective banking system in India it cannot have a healthy economy. The
banking system of India should not only be hassle free but it should be able to meet new
challenges posed by the technology and any other external and internal factors. For the past
26. three decades India's banking system has several outstanding achievements to its credit. The
most striking is its extensive reach. It is no longer confined to only metropolitans or
cosmopolitans in India. In fact, Indian banking system has reached even to the remote corners
of the country.