Post on 09-Dec-2015
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BANKING INDUSTRY
A Glimpse of Banking sector
Phase-1Early phase from 1786 to 1969 of Indian Banks
Phase-2 Nationalization of Indian Banks and up to 1991 prior
to Indian banking sector Reforms Phase-3New phase of Indian Banking System with the advent
of Indian Financial & Banking Sector Reforms after 1991
Phase-1
GENERAL BANK OF INDIA 1786(FIRST BANK)
RESERVE BANK OF INDIA 1935
Slow growth and periodic failure
THE BANKING COMPANY ACT 1949
People mostly save in postal deposits.
Phase-2
Nationalization of imperial bank of India and formation of sate bank of India(1955)
Nationalization of SBI and Subsidiaries(1960)
Insurance cover extended to deposits
Creation of credit guarantee corporation
Creation of regional rural banks
Phase-3
Entry of Foreign Banks
Phone Banking and Net-Banking
Shelter from external macroeconomic shock
System become more convenient and swift
WHAT IS BANK?
A banker or bank is a financial institution whose primary activity is to act as a payment agent for customers and to borrow and lend money. An institution where one can place and borrow money and take care of financial affairs; A branch office of such an institution. The first modern bank was founded in Italy in Genoa in 1406, its name was (Bank of St. George).
FUNCTIONS OF BANKSAccepting Deposits from public/others (Deposits).Lending money to public (Loans).Transferring money from one place to another (Remittances).Acting as trustees.Keeping valuables in safe custody.Government business.
RBI
Scheduled
Commercial
Public Private Foreign RRB
Cooperative
Urban Rural
Unscheduled
TYPES OF BANKS
Public sector BanksPrivate sector BanksCo-operative BanksDevelopment Bank/Financial institutions
Public sector Banks
Some Public Sector Banks in India: Central Bank of India Corporation Bank Dena Bank Bank of IndiaIndian Overseas Bank Oriental Bank of Commerce Punjab & Sind Bank
Private sectors Banks
New generation private banks
• ICICI Bank
• IDBI Bank
• Axis bank
Foreign banks operating in India
• HSBC BANK
• CITI BANK
• ABN-AMRO BANK
• STANDARD CHARTED BANK
CO-OPERATIVE BANKSThe Co operative banks in India started functioning almost 100 years ago. The Cooperative bank is an important constituent of the Indian Financial System.They are setup to provide easy loans to farmers or other persons to set up his buisness.They are non profitable banks.Cooperative banks in India finance rural areas under: •Farming •Milk •Personal finance Some example of co-operative banks in India-•IDBI BANK(INDUSTRIAL DEVELOPMENT BANK OF INDIA)•IFCI BANK(INDUSTRIAL FINANCE COOPERATION OF INDIA)•APEX BANK
The Reserve Bank of India
History:-
Become operational on April 1,1935 Nationalized in the Year 1949.
Major objectives:-
Regulate the issue of banknote. Maintain reserves with a view to securing monetary stability. To operate the credit and currency system of the country to its
advantage.
Functions of RBI
The fuctions are classified into three heads:-
Traditional functions
Promotional functions Supervisory functions
Traditional functions
Monopoly of currency notes issueBanker to the Government (both the central
and state) Fight against economic crisis and ensures
stability of Indian economy.Controller of ForEx and credit Maintaining the external value of domestic
currency
Promotional functions
Extension of the facilities for the small scale industries
Innovating the new banking business transactions.
Extension of the facilities for the provision of the agricultural credit through NABARD
Supervisory functions
Granting licence to Banks. Periodical review of the work of the
commercial banks. Control the non-banking finance corporation.
HOW IT CONTROLS BANK & ECONOMY
TOOLS:-CRR( CASH RESERVE RATIO): 5.5%
REPO RATES(RR):7.5%
REVERSE REPO RATE(RRR): 6.0%
STATUTORY LIQUIDTY RATIO (SLR):24%
BANK RATE: 6.0%