• A bank is a financial
institution that accepts
deposits and channels
those deposits into lending
Functions Of Banks
• Accepting Deposits
• Lending Money
• Remittances (A remittance is a transfer of money
by a foreign worker to his or her home country.)
• Locker’s Facility
• Foreign Exchange Business
• First bank started in 1786.
• RBI became central bank in
• Nationalized in 1969.
• Liberalization occurred in 1991.
The Public Sector Banks(PSBs), which are the base
of the Banking sector in India account for more
than 78 per cent of the total banking industry
The Private Sector Banks are making tremendous
progress. They are leaders in Internet banking,
mobile banking, phone banking, ATMs
• The Indian Banking Industry can be
Types of banks
•Lets take State Bank of India and its associate banks called the State Bank Group
•20 nationalized banks
•Regional rural banks mainly sponsored by public sector banks
•Old generation private banks
•New generation private banks
•Foreign banks operating in India
•Scheduled co-operative banks
•State co-operative Banks
•Central co-operative banks
•Primary Agriculture Credit Societies
The requirements for the issue of a bank
licence vary between jurisdictions but
• Minimum capital
• 'Fit and Proper' requirements for the bank's
controllers, owners, directors, and/or senior
• Approval of the bank's business plan as
being sufficiently prudent and plausible.
Major players in the
Indian Banking sector
State Bank Of India.
Punjab National Bank.
Bank of Baroda.
HERFINDAHL INDEX: Public sector
source: Capitaline Database
Challenges faced by
Banking industry in India
Deregulation: This continuous deregulation
has made the Banking market extremely
competitive with greater autonomy,
operational flexibility and decontrolled
interest rate and liberalized norms for foreign
• New rules: Banks are transforming to
universal banking, adding new channels
with lucrative pricing and freebees to offer.
Economies of scale
• banking consolidation will result in a small
number of large monopoly banks that can
achieve substantial economies of scale and
outperform small competitors.
• But research suggests that small banks are
sometimes more efficient than their large
counterparts. One competitive strategy
undertaken by numerous small banks is
• it is not necessary to be large to be efficient
for the banks with loan specialization.
• Growth have been more qualitative.
• Based on then projections made in the
“India Vision 2020”.
• Total asset of all scheduled commercial
banks is estimated at Rs.40,90,000
crores(end march 2012).
• Expected to grow at an annual composite
rate of 13.4%.
Job Opportunities for MBA in
• Specialist Officers.
• Loan Officers.
• Assistant Manager.
I Public sector Banks recruit mainly graduates , MBAs,CAs
and CFAs at the entry level on the basis of All India Level
• However professionals like engineers, doctors,
technologists, lawyers, ex-defence officers etc are
recruited on senior positions through All India tests.
II Private sector/Foreign Banks prefer to take MBA's, CA's
etc at junior positions
• through Campus recruitment and interviews.
• However, at the senior positions they opt for
• Thus the officers from Public sector Banks become the
natural choice for such positions.
• Thus job-hopping has become an well-accepted norm
in the Industry.