Banking Act Presentation - Unitedworld School of Business

7/28/2019 Banking Act Presentation - Unitedworld School of Business

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BANKS IN INDIA


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Establishment of RBI

The reserve bank of India was established

on April 1,1935 in accordance with the provisions of

the reserve bank of India Act, 1934.

The central office of the reserve bank was

initially in Calcutta but was permanently moved to

Mumbai in 1937. the central office is where the

governor sits and where policies are formulated.


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Objectives of RBI

To maintain the internal value of the nationscurrency.

To preserve the external value of the currency

To secure reasonable price stability.

To promote economic growth with risinglevels of employment, out and real income


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Functions of a RBI

Monetary policy functions Currency issue and management Maintaining value of currency Anchor economic growth expectation Monetary regulation and management

Regulation of interest rates Financial sector regulation and supervision Exchange management and control Credit control Liquidity management Clearing and settlement Development of financial market Policy oriented research Collection of data and publication of reports Institution building


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Role of the Reserve Bank of India

Banker to the government

Banker to the banks

Banks supervision Monetary regulation and management

Foreign exchange and management

Promotional functions


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Supervisory/regulatory function of RBI

Licensing of banks

Approval of capital, reserves and liquid assets ofbanks

Branch licensing policy

Inspection of banks

Control over management

Audit

Credit information service Deposit insurance

Training and banking education


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RBI organization structure


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CommercialBanks


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Definition of Commercial Banks An institution which accepts deposits, makes business loans,

and offers related services. Commercial banks also allow for a variety of deposit accounts,

such as current, savings, and time deposit. These institutions are run to make a profit and owned by a group

of individuals. Commercial banks offer services to individuals; they are primarily

concerned with receiving deposits and lending to businesses.


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Sl. No Name of Banks Year of Incorporation

1 Allahabad Bank 1865

2 Andhra Bank 1923

3 Bank of Baroda 1908

4 Bank of India 1906

5 Bank of Maharashtra 1935

6 Canara Bank 1906

7 Corporation Bank 1906

8 Dena Bank 1938

9 Indian Bank 1907

10 Oriental Bank of Commerce 1943

11 Punjab National Bank 189512 Syndicate Bank 1925

13 UCO Bank 1943

14 Union Bank of India 1919

15 United Bank of India 1950

16 Vijaya Bank 1931

Nationalized Commercial Banks


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Functions of Commercial Bank

Primary Functions

Accepting Deposits :

Current Deposits

Saving Deposits

Fixed deposits

Recurring Deposits

Miscellaneous Deposits.

Granting Loans and Advances :

Short-term Loans

Cash Credit

OverdraftDiscounting of Bills.

Long-term Loans

Demand Loan

Term Loan.


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Secondary Functions :

Agency Services :

Collection and payment of cheques and bills on behalf of the customer;

Collection of dividends, interest and rent, etc. on behalf of the customer, if so

instructed by them;

Payment of rent, interest, insurance premium, etc. on behalf of customers,

if so instructed; Acting as agents or correspondents on behalf of customers for other banks and

financial institutions at home and abroad.

General utility Services :

Issuing letters of credit and travellers' cheques; Underwriting of shares, debentures, etc.;

Safe-keeping of valuables in safe deposit locker;

Supplying trade information and statistical data useful to customers;

Acting as a referee regarding the financial status of customers;

Undertaking foreign exchange business

Continue


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Recent Development in Commercial Banking

Interest rate deregulation

Electronic Clearing Services (ECS) Electronic Funds Transfer (EFT)

The opening of new clearing houses, interconnection of clearing

houses through the Indian Financial Network (INFINET)

The development of a Real-Time Gross Settlement (RTGS) System

Centralized Funds Management System (CFMS)

E-banking

E-payment

Automated teller machines(ATM)

Negotiated Dealing System (NDS)

The Structured Financial Messaging System (SFMS).


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What is Foreign Bank ????

A foreign bank is a bank that was established in adifferent country and is also serving customers ofanother country.

Foreign banks operate in India, just the way thelocal banks do.

They are bound by all the rules and regulationsthat are applicable to banks based out of India

and they are governed by the Reserve Bank ofIndia that controls/governs all banks operating inIndia.


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Some of the foreign banks that operatein India are:

Citibank

HSBC

Standard Chartered

Barclays

Etc.


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Foreign Branch Bank

Banks often open a foreign branch in order to provide more services

to their multinational corporation customers.

However, operating a foreign branch bank may

be considerably complicated because of the dual banking regulations

that the foreign branch needs to follow.

For example :-

suppose the Bank of America opens a foreign branch bank in Canada.

The branch would be legally obligated to follow both Canadian and

American banking regulations.


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Characteristics Of Foreign Banks

They tend to increase the efficiency of the local bankingsystem, bring in more sophisticated financial servicesand have the ability to nurse weak banks back tohealth.

It plays a great role in boosting Indian economy andalso lends to those who needs it.

It also bought latest techniques to serve the customersin the most effective manner and known forintroducing several banking practices.


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Contd..

Foreign banks are also known for uprooting the

unemployment in India by offering lots of job

opportunities .

It offers good packages and tantalizes the sense of

youngsters by offerings several other job facilities.

Besides, it also contributed its tremendous effort to

improve Indian foreign exchange market.


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CO-OPERATIVE BANKS

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Definition

A co-operative bank is a financial entity whichbelongs to its members, who are at the same timethe owners and the customers of their bank. Co-operative banks are often created by persons

belonging to the same local or professionalcommunity or sharing a common interest. Co-operative banks generally provide their memberswith a wide range of banking and financial

services (loans, deposits, banking accounts). InIndia co-operative banks are regulated with theRBI and governed by Banking Regulations Act1949 and Co-operative Societies Act, 1965.


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E bli h


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Establishments

Co-operative bank performs all the main banking functions of depositmobilisation, supply of credit and provision of remittance facilities.

Co-operative Banks belong to the money market as well as to the capitalmarket.

Co-operative Banks provide limited banking products and arefunctionally specialists in agriculture related products. However, co-operative banks now provide housing loans also.

UCBs provide working capital loans and term loan as well.


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The chief functions of Co-operative banks are :

To attract deposit from non-agriculturist.

To use excess funds of some societies

temporarily to make up for shortage in

another.

To supervise and guide affiliated societies.

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Finance Function:

Cooperative banks in India finance rural areas under:

Farming

Cattle

Milk

Personal

Finance

Cooperative banks in India finance urban areas under:

Self-employment

Industries

Small scale units Home finance

Consumer finance

Personal finance

T f ti b k


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Types of co-operative banks


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SCHEDULED BANKS


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Cl ifi ti


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Classification

SCHEDULED BANKS

PUBLIC SECTORSCHEDULED BANKS

PRIVATE SECTORSCHEDULED BANKS

SCHEDULEDFOREIGN BANKS

F ti


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Functions

Transfer of funds

Acceptance of deposits

Offering those deposits as loans for variouspurpose

Purchase of houses, equipments, capitalinvestment purposes etc.

The Indian Government presently hires the

scheduled banks banks for various purposes liketax collection and refunds, payment of pensionsetc.

C O i


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Campus Overview

907/A Uvarshad,

Gandhinagar

Highway, Ahmedabad

382422.

Ahmedabad Kolkata

Infinity Benchmark, 10th

Floor, Plot G1,

Block EP & GP,

Sector V, Salt-Lake,

Kolkata 700091.

Mumbai

Goldline Business Centre

Linkway Estate,

Next to Chincholi Fire

Brigade, Malad (West),

Mumbai 400 064.


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Thank you

Banking Act Presentation - Unitedworld School of Business

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