1. Private Banks & RRB
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Transcript of 1. Private Banks & RRB
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Private banks
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Introduction
Private banking in India was practiced sincethe beginning of banking system in India. Butafter the nationalization of banks in 1969, nonew banks were allowed to be set up in theprivate sector as it was a feeling that bankingshould not be allowed to go in private hands.In the last decade of 20th century it was feltthat there was increasing need to introducegreater competition & the first Private Bank inIndia to receive an in principle approval from
the Reserve Bank of India was HousingDevelopment Finance Corporation Limited, aspart of the RBI's liberalization policy of theIndian Banking Industry. Those Banks whichare established as RBIs liberalisation policy
are known as New private banks & thoseworking before that are known as Old Private
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old Private Sector Banks inIndia
The banks operating on India evenbefore 1990 are called as old privatesector banks & those who got license
after 1994 are known as new privatesector banks. There are about 25private sector banks in India whichare categorized by the RBI as OldPrivate Sector Banks and New PrivateSector Banks.
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The New Private SectorBanks :
Bank of Punjab Ltd. (since merged withCenturian Bank)
Centurian Bank of Punjab (since mergedwith HDFC Bank)
Development Credit Bank Ltd.HDFC Bank Ltd. ICICI Bank Ltd. IndusInd Bank Ltd.
Kotak Mahindra Bank LtdAxis Bank (earlier UTI Bank)Yes Bank Ltd.
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Regional Rural Bank (RRBs): Rural banking in India started since the establishment
of banking sector in India. Rural Banks during theirinitial days mainly focused upon the agri sector.Regional rural banks in India were present in almostevery corner of the country and extended a help in thegrowth of the country by way of support to Rural
economy. Regional Rural Banks in India (RRBs) were established
in October 2, 1975. Regional Rural Banks in India arevigorous part of the rural credit system of the country.
The main goal of establishing regional rural banks in
India was to provide credit to the rural people.
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Cont. RRBs were setup to address the need of regionally
oriented rural banks that can address the concerns and
requirements of the rural people with local feel & withsimilar level of professionalism of commercial banks.
Major concern of RRBs has been financial viability. Anumber of committees were formed to find out solution.
Studies were conducted to find out the factors thatinfluence RRBs performance. The roles played by thesponsor banks were also analyzed. Performance of RRBStill last decade was very poor with huge accumulatedlosses, Very High NPA levels, Low recovery rates & such
other problems.
