description of indian banking system

1. Submitted To Submitted By
Mr. Praveen Singh Thakur Vipul Rajpurohit
IT Dept. MBA I Sem.

2. MEANING
The banking system plays an important role in promoting economic growth
not only by channeling saving into investment but also by improving allocative
efficiency of resources.
An efficient banking system is now regarded as a necessary pre-condition for
growth.
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3. STRUCTURE OF BANKING SYSTEM
RBI
SCHEDULED BANKS
COOPERATIVE
BANKS
COMMERCIAL
BANK
NON-
SCHEDULED
BAKS
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4. COOPERATIVE BANKS
DISTRICT CENTRAL
COOPERATIVE
BANKS
STATE COOPERATIVE
BANKS
CENTRAL
COOPERATIVE
BANKS
Co-operative banks are the banks whose main
objective is to provide financial assistance to
economically weaker section of the society.
Co-operative banks are registered under the
cooperative societies Act, 1912. and regulated by
the Reserve Bank Of India under the banking
regulation act, 1949 and banking laws act, 1965.
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5. COMMERCIAL BANKS
A Commercial bank is a type of bank that
provides services such as accepting deposits,
making business loans, and offering basic
investment products that is operated as a
business for profit.
INDIAN
BANKS FOREIGN
BANKS
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6. INDIAN BANKS
Public Sector Banks are a major type of bank in india,
where a majority stake (i.e. more than 50%) is held by a
government. The shares of these banks are listed on
stock exchanges.
Private sector banks in india are banks where the majority of
the shares or equity are not held by the government but by
private shareholders.
PUBLIC
SECTOR
PRIVATE
SECTOR
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7. LIST OF PUBLIC SECTOR BANKS
State bank of
india
Punjab national
bank
Canara bank
Uco bank
Union bank of india
Bank of baroda
Bank of india
Bank of maharashtra
Punjab and sind
bank
Indian overseas bank
Indian bank
Central bank of
india
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8. LIST OF PRIVATE SECTOR
BANKS
HDFC
ICICI
AXIS
Yes bank
Kotak
Mahindra bank
Bandhan bank
Federal bank
Indusland
bank
RBL Bank
Karur vysya
bank
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9. RESERVE BANK OF INDIA - (RBI)
 The Reserve Bank of India (RBI) is the central bank of india,
 The RBI was originally set up as a private entity on 1 April 1935, but it was
nationalized on 1 January 1949.
 The headquarter of RBI is located at Mumbai, Maharashtra.
 The main purpose of the RBI is to conduct consolidated supervision of the
financial sector in india, which is made up of commercial banks, financial
institutions, and non-banking finance firms.
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10. FUNCTIONS OF RBI
 Issue of currency
 Banker and debt manager to government
 Banker to bank
 Financial supervision
 Regulator and supervisor of the financial system
 Regulator and supervisor of the payment and settlement systems
 Managing foreign exchange
 Regulator of the banking system
 Development role
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11. Instruments of RBI and Monetary policy
Monetary policy :- Monetary policy is a way for the RBI to control the supply
of money in the economy. So these credit policies help control the inflation
and in turn help with economic growth and development of the country. The
various instruments of monetary policy that the RBI has at its disposal.
1. Open market operation :- open market operation is when the RBI
involves itself directly and buys or sells short-term securities in the open
market. This is a direct and effective way to increase or decrease the supply
of money in the market. It also has a direct effect on the ongoing rate of
interest in the market.
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12. 2. Bank Rate :- One of the most effective instrument of monetary policy is the
monetary policy is the bank rate. A bank rate is essentially the rate at which the
RBI lends money to commercial banks without any security or collateral. It is also
the standard rate at which the RBI will buy or discount bills of exchange and other
such commercial instruments.
3. Cash Reserve Ratio :- CRR is the portion of deposits with the commercial
banks that it has to deposit to the RBI. The RBI will adjust the said percentage to
control the supply of money available with the bank. And accordingly, the loans
given by the bank will either become cheaper or more expensive.
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13. 4. Statutory Liquidity Ratio :- SLR is the percent of total deposits that the
commercial banks have to keep with themselves in the form of cash
reserves or gold. So increasing the SLR will mean the banks have fewer
funds to give as loans thus controlling the supply of money in the
economy. And the opposite is true as well.
5. Repo Rate :- Repo rate is the rate at which the RBI lends money to
commercial banks in the event of any shortfall of funds. Repo rate is used
by monetary authorities to control inflation.
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14. POLICY RATES AND RESERVE RATIOS
Policy Rates
Policy repo rate 5.40 %
Reserve repo rate 5.15 %
Marginal standing facility rate 5.65 %
Bank rate 5.65 %
Reserve Ratios
Cash reserve ratio (CRR) 4.00 %
Statutory liquidity ratio (SLR) 18.75 %
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15. Fiscal Policy :- Fiscal policy is the means by which a government adjusts its
spending levels and tax rates to monitor and influence a nation’s economy. It is
the sister strategy to monetary policy through which a central influences a
nation’s money supply.
A policy under which government uses its expenditure and revenue program to
produce desirable effects and avoid undesirable effects in the national income,
production and employment.
FISCAL POLICY
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16. Basis for
Comparison
FISCAL POLICY MONETARY POLICY
Administered
by
Ministry of finance Central bank
Nature The fiscal policy changes every
year.
The changes in monetary policy
depends on the economic status
of the nation.
Related to Government revenue &
expenditure
Bank & credit control
Focuses on Economic growth Economic stability
Policy
instruments
Tax rates & government spending Interest rates & credit ratios
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17. INSTRUMENTS OF FISCAL POLICY
 Budgetary surplus and deficit
 Government expenditure
 Public debt
 Taxation
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