Banking Services

Banking Service in India
I. HISTORY OF BANKING IN INDIA

There are three different phases in the history of banking in India.
1) Pre-Nationalization Era. 2) Nationalization Stage. 3) Post iberalization Era.

1) Pre-Nationalization Era!
In India the b"siness of banking and #redit $as pra#ti#es e%en in %ery early ti&es. The re&ittan#e of &oney thro"gh '"ndies( an indigeno"s #redit instr"&ent( $as %ery pop"lar. The h"ndies $ere iss"ed by bankers kno$n as Shroffs( Sah"kars( Shah"s or )aha*ans in different parts of the #o"ntry. The &odern type of banking( ho$e%er( $as de%eloped by the +gen#y 'o"ses of ,al#"tta and -o&bay after the establish&ent of ."le by the East India ,o&pany in 1/th and 10th #ent"ries. 1"ring the early part of the 10th ,ent"ry( ht %ol"&e of foreign trade $as relati%ely s&all. ater on as the trade e2panded( the need for banks of the E"ropean type $as felt and the go%ern&ent of the East India ,o&pany took interest in ha%ing its o$n bank. The go%ern&ent of -engal took the initiati%e and the first presiden#y bank( the -ank of ,al#"tta 3-ank of -engal) $as established in 1/45. In 1/45( the -ank of -o&bay and IN 1/43( the -ank of )adras $as also set "p.
2

These three banks also kno$n as 6Presiden#y -ank7. The Presiden#y -anks had their bran#hes in i&portant trading #enters b"t &ostly la#ked in "nifor&ity in their operational poli#ies. In 1/00( the 8o%ern&ent proposed to a&alga&ate these three banks in to one so that it #o"ld also f"n#tion as a ,entral -ank( b"t the Presiden#y -anks did not fa%or the idea. 'o$e%er( the #onditions obtaining d"ring $orld $ar period 31014-101/) e&phasized the need for a "nified banking instit"tion( as a res"lt of $hi#h the I&perial -ank $as set "p in 1021. The I&perial -ank of India a#ted like a ,entral bank and as a banker for other banks. The .-I 3.eser%e -ank of India) $as established in 1039 as the ,entral -ank of the ,o"ntry. In 1040( the -anking .eg"lation a#t $as passed and the .-I $as nationalized and a#:"ired e2tensi%e reg"latory po$ers o%er the #o&&er#ial banks. In 1095( the Indian -anking syste& #o&prised of the .-I( the I&perial -ank of India( ,ooperati%e banks( E2#hange banks and Indian ;oint Sto#k banks.
Banking Service in India 2) Nationalization Stages!

+fter Independen#e( in 1091( the +ll India ."ral ,redit s"r%ey( #o&&ittee of 1ire#tion $ith Shri. +. 1. 8or$ala as ,hair&an re#o&&ended a&alga&ation of the I&perial -ank of India and ten others banks into a ne$ly established bank #alled the State -ank of India 3S-I). The 8o%ern&ent of India a##epted the re#o&&endations of the #o&&ittee and introd"#ed the State -ank of India bill in the ok Sabha on 1<th +pril 1099 and it $as passed by Parlia&ent and got the president=s assent on /th )ay 1099. The +#t #a&e into for#e on 1st ;"ly 1099( and the I&perial -ank of India $as nationalized in 1099 as the State -ank of India. The &ain ob*e#ti%e of establishing S-I by nationalizing the I&perial -ank of India $as 6to e2tend banking fa#ilities on a large s#ale &ore parti#"larly in the r"ral and se&i-"rban areas and to di%erse other p"bli# p"rposes.7 In 1090( the S-I 3S"bsidiary -ank) a#t $as proposed and the follo$ing eight state-asso#iated banks $ere taken o%er by the S-I as its s"bsidiaries.

Name of the Bank State Bank of Hyderabad State Bank of Bikaner State Bank of Jaipur State Bank of Saurashtra State Bank of Patiala State Bank of Mysore State Bank of Indore State Bank of Travancore Subsidiary with effect from 1st ?#tober 1090 1st ;an"ary 10<5 1st ;an"ary 10<5 1st )ay 10<5 1st +pril 10<5 1st )ar#h 10<5 1st ;an"ary 10</ 1st ;an"ary 10<5
>ith effe#t fro& 1st ;an"ary 10<3( the State -ank of -ikaner and State -ank of ;aip"r $ith head offi#e lo#ated at ;aip"r. Th"s( se%en s"bsidiary banks State -ank of India for&ed the S-I 8ro"p. The S-I 8ro"p "nder stat"tory obligations $as re:"ired to open ne$ offi#es in r"ral and se&i-"rban areas and &odern banking $as taken to these "nbanked re&ote areas. ?n 10th ;"ly 10<0( then the Pri&e )inister( )rs. Indira 8andhi anno"n#ed the nationalization of 14 &a*or s#hed"led ,o&&er#ial -anks ea#h ha%ing deposits $orth .s. 95 #rore and abo%e. This $as a t"rning point in the history of #o&&er#ial banking in India. ater the 8o%ern&ent Nationalized si2 &ore #o&&er#ial pri%ate se#tor banks $ith deposit liability of not less than .s. 255 #rores on 19th +pril 10/5( %iz.
1) 2)
+ndhra -ank. ,orporation -ank.

2

3) 4) 9) <) Ne$ -ank if India. ?riental -ank of ,o&&er#e. P"n*ab and Sind -ank. @i*aya -ank.
In 10<0( the ead -ank S#he&e $as introd"#ed to e2tend banking fa#ilities to e%ery #orner of the #o"ntry. ater in 10A9( .egional ."ral -anks $ere set "p to s"pple&ent the a#ti%ities of the #o&&er#ial banks and to espe#ially &eet the #redit needs of the $eaker se#tions of the r"ral so#iety. Nationalization of banks pa%ed $ay for retail banking and as a res"lt there has been an alt ro"nd gro$th in the bran#h net$ork( the deposit &obilization( #redit disposals and of #o"rse e&ploy&ent. The first year after nationalization $itnessed the total gro$th in the agri#"lt"ral loans and the loans &ade to SSI by /AB and 4/B respe#ti%ely. The o%erall gro$th in the deposits and the ad%an#es indi#ates the i&pro%e&ent that has taken pla#e in the banking habits of the people in the r"ral and se&i-"rban areas $here the bran#h net$ork has spread. S"#h #redit e2pansion enabled the banks to a#hie%e the goals of nationalization( it $as ho$e%er( a#hie%ed at the #oast of profitability of the banks.
,onse:"en#es of Nationalization!
2
The :"ality of #redit assets fell be#a"se of liberal #redit e2tension poli#y. Politi#al interferen#e has been as additional &alady. Poor appraisal in%ol%ed d"ring the loan &eals #ond"#ted for #redit disb"rsals. The #redit fa#ilities e2tended to the priority se#tor at #on#essional rates. The high le%el of lo$ yielding S . in%est&ents ad%ersely affe#ted the profitability of the banks. The rapid bran#h e2pansion has been the s:"eeze on profitability of banks e&anating pri&arily d"e to the in#rease in the fi2ed #osts. There $as do$n$ard trend in the :"ality of ser%i#es and effi#ien#y of the banks.
Banking Service in India 3) Post- iberalization Era---Thr"st on C"ality and Profitability!

-y the beginning of 1005( the so#ial banking goals set for the banking ind"stry &ade &ost of the p"bli# se#tor res"lted in the pres"&ption that there $as no need to look at the f"nda&ental finan#ial strength of this bank. ,onse:"ently they re&ained "nder#apitalized. .e%a&ping this str"#t"re of the banking ind"stry $as of e2tre&e i&portan#e( as the health of the finan#ial se#tor in parti#"lar and the e#ono&y $as a $hole $o"ld be refle#ted by its perfor&an#e. The need for restr"#t"ring the banking ind"stry $as felt greater $ith the initiation of the real se#tor refor& pro#ess in 1002. the refor&s ha%e enhan#ed the opport"nities and #hallenges for the real se#tor &aking the& operate in a borderless global &arket pla#e. 'o$e%er( to harness the benefits of globalization( there sho"ld be an effi#ient finan#ial se#tor to s"pport the str"#t"ral refor&s taking pla#e in the real e#ono&y. 'en#e( along $ith the refor&s of the real se#tor( the banking se#tor refor&ation $as also addressed. The ro"te #a"ses for the la#kl"ster perfor&an#e of banks( for&ed the ele&ents of the banking se#tor refor&s. So&e of the fa#tors that led to the dis&al perfor&an#e of banks $ere. .eg"lated interest rate str"#t"re. a#k of fo#"s on profitability. a#k of transparen#y in the bank=s balan#e sheet. a#k of #o&petition.
E2#essi%e reg"lation on organization str"#t"re and &anagerial reso"r#e. E2#essi%e s"pport fro& go%ern&ent.

+gainst this ba#kgro"nd( the finan#ial se#tor refor&s $ere initiated to bring abo"t a paradig& shift in the banking ind"stry( by addressing the fa#tors for its dis&al perfor&an#e. In this #onte2t( the re#o&&endations &ade by a high le%el #o&&ittee on finan#ial se#tor( #haired by ). Narasi&ha&( laid the fo"ndation for the banking se#tor refor&s. These refor&s tried to enhan#e the %iability and effi#ien#y of the banking se#tor. The Narasi&ha& ,o&&ittee s"ggested that there sho"ld be f"n#tional a"tono&y( fle2ibility in operations( dil"tion of banking strang"lations( red"#tion in reser%e re:"ire&ents and ade:"ate finan#ial infrastr"#t"re in ter&s of s"per%ision( a"dit and te#hnology. The #o&&ittee f"rther ad%o#ated introd"#tion of pr"dential for&s( transparen#y in operations and i&pro%e&ent in prod"#ti%ity( only ai&ed at liberalizing the reg"latory fra&e$ork( b"t also to keep the& in ti&e $ith international standards. The e&phasis shifted to effi#ient and pr"dential banking linked to better #"sto&er #are and #"sto&er ser%i#es.
Banking Service in India Pri%ate Se#tor -anks
Pri%ate banking in India $as pra#ti#ed sin#e the begining of banking syste& in India. The first pri%ate bank in India to be set "p in Pri%ate Se#tor -anks in India $as Ind"s Ind -ank. It is one of the fastest gro$ing -ank Pri%ate Se#tor -anks in India. I1-I ranks the tenth largest de%elop&ent bank in the $orld as Pri%ate -anks in India and has pro&oted a $orld #lass instit"tion in India. The first Pri%ate -ank in India to re#ei%e an in prin#iple appro%al fro& the .eser%e -ank of India $as 'o"sing 1e%elop&ent Dinan#e ,orporation i&ited( to set "p a bank in the pri%ate se#tor banks in India as part of the .-IEs liberalization of the Indian -anking Ind"stry. It $as in#orporated in +"g"st 1004 as '1D, -ank i&ited $ith registered offi#e in )"&bai and #o&&en#ed operations as S#hed"led ,o&&er#ial -ank in ;an"ary 1009. IN8 @aysya( yet another Pri%ate -ank of India $as in#orporated in the year 1035. -angalore has a pride of pla#e for ha%ing the first bran#h in#eption in the year 1034. >ith s"##essi%e years of patronage and #onstantly setting ne$ standards in banking( IN8 @aysya -ank has &any #redits to its a##o"nt.
Entry of Pri%ate Se#tor -anks!

There has been a paradig& shift in &indsets both at the
8o%ern&ent le%el in the banking ind"stry o%er the years sin#e Nationalization of -anks in 10<0( parti#"larly d"ring the last de#ade 310052555). 'a%ing a#hie%ed the ob*e#ti%es of Nationalization( the &ost i&portant iss"e before the ind"stry at present is s"r%i%al and gro$th in the en%iron&ent generated by the e#ono&i# liberalization greater #o&petition $ith a %ie$ to a#hie%ing higher prod"#ti%ity and effi#ien#y in ;an"ary 1003 for the entry of Pri%ate Se#tor banks based on the Nationalization ,o&&ittee report of 1001( $hi#h en%isaged a larger role for Pri%ate Se#tor -anks. The .-I pres#ribed a &ini&"& paid "p #apital of .s. 155 #rores for the ne$ bank and the shares are to be listed at sto#k e2#hange. +lso the ne$ bank after being granted li#ense "nder the -anking .eg"lation +#t shall be registered as a p"bli# li&ited #o&pany "nder the #o&panies +#t( 109<.
Private Sector Banks
Old Pvt. Sector Banks (25)
New Pvt. Sector Banks (9)
S"bse:"ently 0 ne$ #o&&er#ial banks ha%e been granted li#ense to start banking operations. The ne$ pri%ate se#tor banks ha%e been %ery aggressi%e in b"siness e2pansion and is also reporting higher profile le%els taking the ad%antage of te#hnology and skilled &anpo$er. In #ertain areas( these banks ha%e e%en o"r #rossed the other gro"p of banks in#l"ding foreign banks.
,"rrent s#enario
,"rrently 32550)( o%erall( banking in India is #onsidered as
fairly &at"re in ter&s of s"pply( prod"#t range and rea#h-e%en tho"gh rea#h in r"ral India still re&ains a #hallenge for the pri%ate se#tor and foreign banks. E%en in ter&s of :"ality of assets and #apital ade:"a#y( Indian banks are #onsidered to ha%e #lean( strong and transparent balan#e sheets-as #o&pared to other banks in #o&parable e#ono&ies in its region. The .eser%e -ank of India is an a"tono&o"s body( $ith &ini&al press"re fro& the go%ern&ent. The stated poli#y of the -ank on the Indian ."pee is to &anage %olatility-$itho"t any stated e2#hange rate-and this has &ostly been tr"e. >ith the gro$th in the Indian e#ono&y e2pe#ted to be strong for :"ite so&e ti&e-espe#ially in its ser%i#es se#tor( the de&and for banking ser%i#esespe#ially retail banking( &ortgages and in%est&ent ser%i#es are e2pe#ted to be strong. )F+s( takeo%ers( asset sales and &"#h &ore a#tion 3as it is "nra%eling in ,hina) $ill happen on this front in India. In )ar#h 255<( the .eser%e -ank of India allo$ed >arb"rg Pin#"s to in#rease its stake in Gotak )ahindra -ank 3a pri%ate se#tor bank) to 15B. This is the first ti&e an in%estor has been allo$ed to hold &ore than 9B in a pri%ate se#tor bank sin#e the .-I anno"n#ed nor&s in 2559 that any stake e2#eeding 9B in the pri%ate se#tor banks $o"ld need to be %etted by the&. ,"rrently( India has // s#hed"led #o&&er#ial banks 3S,-s) - 2/ p"bli# se#tor banks 3that is $ith the 8o%ern&ent of India holding a stake)( 20 pri%ate banks 3these do not ha%e go%ern&ent stakeH they &ay be p"bli#ly listed and traded on sto#k e2#hanges) and 31 foreign banks.

They ha%e a #o&bined net$ork of o%er 93(555 bran#hes and 1A(555 +T)s. +##ording to a report by I,.+ i&ited( a rating agen#y( the p"bli# se#tor banks hold o%er A9 per#ent of total assets of the banking ind"stry( $ith the pri%ate and foreign banks holding 1/.2B and <.9B respe#ti%ely.
II. BANKING IN INDIA

?%er%ie$ of -anking!
-anking .eg"lation +#t of India( 1040 defines -anking as 6a##epting( for the p"rpose of lending or of in%est&ent of deposits of &oney fro& the p"bli#( repayable on de&and or other$ise or $ithdra$able by #he:"e( draft order or other$ise.7 The .eser%e -ank of India +#t( 1034 and the -anking .eg"lation +#t( 1040( go%ern the banking operations in India.
?rganizational Str"#t"re of -anks in India!

In India banks are #lassified in %ario"s #ategories a##ording to
differ rent #riteria. The follo$ing #harts indi#ate the banking str"#t"re.
.eser%e -ank of India .eser%e -ank of India
Commercial Banks Commercial Banks Nationali Nationalied ed Private Private
Co-operative Banks Co-operative Banks S!ort-term S!ort-term credit credit
Development Banks Development Banks
"on#-term "on#-term credit credit *nd%strial *nd%strial $#ric%lt%ral $#ric%lt%ral
$#ric%lt%ral $#ric%lt%ral Credit Credit
&r'an &r'an Credit Credit
()*+ ()*+
Banking Service in India -road ,lassifi#ation of -anks in India!

1) The .-I!
The .-I is the s"pre&e &onetary and banking a"thority in the #o"ntry and has the responsibility to #ontrol the banking syste& in the #o"ntry. It keeps the reser%es of all s#hed"led banks and hen#e is kno$n as the 6.eser%e -ank7.
2) P"bli# Se#tor -anks!

State -ank of India and its +sso#iates 3/) Nationalized -anks 310) .egional ."ral -anks Sponsored by P"bli# Se#tor -anks 310<)
3) Pri%ate Se#tor -anks!

?ld 8eneration Pri%ate -anks 322) Doreign Ne$ 8eneration Pri%ate -anks 3/) -anks in India 345)
4) ,o-operati%e Se#tor -anks!

State ,o-operati%e -anks ,entral ,o-operati%e -anks Pri&ary +gri#"lt"ral ,redit So#ieties and 1e%elop&ent -anks
2

State and 1e%elop&ent -anks
9) 1e%elop&ent -anks! 1e%elop&ent -anks &ostly pro%ide long ter&

finan#e for setting "p ind"stries. They also pro%ide short-ter& finan#e 3for e2port and i&port a#ti%ities) Ind"strial Dinan#e ,o-operation of India 3ID,I) Ind"strial 1e%elop&ent of India 3I1-I) Ind"strial In%est&ent -ank of India 3II-I) S&all Ind"stries 1e%elop&ent -ank of India 3SI1-I) National -ank for +gri#"lt"re and ."ral 1e%elop&ent 3N+-+.1) E2port-I&port -ank of India
.ole of -anks!
-anks play a positi%e role in e#ono&i# de%elop&ent
of a #o"ntry as repositories of #o&&"nity=s sa%ings and as p"r%eyors of #redit. Indian -anking has aided the e#ono&i# de%elop&ent d"ring the last fifty years in an effe#ti%e $ay. The banking se#tor has sho$n a re&arkable responsi%eness to the needs of planned e#ono&y. It has bro"ght abo"t a #onsiderable progress in its efforts at deposit &obilization and has taken a n"&ber of &eas"res in the re#ent past for a##elerating the rate of gro$th of deposits. +s re#o"rse to this( the #o&&er#ial banks opened bran#hes in "rban( se&i-"rban and r"ral areas and ha%e introd"#ed a n"&ber of attra#ti%e s#he&es to foster e#ono&i# de%elop&ent. The a#ti%ities of #o&&er#ial banking ha%e gro$th in &"lti-dire#tional $ays as $ell as &"lti-di&ensional &anner. -anks ha%e been playing a #atalyti# role in area de%elop&ent( ba#k$ard area de%elop&ent( e2tended assistan#e to r"ral de%elop&ent all along helping agri#"lt"re( ind"stry( international trade in a signifi#ant &anner. In a $ay(

#o&&er#ial banks ha%e e&erged as key finan#ial agen#ies for rapid e#ono&i# de%elop&ent. -y pooling the sa%ings together( banks #an &ake a%ailable f"nds to spe#ialized instit"tions $hi#h finan#e different se#tors of the e#ono&y( needing #apital for %ario"s p"rposes( risks and d"rations. -y #ontrib"ting to go%ern&ent se#"rities( bonds and debent"res of ter&-lending instit"tions in the fields of agri#"lt"re( ind"stries and no$ ho"sing( banks are also pro%iding these instit"tions $ith an a##ess to the #o&&on pool of sa%ings &obilized by the&( to that e2tent relie%ing the& of the responsibility of dire#tly approa#hing the sa%er. This inter&ediation role of banks is parti#"larly i&portant in the early stages of e#ono&i# de%elop&ent and finan#ial spe#ifi#ation. + #o"ntry like India( $ith different regions at different stages of de%elop&ent( presents an interesting spe#tr"& of the e%ol%ing role of banks( in the &atter of inter-&ediation and beyond. )obilization of reso"r#es for&s an integral part of the de%elop&ent pro#ess in India. In this pro#ess of &obilization( banks are at a great ad%antage( #hiefly be#a"se of their net$ork of bran#hes in the #o"ntry. +nd banks ha%e to pla#e #onsiderable relian#e on the &obilization of deposits fro& the p"bli# to finan#e de%elop&ent progra&&es. D"rther( deposit &obalization by banks in India a#:"ired greater signifi#an#e in their ne$ role in e#ono&i# de%elop&ent. ,o&&er#ial banks pro%ide short-ter& and &edi"&-ter& finan#ial assistan#e. The short-ter& #redit fa#ilities are granted for $orking #apital re:"ire&ents. The &edi"&-ter& loans are for the a#:"isition of land( #onstr"#tion of fa#tory pre&ises and p"r#hase of &a#hinery and e:"ip&ent. These loans are generally granted for periods ranging fro& fi%e to se%en years. They also establish letters of #redit on behalf of their #lients fa%o"ring
2

s"ppliers of ra$ &aterialsI&a#hinery 3both Indian and foreign) $hi#h e2tend the banker=s ass"ran#e for pay&ent and th"s help their deli%ery. ,ertain transa#tion( parti#"larly those in #ontra#ts of sale of 8o%ern&ent 1epart&ents( &ay re:"ire g"arantees being iss"ed in lie" of se#"rity earnest &oney deposits for release of ad%an#e &oney( s"pply of ra$ &aterials for pro#essing( f"ll pay&ent of bills on the ass"ran#e of the perfor&an#e et#. ,o&&er#ial banks iss"e s"#h g"arantees also.
The .ole of .eser%e -ank of India 3.-I) J -anker=s -ank!

The .eser%e -ank of India 3.-I) is the #entral bank of India( and $as established on +pril 1( 1039 in a##ordan#e $ith the pro%isions of the .eser%e -ank of India +#t( 1034. Sin#e its in#eption( it has been head:"artered in )"&bai. Tho"gh originally pri%ately o$ned( .-I has been f"lly o$ned by the 8o%ern&ent of India sin#e nationalization in 1040. .-I is go%erned by a #entral board 3headed by a 8o%ernor) appointed by the ,entral 8o%ern&ent. 1"%%"ri S"bbarao $ho s"##eeded Kaga @en"gopal .eddy on Septe&ber 2( 255/ is the #"rrent 8o%ernor of .-I. .-I has 22 regional offi#es a#ross India. The .eser%e -ank of India $as set "p on the re#o&&endations of the 'ilton Ko"ng ,o&&ission. The #o&&ission s"b&itted its report in the year 102<( tho"gh the bank $as not set "p for nine years.
)ain ?b*e#ti%e!
)onetary +"thority
Dor&"lates i&ple&ents and &onitors the &onetary poli#y. ?b*e#ti%e! &aintaining pri#e stability and ens"ring ade:"ate flo$ of #redit to prod"#ti%e se#tors.
.eg"lator and s"per%isor of the finan#ial syste&Pres#ribes broad para&eters of banking operations $ithin $hi#h the #o"ntry=s banking and finan#ial syste& f"n#tions.
?b*e#ti%e! &aintain p"bli# #onfiden#e in the syste&( prote#t depositors= interest and pro%ide #ost-effe#ti%e banking ser%i#es to the p"bli#. The -anking ?&b"ds&an S#he&e has been for&"lated by the .eser%e -ank of India 3.-I) for effe#ti%e redressal of #o&plaints by bank #"sto&ers
)anager of E2#hange ,ontrol)anages the Doreign E2#hange )anage&ent +#t( 1000. ?b*e#ti%e! to fa#ilitate e2ternal trade and pay&ent and pro&ote orderly de%elop&ent and &aintenan#e of foreign e2#hange &arket in India.
Iss"er of #"rren#yIss"es and e2#hanges or destroys #"rren#y and #oins not fit for #ir#"lation.
2
?b*e#ti%e! to gi%e the p"bli# ade:"ate :"antity of s"pplies of #"rren#y notes and #oins and in good :"ality.
1e%elop&ental role
Perfor&s a $ide range of pro&otional f"n#tions to s"pport national ob*e#ti%es.
.elated D"n#tions-anker to the 8o%ern&ent! perfor&s &er#hant banking f"n#tion for the #entral and the state go%ern&entsH also a#ts as their banker.

-anker to banks! &aintains banking a##o"nts of all s#hed"led banks. ?$ner and operator of the depository 3S8 ) and e2#hange 3N1S) for go%ern&ent bonds.
There is no$ an international #onsens"s abo"t the need to fo#"s the tasks of a #entral bank "pon #entral banking. .-I is far o"t of to"#h $ith s"#h a prin#iple( o$ing to the spra$ling &andate des#ribed abo%e.
S"per%isory D"n#tions!
In addition to its traditional #entral f"n#tions( the .eser%e bank
has #ertain non-&onetary f"n#tions of the nat"re of s"per%ision of banks and pro&otion of so"nd banking in India. The .eser%e -ank +#t( 1034( and the -anking .eg"lation +#t( 1040 ha%e gi%en the .-I $ide po$ers of s"per%ision and #ontrol o%er #o&&er#ial and #ooperati%e banks( relating to li#ensing and establish&ents( bran#h e2pansion( li:"idity of their assets( &anage&ent and &ethods of $orking( a&alga&ation( re#onstr"#tion and li:"idation. The .-I is a"thorized to #arry o"t periodi#al inspe#tions of the banks and to #all for ret"rns and ne#essary infor&ation fro& the&. The nationalization of 14
2

&a*or Indian s#hed"led banks in ;"ly 10<0 has i&posed ne$ responsibilities on the .-I for dire#ting the gro$th of banking and #redit poli#ies to$ards &ore rapid de%elop&ent of the e#ono&y and realization of #ertain desired so#ial ob*e#ti%es. The s"per%isory f"n#tions of the .-I ha%e helped a great deal in i&pro%ing the standard of banking in India to de%elop on so"nd lines and to i&pro%e the &ethods of their operation.
Pro&otional D"n#tions!
>ith e#ono&i# gro$th ass"&ing a ne$ "rgen#y sin#e
Independen#e( the range of the .eser%e -ank=s f"n#tions ha%e steadily $idened. The -ank no$ perfor&s a %ariety of de%elop&ental and pro&otional f"n#tions( $hi#h( at one ti&e( $ere regarded as o"tside the nor&al s#ope of #entral banking. The .eser%e -ank $as asked to pro&ote banking habit( e2tend banking fa#ilities to r"ral and se&i-"rban areas( and establish and pro&ote ne$ spe#ialized finan#ing agen#ies. +##ordingly( the .eser%e bank has helped in the setting "p of the ID,I and the SD,! it set "p the 1eposit Ins"ran#e ,orporation of India in 10<3 and the Ind"strial .e#onstr"#tion ,orporation of India in 10A2. These instit"tions $ere set "p dire#tly or indire#tly by the .eser%e -ank to pro&ote sa%ing habit and to &obilize sa%ings( and to pro%ide ind"strial finan#e as $ell as agri#"lt"ral finan#e. +s far ba#k as 1039( the .-I set "p the +gri#"lt"ral ,redit 1epart&ent to pro%ide agri#"lt"ral #redit. -"t only sin#e 1091 the -ank=s role in this field has be#o&e e2tre&ely i&portant. The -ank has de%eloped the #o-operati%e #redit &o%e&ent to en#o"rage sa%ing( to eli&inate &oneylenders fro& the %illages and to ro"te its short ter& #redit to agri#"lt"re. The .-I has set "p the +gri#"lt"ral .efinan#e and 1e%elop&ent ,orporation to pro%ide long-ter& finan#e to far&ers.
2
,o-operati%e -anks!
The ,o-operati%e bank has a history of al&ost 155 years. The
,o-operati%e banks are an i&portant #onstit"ent of the Indian Dinan#ial Syste&( *"dging by the role assigned to the&( the e2pe#tations they are s"pposed to f"lfill( their n"&ber( and the n"&ber of offi#es they operate. The #o-operati%e &o%e&ent originated in the >est( b"t the i&portan#e that s"#h banks ha%e ass"&ed in India is rarely paralleled any$here else in the $orld. Their role in r"ral finan#ing #ontin"es to be i&portant e%en today( and their b"siness in the "rban areas also has in#reased pheno&enally in re#ent years &ainly d"e to the sharp in#rease in the n"&ber of #o-operati%e banks. >hile the #o-operati%e banks in r"ral areas &ainly finan#e agri#"lt"ral based a#ti%ities in#l"ding far&ing( #attle( &ilk( hat#hery( personal finan#e et#. along $ith so&e s&all s#ale ind"stries and selfe&ploy&ent dri%en a#ti%ities( the #o-operati%e banks in "rban areas &ainly finan#e %ario"s #ategories of people for self-e&ploy&ent( ind"stries( s&all s#ale "nits( ho&e finan#e( #ons"&er finan#e( personal finan#e( et#. So&e of the #o-operati%e banks are :"ite for$ard looking and ha%e de%eloped s"ffi#ient #ore #o&peten#ies to #hallenge state and pri%ate se#tor banks.
2
+##ording to N+D,L- the total deposits F lendings of ,ooperati%e -anks is &"#h &ore than ?ld Pri%ate Se#tor -anks F also the Ne$ Pri%ate Se#tor -anks. This e2ponential gro$th of ,o-operati%e -anks is attrib"ted &ainly to their &"#h better lo#al rea#h( personal intera#tion $ith #"sto&ers( their ability to #at#h the ner%e of the lo#al #lientele. Tho"gh registered "nder the ,o-operati%e So#ieties +#t of the .espe#ti%e States 3$here for&ed originally) the banking related a#ti%ities of the #o-operati%e banks are also reg"lated by the .eser%e -ank of India. They are go%erned by the -anking .eg"lations +#t 1040 and -anking a$s 3,o-operati%e So#ieties) +#t( 10<9.
There are t$o &ain #ategories of the #o-operati%e banks. Short ter& lending oriented #o-operati%e -anks J $ithin this #ategory
there are three s"b #ategories of banks %iz state #o-operati%e banks(

1istri#t #o-operati%e banks and Pri&ary +gri#"lt"ral #o-operati%e so#ieties.
ong ter& lending oriented #o-operati%e -anks J $ithin the se#ond #ategory there are land de%elop&ent banks at three le%els state le%el( distri#t le%el and %illage le%el.
Deat"res of ,ooperati%e -anks ,o-operati%e -anks are organized and &anaged on the prin#ipal
of #o-operation( self-help( and &"t"al help. They f"n#tion $ith the r"le of 6one &e&ber( one %ote7. D"n#tion on 6no profit( no loss7 basis. ,o-operati%e banks( as a prin#iple( do not p"rs"e the goal of profit &a2i&ization. ,ooperati%e bank perfor&s all the &ain banking f"n#tions of deposit &obilization( s"pply of #redit and pro%ision of re&ittan#e fa#ilities. ,ooperati%e -anks pro%ide li&ited banking prod"#ts and are f"n#tionally spe#ialists in agri#"lt"re related prod"#ts. 'o$e%er( #o-operati%e banks no$ pro%ide ho"sing loans also. L,-s pro%ide $orking #apital loans and ter& loan as $ell. The State ,o-operati%e -anks 3S,-s)( ,entral ,o-operati%e -anks 3,,-s) and Lrban ,o-operati%e -anks 3L,-s) #an nor&ally e2tend ho"sing loans "pto
2

.s 1 lakh to an indi%id"al. The s#hed"led L,-s( ho$e%er( #an lend "pto .s 3 lakh for ho"sing p"rposes. The L,-s #an pro%ide ad%an#es against shares and debent"res also. ,o-operati%e bank do banking b"siness &ainly in the agri#"lt"re and r"ral se#tor. 'o$e%er( L,-s( S,-s( and ,,-s operate in se&i "rban( "rban( and &etropolitan areas also. The "rban and non-agri#"lt"ral b"siness of these banks has gro$n o%er the years. The #o-operati%e banks de&onstrate a shift fro& r"ral to "rban( $hile the #o&&er#ial banks( fro& "rban to r"ral. ,o-operati%e banks are perhaps the first go%ern&ent sponsored( go%ern&ent-s"pported( and go%ern&ent-s"bsidized finan#ial agen#y in India. They get finan#ial and other help fro& the .eser%e -ank of India N+-+.1( #entral go%ern&ent and state go%ern&ents. They #onstit"te the 6&ost fa%o"red7 banking se#tor $ith risk of nationalization. Dor #o&&er#ial banks( the .eser%e -ank of India is lender of last resort( b"t #o-operati%e banks it is the lender of first resort $hi#h pro%ides finan#ial reso"r#es in the for& of #ontrib"tion to the initial #apital 3thro"gh state go%ern&ent)( $orking #apital( refinan#e. ,o-operati%e -anks belong to the &oney &arket as $ell as to the #apital &arket. Pri&ary agri#"lt"ral #redit so#ieties pro%ide short ter& and &edi"& ter& loans. and 1e%elop&ent -anks 3 1-s) pro%ide long-ter& loans. S,-s and ,,-s also pro%ide both short ter& and ter& loans. ,ooperati%e banks are finan#ial inter&ediaries only partially. The so"r#es of their f"nds 3reso"r#es) are 3a) #entral and state go%ern&ent( 3b) the .eser%e -ank of India and N+-+.1( 3#) other #o-operati%e instit"tions( 3d) o$nership f"nds and( 3e) deposits or debent"re iss"es. It is interesting to note that intra-se#toral flo$s of f"nds are &"#h greater in #o-operati%e banking than in #o&&er#ial banking. Inter-bank deposits( borro$ings( and #redit
2

fro& a signifi#ant part of assets and liabilities of #o-operati%e banks. This &eans that intra-se#toral #o&petition is absent and intra-se#toral integration is high for #o-operati%e bank. So&e #o-operati%e banks are s#hed"led banks( $hile others are non-s#hed"led banks. Dor instan#e( S,-s and so&e L,-s are s#hed"led banks b"t other #o-operati%e bank are non-s#hed"led banks. +t present( 2/ S,-s and 11 L,-s $ith 1e&and and Ti&e iabilities o%er .s 95 #rore ea#h in#l"ded in the Se#ond S#hed"le of the .eser%e -ank of India +#t.
,o-operati%e -anks are s"b*e#t to ,.. and li:"idity re:"ire&ents as other s#hed"led and non-s#hed"led banks are. 'o$e%er( their re:"ire&ents are less than #o&&er#ial banks. Sin#e 10<< the lending and deposit rate of #o&&er#ial banks ha%e been dire#tly reg"lated by the .eser%e -ank of India. +ltho"gh the .eser%e -ank of India had po$er to reg"late the rate #o-operati%e bank b"t this ha%e been e2er#ised only after 10A0 in respe#t of non-agri#"lt"ral ad%an#es they $ere free to #harge any rates at their dis#retion. +ltho"gh the &ain ai& of the #o-operati%e bank is to pro%ide #heaper #redit to their &e&bers and not to &a2i&ize profits( they &ay a##ess the &oney &arket to i&pro%e their in#o&e so as to re&ain %iable.
III. PRODUCTS AND SERVICES OFFERED BY BANKS

-road ,lassifi#ation of Prod"#ts in a bank!
The different prod"#ts in a bank #an be broadly #lassified into!
.etail -anking. Trade Dinan#e. Treas"ry ?perations.

.etail -anking and Trade finan#e operations are #ond"#ted at the bran#h le%el $hile the $holesale banking operations( $hi#h #o%er treas"ry operations( are at the hand offi#e or a designated bran#h.
.etail -anking!
1eposits oans( ,ash ,redit and ?%erdraft

Negotiating for oans and ad%an#es .e&ittan#es -ook-Geeping 3&aintaining all a##o"nting re#ords) .e#ei%ing all kinds of bonds %al"able for safe keeping.
Trade Dinan#e!
Iss"ing and #onfir&ing of letter of #redit. 1ra$ing( a##epting( dis#o"nting( b"ying( selling( #olle#ting of bills of e2#hange( pro&issory notes( drafts( bill of lading and other se#"rities.
Treas"ry ?perations!
-"ying and selling of b"llion. Doreign e2#hange +#:"iring( holding( "nder$riting and dealing in shares( debent"res( et#. P"r#hasing and selling of bonds and se#"rities on behalf of #onstit"ents.

The banks #an also a#t as an agent of the 8o%ern&ent or lo#al a"thority. They ins"re( g"arantee( "nder$rite( parti#ipate in &anaging and #arrying o"t iss"e of shares( debent"res( et#. +part fro& the abo%e-&entioned f"n#tions of the bank( the bank pro%ides a $hole lot of other ser%i#es like in%est&ent #o"nseling for indi%id"als( short-ter& f"nds &anage&ent and portfolio &anage&ent for indi%id"als and #o&panies. It "ndertakes the in$ard and o"t$ard re&ittan#es $ith referen#e to foreign e2#hange and #olle#tion of %aried types for the 8o%ern&ent.
,o&&on -anking Prod"#ts +%ailable!
So&e of #o&&on a%ailable banking prod"#ts are e2plained belo$!
,redit ,ard! ,redit ,ard is 6post paid7 or 6pay later7 #ard that
dra$s fro& a #redit line-&oney &ade a%ailable by the #ard iss"er 3bank) and gi%es one a gra#e period to pay. If the a&o"nt is not paid f"ll by the end of the period( one is #harged interest.

+ #redit #ard is nothing b"t a %ery s&all #ard #ontaining a &eans of identifi#ation( s"#h as a signat"re and a s&all photo. It a"thorizes the holder to #hange goods or ser%i#es to his a##o"nt( on $hi#h he is billed. The bank re#ei%es the bills fro& the &er#hants and pays on behalf of the #ard holder. These bills are asse&bled in the bank and the a&o"nt is paid to the bank by the #ard holder totally or by install&ents. The bank #harges the #"sto&er a s&all a&o"nt for these ser%i#es. The #ard holder need not ha%e to #arry &oneyI#ash $ith hi& $hen he tra%els or goes for p"r#hasing. ,redit #ards ha%e fo"nd $ide spread a##eptan#e in the M&etros= and big #ities. ,redit #ards are *oining pop"larity for online pay&ents. The &a*or players in the ,redit ,ard &arket are the foreign banks and so&e big p"bli# se#tor banks like S-I and -ank of -aroda. India at present has abo"t 3 &illion #redit #ards in #ir#"lation.
1ebit ,ards! 1ebit ,ard is a 6prepaid7 or 6pay no$7 #ard $ith so&e
stored %al"e. 1ebit ,ards :"i#kly debit or s"btra#t &oney fro& one=s sa%ings a##o"nt( or if one $ere taking o"t #ash. E%ery ti&e a person "ses the #ard( the &er#hant $ho in t"rn #an get the &oney transferred to his a##o"nt fro& the bank of the b"yers( by debiting an e2a#t a&o"nt of p"r#hase fro& the #ard. To get a debit #ard along $ith a Personal Identifi#ation N"&ber 3PIN).

>hen he &akes a p"r#hase( he enters this n"&ber on the shop=s PIN pad. >hen the #ard is s$iped thro"gh the ele#troni# ter&inal( it dials the a#:"iring bank syste& J either )aster ,ard or @isa that %alidates the PIN and finds o"t fro& the iss"ing bank $hether to a##ept or de#line the transa#tion. The #"sto&er ne%er o%erspread be#a"se the a&o"nt spent is debited i&&ediately fro& the #"sto&ers a##o"nt. So( for the debit #ard to $ork( one &"st already ha%e the &oney in the a##o"nt to #o%er the transa#tion. There is no gra#e period for a debit #ard p"r#hase. So&e debit #ards ha%e &onthly per transa#tion fees. 1ebit ,ard holder need not #arry a b"lky #he#kbook or large s"&s of #ash $hen heIshe goes at for shopping. This is a fast and easy $ay of pay&ent one #an get debit #ard fa#ility as debit #ards "se one=s o$n &oney at the ti&e of sale( so they are often easier than #redit #ards to obtain. The &a*or li&itation of 1ebit ,ard is that #"rrently only so&e 3555-4555 shops #o"ntry $ide a##epts it. +lso( a person #an=t operate it in #ase the telephone lines are do$n.
or
+"to&ati# Teller )a#hine! The introd"#tion of +T)=s has gi%en the
#"sto&ers the fa#ility of ro"nd the #lo#k banking. The +T)=s are "sed by banks for &aking the #"sto&ers dealing easier. +T) #ard is a de%i#e that allo$s #"sto&er $ho has an +T) #ard to perfor& ro"tine banking transa#tion at any ti&e $itho"t intera#ting $ith h"&an teller. It pro%ides e2#hange ser%i#es. This ser%i#e helps the #"sto&er to $ithdra$ &oney e%en $hen the banks ate #losed. This #an be done by inserting the #ard in the +T) and entering the Personal Identifi#ation N"&ber and se#ret Pass$ord.
2

+T)=s are #"rrently be#o&ing pop"lar in India that enables the #"sto&er to $ithdra$ their &oney 24 ho"rs a day and 3<9 days. It pro%ides the #"sto&ers $ith the ability to $ithdra$ or deposit f"nds( #he#k a##o"nt balan#es( transfer f"nds and #he#k state&ent infor&ation. The ad%antages of +T)=s are &any. It in#reases e2isting b"siness and generates ne$ b"siness. It allo$s the #"sto&ers. To transfer &oney to and fro& a##o"nts. To %ie$ a##o"nt infor&ation. To order #ash. To re#ei%e #ash
+d%antages of +T)=s!
To the ,"sto&ers +T)=s pro%ide 24 hrs. A days and 3<9 days a year ser%i#e. Ser%i#e is :"i#k and effi#ient Pri%a#y in transa#tion
2

>ider fle2ibility in pla#e and ti&e of $ithdra$als. The transa#tion is #o&pletely se#"re J yo" need to key in Personal Identifi#ation N"&ber 3Lni:"e n"&ber for e%ery #"sto&er). No$ a days #an be "se any of the bank=s +T)
To The -anks +lternati%e to e2tend banking ho"rs. ,ro$ding at bank #o"nters #onsiderably red"#ed. +lternati%e to ne$ bran#hes and to red"#e operating e2penses. .elie%es bank e&ployees to fo#"s an &ore analyti#al and inno%ati%e $ork. In#reased &arket penetration.
+T)=s #an be installed any$here like +irports( .ail$ay Stations( Petrol P"&ps( -ig -"siness ar#ades( &arkets( et#. 'en#e( it gi%es easy a##ess to the #"sto&ers( for obtaining #ash. The +T) ser%i#es pro%ided first by the foreign banks like ,itibank( 8rind lays bank and no$ by &any pri%ate and p"bli# se#tor banks in India like I,I,I -ank( '1D, -ank( S-I( LTI -ank et#. The I,I,I has la"n#hed +T) Ser%i#es to its #"sto&ers in all the )etropolitan ,ities in India. -y the end of 1005 Indian Pri%ate -anks and p"bli# se#tor banks ha%e #o&e "p $ith their o$n +T) Net$ork in the for& of 6S>+1'+N7. ?%er the past year "pto 44 banks in )"&bai( @ashi and Thane( ha%e be#a&e a part of 6S>+1'+N7 a
2

syste& of shared pay&ents net$orks( introd"#ed by the Indian -ank +sso#iation 3I-+).
E-,hea:"es! The e-#hea:"es #onsists fi%e pri&ary fa#ts. They are
the #ons"&ers( the &er#hant( #ons"&er=s bank the &er#hant=s bank and the e-&int and the #learing pro#ess. This #hea:"ring syste& "ses the net$ork ser%i#es to iss"e and pro#ess pay&ent that e&"lates real $orld #ha:"ing. The payers iss"e a digital #hea:"es to the payee ant the entire transa#tions are done thro"gh internet. Ele#troni# %ersion of #hea:"es are iss"ed( re#ei%ed and pro#essed. + typi#al ele#troni# #he:"e transa#tion takes pla#e in the follo$ing &anner! The #"sto&er a##esses the &er#hant ser%er and the &er#hant ser%er presents its goods to the #"sto&er. The #ons"&er sele#ts the goods and p"r#hases the& by sending an e#he:"e to the &er#hant. The &er#hant %alidates the e-#he:"e $ith its bank for pay&ent a"thorisation. The &er#hant ele#troni#ally for$ards the e-#he:"e to its bank. The &er#hant=s bank for$ards the e-#he:"e to the #learing ho"se for #ashing. The #learing ho"se *ointly $orks $ith the #ons"&er=s bank #lears the #he:"e and transfers the &oney to the &er#hant=s banks. The &er#hant=s bank "pdates the &er#hant=s a##o"nt.

The #ons"&er=s bank "pdates the #ons"&er=s a##o"nt $ith the $ithdra$al infor&ation. The e-#he:"ing is a great boon to big #orporate as $ell as s&all retailers. )ost &a*or banks a##ept e-#he:"es. Th"s this syste& offers se#"re &eans of #olle#ting pay&ents( transferring %al"e and &anaging #ash flo$s.
Ele#troni# D"nds Transfer 3EDT)! )any &odern banks ha%e
#o&p"terised their #he:"e handling pro#ess $ith #o&p"ter net$orks and other ele#troni# e:"ip&ents. These banks are dispensing $ith the "se of paper #he:"es. The syste& #alled ele#troni# f"nd transfer 3EDT) a"to&ati#ally transfers &oney fro& one a##o"nt to another. This syste& fa#ilitates speedier transfer of f"nds ele#troni#ally fro& any bran#h to any other bran#h. In this syste& the sender and the re#ei%er of f"nds &ay be lo#ated in different #ities and &ay e%en bank $ith different banks. D"nds transfer $ithin the sa&e #ity is also per&itted. The s#he&e has been in operation sin#e Debr"ary A( 100<( in India. The other i&portant type of fa#ility in the EDT syste& is a"to&ated #learing ho"ses. These are the #o&p"ter #enters that handle the bills &eant for deposits and the bills &eant for pay&ent. In big #o&panies pay is not disb"rsed by iss"ed #he:"es or iss"ing #ash. The pay&ent offi#e dire#ts the #o&p"ter to #redit an e&ployee=s a##o"nt $ith the person=s pay.
Telebanking! Telebanking refers to
banking on phone ser%i#es. + #"sto&er #an a##ess infor&ation abo"t hisIher a##o"nt thro"gh a telephone #all and by gi%ing the #oded Personal Identifi#ation N"&ber 3PIN) to the bank. Telebanking is e2tensi%ely "ser friendly and effe#ti%e in nat"re. To get a parti#"lar $ork done thro"gh the bank( the "sers &ay lea%e his instr"#tions in the for& of &essage $ith bank. Da#ility to stop pay&ent on re:"est. ?ne #an easily kno$ abo"t the #he:"e stat"s. Infor&ation on the #"rrent interest rates. Infor&ation $ith regard to foreign e2#hange rates. .e:"est for a 11 or pay order. 1-)at +##o"nt related ser%i#es.
+nd other si&ilar ser%i#es. 2
)obile -anking! + ne$ re%ol"tion in the real& of e-banking is
the e&ergen#e of &obile banking. ?n-line banking is no$ &o%ing to the &obile $orld( gi%ing e%erybody $ith a &obile phone a##ess to real-ti&e banking ser%i#es( regardless of their lo#ation. -"t there is &"#h &ore to &obile banking fro& *"st on-lie banking. It pro%ides a ne$ $ay to pi#k "p infor&ation and intera#t $ith the banks to #arry o"t the rele%ant banking b"siness. The potential of &obile banking is li&itless and is e2pe#ted to be a big s"##ess. -ooking and paying for tra%el and e%en ti#kets is also e2pe#ted to be a gro$th area. +##ording to this syste&( #"sto&er #an a##ess a##o"nt details on &obile "sing the Short )essaging Syste& 3S)S) te#hnology< $here sele#t data is p"shed to the &obile de%i#e. The $ireless appli#ation proto#ol 3>+P) te#hnology( $hi#h $ill allo$ "ser to s"rf the net on their &obiles to a##ess anything and e%erything. This is a %ery fle2ible $ay of transa#ting banking b"siness. +lready I,I,I and '1D, banks ha%e tied "p #ell"lar ser%i#e pro%ides s"#h as +irtel( ?range( Sky ,ell( et#. in 1elhi and )"&bai to offer these &obile banking ser%i#es to their #"sto&ers.
Internet -anking! Internet banking in%ol%es "se of internet for
deli%ery of banking prod"#ts and ser%i#es. >ith internet banking is no$ no longer #onfir&ed to the bran#hes $here one has to approa#h the bran#h in person( to $ithdra$ #ash or deposits a #he:"e or re:"est a state&ent of

a##o"nts. In internet banking( any in:"iry or transa#tion is pro#essed online $itho"t any referen#e to the bran#h 3any$here banking) at any ti&e. The Internet banking no$ is &ore of a nor&al rather than an e2#eption d"e to the fa#t that it is the #heapest $ay of pro%iding banking ser%i#es. +s indi#ated by )#Ginsey C"arterly resear#h( presently traditional banking #osts the banks( &ore than a dollar per person( +T) banking #osts 2A #ents and internet banking #osts belo$ 4 #ents appro2i&ately. I,I,I bank $as the first one to offer Internet -anking in India.
-enefits of Internet -anking!

.ed"#e the transa#tion #osts of offering se%eral banking ser%i#es and
di&inishes the need for longer n"&bers of e2pensi%e bri#k and &ortar bran#hes and staff. In#rease #on%enien#e for #"sto&ers( sin#e they #an #ond"#t &any
banking transa#tion 24 ho"rs a day. In#rease #"sto&er loyalty. I&pro%e #"sto&er a##ess. +ttra#t ne$ #"sto&ers. Easy online appli#ation for all a##o"nts( in#l"ding personal loans and
&ortgages.
Dinan#ial Transa#tion on the Internet!
Ele#troni# ,ash! ,o&panies are de%eloping ele#troni# repli#as of all
e2isting pay&ent syste&! #ash( #he:"e( #redit #ards and #oins.
+"to&ati# Pay&ents! Ltility #o&panies( loans pay&ents( and other
b"sinesses "se on a"to&ati# pay&ent syste& $ith bills paid thro"gh dire#t $ithdra$al fro& a bank a##o"nt.
1ire#t 1eposits! Earnings 3or 8o%ern&ent pay&ents) a"to&ati#ally
deposited into bank a##o"nts( sa%ing ti&e( effort and &oney.
Stored @al"e ,ards! Prepaid #ards for telephone ser%i#e( transit
fares( high$ay tolls( la"ndry ser%i#e( library fees and s#hool l"n#hes.
Point of Sale transa#tions! +##eptan#e of +T)I,he:"e at retail
stores and resta"rants for pay&ent of goods and ser%i#es. This syste& has &ade f"n#tioning of the sto#k )arket %ery s&ooth and effi#ient.
,yber -anking! It refers to banking thro"gh online ser%i#es. -anks
$ith $eb site 6,yber7 bran#hes allo$ed #"sto&ers to #he#k balan#es( pay bills( transfer f"nds( and apply for loans on the Internet.
1e&at! 1e&at is short for de-&aterialisation of shares. In short(
1e&at is a pro#ess $here at the #"sto&er=s re:"est the physi#al sto#k is #on%erted into ele#troni# entries in the depository syste&. In ;an"ary 100/ SE-I 3Se#"rities and E2#hange -oard of India) initiated 1E)+T +,,?LNT+N,K Syste& to reg"late and to i&pro%e sto#k in%esting. +s on date( to trade on shares it has be#o&e #o&p"lsory to ha%e a share de&at a##o"nt and all trades take pla#e thro"gh de&at.
'o$ to ?perate 1E)+T +,,?LNTN

2

?ne needs to open a 1e&at +##o"nt $ith any of the bran#hes of the bank. +fter opening an a##o"nt $ith any bank( by filling the de&at re:"est for& one #an hando%er the se#"rities. The rest $ill be taken #are by the bank and the #"sto&er $ill re#ei%e #redit of shares as soon as it is #onfir&ed by the ,o&panyI.egister and Transfer +gent. There is no physi#al &o%e&ent of share #ertifi#ation any &ore. +ny b"ying or selling of shares is done %ia ele#troni# transfers. I. If the in%estor $ants to sell his shares( he has to pla#e an order $ith his broker and gi%e a 61eli%ery Instr"#tion7 to his 1P 31epository Parti#ipant). The 1P $ill debit hi s a##o"nt $ith the n"&ber of shares sold by hi&. II. If one $ants to b"y shares( he has to infor& his broker abo"t his 1epository +##o"nt N"&ber so that the shares bo"ght by hi& are #redited in to his a##o"nt. III. Pay&ent for the ele#troni# shares bo"ght or sold is to be &ade in the sa&e $ay as in the #ase of physi#al se#"rities.
IV. BANKING SERVICES.

-anking #o%ers so &any ser%i#es that it is diffi#"lt to define it. 'o$e%er( these basi# ser%i#es ha%e al$ays been re#ognized as the hall&ark of the gen"ine banker. These areO The re#eipt of the #"sto&er=s deposits
2

The #olle#tion of his #he:"es dra$n on other banks The pay&ent of the #"sto&er=s #he:"es dra$n on hi&self
1. 2. 3. 4. 9. <. A. /.
There are other %ario"s types of banking ser%i#es like!

+d%an#es J ?%erdraft( ,ash ,redit( et#. 1eposits J Sa%ing +##o"nt( ,"rrent +##o"nt( et#. Dinan#ial Ser%i#es J -ill dis#o"nting et#. Doreign Ser%i#es J Pro%iding foreign #"rren#y( tra%elers #he:"es( et#. )oney Trans&ission J D"nds transfer et#. Sa%ings J Di2ed deposits( et#. Ser%i#es of pla#e or ti&e J +T) Ser%i#es. Stat"s J 1ebit ,ards( ,redit ,ards( et#.
,"sto&er Ser%i#es in ,o&&er#ial -anks!

,"sto&er ser%i#e is the ser%i#e pro%ided in s"pport of a bank=s
#ore prod"#ts. ,"sto&er ser%i#e often in#l"des ans$ering :"estionsH handling #o&plaints. ,"sto&er ser%i#e #an o##"r on site 3as $hen an onstage e&ployee
2

helps a #"sto&er or ans$ers a :"estion) or it #an o##"r o%er the phone or the Internet. C"ality #"sto&er ser%i#e is essential to b"ilding #ordial #"sto&er relationship. -anking being a ser%i#e ind"stry( a lot depends on effi#ient and pro&pt #"sto&er ser%i#e. ,"sto&er ser%i#e is the &ost i&portant d"ty of the banking operations. Pro&pt and effi#ient ser%i#e $ith s&ile $ill de%elop good p"bli# relations red"#e #o&plaints and in#rease b"siness.
>hy is ,"sto&er Ser%i#e I&portantN

,hanging #"sto&er e2pe#tations! Today the #"sto&er is &ore
de&anding and &ore sophisti#ated than he or she $as thirty years ago.
The in#reased i&portan#e of #"sto&er ser%i#e! >ith #hanging
#"sto&er e2pe#tations( #o&petitors are seeing #"sto&er ser%i#e as a #o&petiti%e $eapon $ith $hi#h they differentiate their prod"#ts and ser%i#es.
The need for a relationship strategy! To ens"re that a #"sto&er
ser%i#e strategy that $ill #reate a %al"e preposition for #"sto&ers sho"ld be for&"lated i&ple&ented and #ontrolled. It is ne#essary to gi%e it a #entral role and not one that is s"bs"&ed in the %ario"s ele&ents of the &arketing &i2. The #"sto&er is the kingpi& in gro$th organizations like #o&&er#ial banks. ?nly those instit"tions $hi#h $ork a##ording to his di#tates $ill flo"rish. C"ality( ,onsisten#y and 1"rability at lo$ pri#e are the final e2pe#tations of a #"sto&er. C"ality $ill ha%e to be "na&big"o"s( of $orld #lass :"ality. C"ality #annot be of &ini&"& a##eptable standards.

,"sto&er responsi%eness &"st be :"i#k and also #o&petent. Speed( perfor&an#e and #ost $ill be the ne$ %al"es 6&antra7 for s"##ess. The ten key areas of #"sto&er=s ser%i#es to be attended ti&ely and reg"larly are! 1. S"b&ission of state&ent of +I,s to #"sto&ers 2. Lpdating of sa%ings pass books. 3. Teller syste& effi#ien#y. 4. ,leanliness and Lpkeep of pre&ises. 9. Inter&ediate ,redit for instit"tion #he:"esIland bills. <. +d%an#e inti&ation to #"sto&ers for re$ards of Ter& 1eposits .e#eipts on &at"rity. A. +d%an#e for 1ebitI#redit to a##o"nts. /. P"n#t"ality of staff. 0. 'andling of #o&plaint register. 15. )aintain a #o&plaint register. ,"sto&er=s dissatisfa#tion in the banking ind"stry is neither re#ent nor "nkno$n. This is &ainly d"e to delays in handling transa#tions a#ross the #o"nter in #olle#tions( "pdate of passbooks s"pply of state&ents of a##o"nts( et#. Dail"re to pro%ide pro&pt and effi#ient #"sto&er ser%i#e is likely to lead to red"#tion in the n"&ber of #"sto&ers and they &ay ha%e to fa#e
2

#los"re. To e%ent s"#h sit"ation the follo$ing i&pro%e&ents in the #"sto&er ser%i#es &ay be #arried o"t!
1. Personal relations of the bank e&ployee $ith #"sto&ers $ill i&pro%e #"sto&er satisfa#tion. 1 ser%i#e $ith s&ile sho"ld be the &otto of e%ery bank e&ployee. 2. .apid #"sto&er ser%i#es sho"ld be pro%ided thro"gh a"to&ation of $ork and si&plifi#ation of pro#ed"res. 3. +T)=s &ay be introd"#ed in all the bran#hes of the banks( based "pon the %ol"&e of transa#tions. This shall fa#ilitate non-stop banking. 4. ,redit ,ards Ser%i#es( 1ebit ,ard Ser%i#es( $hi#h sho"ld be pro%ided to the #"sto&ers( &"st a link ser%i#e $ith all the banks and bran#hes if possible to fa#ilitate the #"sto&er and the b"siness organizations. 9. E-&ail ser%i#e &ade freely a%ailable at all banking #enters. <. Doreign E2#hange transa#tions are to be e2tended to all the bran#hes to fa#ilitate trade and ind"stries. A. +ll the #"sto&ers are not ho&ogeno"s in their needs. 'en#e need based s#he&es &ay be introd"#ed. /. Totally dereg"lated interest rate str"#t"re sho"ld be there. 0. The banking staff &"st be trained to "nderstand the #"sto&er=s psy#hology( so they &ay pro%ide #"sto&er ser%i#e in a :"alified &anner.
2

15. Ed"#ating the #"sto&ers $ill in#reases better "tilization of banking ser%i#es.
V.BANK MARKETING:
The banking b"siness is essentially other people=s &oney and banker=s brain. The se#ret of its s"##ess lies in satisfying #"sto&er needs for $hi#h the banks ha%e to redis#o%er the &arketing #&o#ept. It is right to &ention that bank &arketing is a &anagerial pro#ess by $hi#h ser%i#es are &at#hed $ith &arkets. The &at#hing of ser%i#es $ith &arket is &eant for&"lation of o%erall &arketing strategies $hi#h s"it the taste( te&pera&ent( needs and re:"ite&ents of #"sto&ers. In %ie$ of the abo%e( &arketing of banking ser%i#es is #on#erned $ith prod"#t( pro&otion( pri#ing( and pla#e. In addition( it is also #on#erned $ith people( pro#ess and physi#al appearan#e.
vi.Objectives ! B"#$ M"%$eti#&:

1) Profitability 2) Pro%iding high ret"rn on in%est&ent 3) +#hie%ing #ertain &arket shareIgro$th 4) 1e%elop&ent of an i&age 9) 1e%eloping ne$ prod"#ts to &eet e&erging #"sto&er re:"ire&ents. <) In#rease in deposits and loans A) 1ire#ting #"sto&ers to #ertain prod"#ts /) In#reasing a$areness 0) In#reasing #"sto&er base thro"gh greater #"sto&er satisfa#tion.
II! "#$% #& IN&#"M'TI#N T%(HN#$#)* +IT, IN TH% B'N-IN) S%(T#"!

-anking en%iron&ent has be#o&e highly #o&petiti%e today. To be able to s"r%i%e and gro$ in the #hanging &arket en%iron&ent banks are going for the latest te#hnologies( $hi#h is being per#ei%ed as an Menabling reso"r#e= that #an help in de%eloping learner and &ore fle2ible str"#t"re that #an respond :"i#kly to the dyna&i#s of a fast #hanging &arket s#enario. It is also %ie$ed as an instr"&ent of #ost red"#tion and effe#ti%e #o&&"ni#ation ethi# people and instit"tions asso#iated $ith the banking b"siness. The Soft$are Pa#kages for -anking +ppli#ations in India had their beginnings in the &iddle of /5s( $hen the -anks started #o&p"terising the bran#hes in a li&ited &anner. The early 05s sa$ the pl"&&eting hard$are pri#es and ad%ent of #heap and ine2pensi%e b"t high po$ered P,=s and Ser%i#es and banks $ent in for $hat $as #alled Total -ran#h +"to&ation 3T-+) pa#kages. The &iddle and late 05s $itnessed the tornado of finan#ial refor&s(
2

dereg"lation globalisation et#. #o"pled eith rapid re%ol"tion in #o&&"ni#ation te#hnologies and e%ol"tion of no%el #on#ept of #on%ergen#e of #o&&"ni#ation te#hnologies( like internet( &obileI#ell phones et#. Te#hnology has #ontin"o"sly played on i&portant role in the $orking of banking instit"tions and the ser%i#es pro%ided by the&. Safekeeping of p"bli# &oney( transfer of &oney( iss"ing drafts( e2ploring in%est&ent opport"nities and lending drafts( e2ploring in%est&ent being pro%ided.
Infor&ation Te#hnology enables sophisti#ated prod"#t de%elop&ent( better &arket infrastr"#t"re( i&ple&entation of reliable te#hni:"es for #ontrol of risks and helps the finan#ial inter&ediaries to rea#h geographi#ally distant and di%ersified &arkets. Internet has signifi#antly infl"en#ed deli%ery #hannels of the banks. Internet has e&erged as an i&portant &edi"& for deli%ery of banking prod"#ts and ser%i#es. The #"sto&ers #an %ie$ the a##o"ntsH get a##o"nt state&ents( transfer f"nds and p"r#hase drafts by *"st p"n#hing on fe$ keys. The s&art #ard=s i.e.( #ards $ith &i#ro pro#essor #hip ha%e added ne$ di&ension to the s#enario. +n introd"#tion of M,yber ,ash= the e2#hange of #ash takes pla#e entirely thro"gh M,yber-books=. ,olle#tion of Ele#tri#ity bills and telephone bills has be#o&e easy. The "pgradeability and fle2ibility of internet te#hnology after "npre#edented opport"nities for the banks to rea#h o"t to its #"sto&ers. No do"bt banking ser%i#es ha%e "ndergone drasti# #hanges and so also the e2pe#tation of #"sto&ers fro& the banks has in#reased greater. IT is in#reasingly &o%ing fro& a ba#k offi#e f"n#tion to a pri&e assistant in in#reasing the %al"e of a bank o%er ti&e. IT does so by &a2i&izing banks of pro-a#ti%e &eas"res s"#h as strengthening and
2

standardising banks infrastr"#t"re in respe#t of se#"rity( #o&&"ni#ation and net$orking( a#hie%ing inter bran#h #onne#ti%ity( &o%ing to$ards .eal Ti&e gross settle&ent 3.T8S) en%iron&ent the fore#asting of li:"idity by b"ilding real ti&e databases( "se of )agneti# Ink ,hara#ter .e#ognition and I&aging te#hnology for #he:"e #learing to na&e a fe$. Indian banks are going for the retail banking in a big $ay.
The key dri%er to #harge has largely been the in#reasing sophisti#ation in te#hnology and the gro$ing pop"larity of the Internet. The shift fro& traditional banking to e-banking is #hanging #"sto&er=s e2pe#tations.
E--anking!
E-banking &ade its deb"t in LG and LS+ 1025s. It be#o&es
pro&inently pop"lar d"ring 10<5( thro"gh ele#troni# f"nds transfer and #redit #ards. The #on#ept of $eb-based baking #a&e into e2isten#e in Ethiopia and LS+ in the beginning of 10/5. In India e-banking is of re#ent origin. The traditional &odel for gro$th has been thro"gh bran#h banking. ?nly in the early 1005s has there been a start in the non-bran#h banking ser%i#es. The ne$ pri%ate se#tor banks and the foreign banks are handi#apped by the la#k of a strong bran#h net$ork in #o&parison $ith the p"bli# se#tor banks. In the absen#e of s"#h net$orks( the &arket pla#e has been the e&ergen#e of a lot of inno%ati%e ser%i#es by these players thro"gh dire#t distrib"tion strategies of non-bran#h deli%ery. +ll these banks are "sing ho&e banking as a key 6p"ll= fa#tor to re&o%e #"sto&ers a$ay fro& the $ell entered p"bli# se#tor banks.
2

)any banks ha%e &odernized their ser%i#es $ith the fa#ilities of #o&p"ter and ele#troni# e:"ip&ents. The ele#troni#s re%ol"tion has &ade it possible to pro%ide ease and fle2ibility in banking operations to the benefit of the #"sto&er. The e-banking has &ade the #"sto&er say good-bye to h"ge a##o"nt registers and large paper bank a##o"nts. The e-banks( $hi#h &ay #all as easy bank offers the follo$ing ser%i#es to its #"sto&ers!
,redit ,ards J 1ebit ,ards +T) E-,he:"es EDT 3Ele#troni# D"nds Transfer) 1-)+T +##o"nts )obile -anking Telephone -anking Internet -anking E1I 3Ele#troni# 1ata Inter#hange)
-enefits of E-banking!
To the ,"sto&er!2

+ny$here -anking no &atter $here%er the #"sto&er is in
the $orld. -alan#e en:"iry( re:"est for ser%i#es( iss"ing instr"#tions et#.( fro& any$here in the $orld is possible. +nyti&e -anking J )anaging f"nds in real ti&e and &ost
i&portantly( 24 ho"rs a day( Adays a $eek. all the ti&e. -rings do$n 6,ost of -anking7 to the #"sto&er o%er a ,on%enien#e a#ts as a tre&endo"s psy#hologi#al benefit
period a period of ti&e. pay&ent for ,ash $ithdra$al fro& any bran#h I +T) ?n-line p"r#hase of goods and ser%i#es in#l"ding online the sa&e.
To the -ank!
Inno%ati%e( s#he&e( addresses #o&petition
and present the bank as te#hnology dri%en in the banking se#tor &arket thereby h"&an inter%ention
2
.ed"#es #"sto&er %isits to the bran#h and

Inter-bran#h re#on#iliation is i&&ediate
thereby red"#ing #han#es of fra"d and &isappropriation ?n-line banking is an effe#ti%e &edi"& of
pro&otion of %ario"s s#he&es of the bank( a &arketing tool indeed. Integrated #"sto&er data pa%es $ay for
indi%id"alized and #"sto&ized ser%i#es
I&pa#t of IT on the Ser%i#e C"ality!The &ost %isible i&pa#t of te#hnology is refle#ted in the $ay the banks respond strategi#ally
2

for &aking its effe#ti%e "se for effi#ient ser%i#e deli%ery. This i&pa#t on ser%i#e :"ality #an be s"&&ed "p as belo$! >ith a"to&ation( ser%i#e no longer re&ains a &arketing edge $ith the
large banks only. S&all and relati%ely ne$ banks $ith li&ited net$ork of bran#hes be#o&e better pla#ed to #o&pete $ith the established banks( by integrating IT in their operations. The te#hnology has #o&&oditising so&e of the finan#ial ser%i#es. Therefore the banks #annot take a lifeti&e relationship $ith the #"sto&ers as granted and they ha%e to $ork #ontin"o"sly to foster this relationship and retain #"sto&er loyalty. The te#hnology on one hand ser%es as a po$erf"l tool for #"sto&er
ser%i#ing( on the other hand( it itself res"lts in depersonalising of the banking ser%i#es. This has an ad%erse effe#t on relationship banking. + de#ade of #o&p"terization #an probably ne%er s"bstit"te a si&ple or a $ar& handshake.
In order to red"#e ser%i#e deli%ery #ost( banks need to a"to&ate
ro"tine #"sto&er in:"iries thro"gh self-ser%i#e #hannels. To do this they need to in%est in #all #enters( kiosks( +T)=s and Internet -anking today re:"ire IT infrastr"#t"re integrated $ith their b"siness strategy to be #"sto&er #entri#.
I&pa#t of IT
on -anking Syste&!
2

The banking syste& is slo$ly shifting fro& the Traditional banking to$ards relationship banking. Traditionally the relationship bet$een the bank and its #"sto&ers has been on a one-to-one le%el %ia the bran#h net$ork. This $as p"t into operation $ith #learing and de#ision &aking responsibilities #on#entrated at the indi%id"al bran#h le%el. The head offi#e had responsibility for the o%erall #learing net$ork( the size of the bran#h net$ork and the training of staff in the bran#h net$ork. The bank &onitored the organisation=s perfor&an#e and set the de#ision &aking para&eters( b"t the infor&ation a%ailable to both bran#h staff and their #"sto&ers $as li&ited to one geographi#al lo#ation.
Traditional -anking
Se#tor-
C&S,O+(-
C&S,O+(-
C&S,O+(-
B$N. B-$NC/
B$N. B-$NC/
B$N. B-$NC/
C"($-*N0 D(C*S*ON
C"($-*N0 D(C*S*ON
C"($-*N0 D(C*S*ON
,ENT.+ , E+.IN8
'E+1 ?DDI,E
The &odern bank #annot rely on its bran#h net$ork alone. ,"sto&ers are no$ de&anding ne$( &ore #on%enient( deli%ery syste&s( and ser%i#es s"#h as Internet banking ha%e a d"al role to the #"sto&er. They pro%ide traditional banking ser%i#es( b"t additionally offer &"#h greater a##ess to infor&ation on their a##o"nt stat"s and on the bank=s &any other ser%i#es. To do this banks ha%e to #reate a##o"nt infor&ation layers( $hi#h #an be a##essed both by the bank staff as $ell as by th #"sto&ers the&sel%es. The "se of intera#ti%e ele#troni# links %ia the Internet #o"ld go a ling $ay in pro%iding the #"sto&ers $ith greater le%el of infor&ation abo"t both their o$n finan#ial sit"ation and abo"t the ser%i#es offered by the bank.
The Ne$ .elationship ?riented -ank2
C&S,O+(-
,("(P/ON(1 B-$NC/1 ("(C,-ON*C B$N.*N01 etc
S/$-(D *N2O-+$,*ON
C"($-*N0 S3S,(+
/($D O22*C( -*S. +ON*,O*-*N0
I&pa#t of IT on Pri%a#y and ,onfidentiality of 1ata!

2

1ata being stored in the #o&p"ters( is no$ being displayed $hen re:"ired on thro"gh internet banking &obile banking( +T)=s et#. all this has gi%en raise to the iss"es of pri%a#y and #onfidentially of data are! The data pro#essing #apabilities of the #o&p"ter( parti#"larly the rapid thro"ghp"t( integration( and retrie%al #apabilities( gi%e rise to do"bts in the &inds of indi%id"als as to $hether the pri%a#y of the indi%id"als is being eroded. So long as the indi%id"al data ite&s are a%ailable only to those dire#tly #on#erned( e%erything see&s to be in proper pla#e( b"t the in#iden#e of data being #ross referen#ed to #reate detailed indi%id"al dossiers gi%es rise to pri%a#y proble&s. ,"sto&ers feel threatened abo"t the inade:"a#y of pri%a#y being &aintained by the banks $ith regard to their transa#tions and link at #o&p"terised syste&s $ith s"spi#ion. + side fro& any #onstit"tional aspe#t( &any nations dee& pri%a#y to be a s"b*e#t of h"&an right and #onsider it to be the responsibility of those $ho #on#erned $ith #o&p"ter data pro#essing for ens"ring that the #o&p"ter "se does not re%ol%e to the stage $here different data abo"t people #an be #olle#ted( integrated and retrie%ed :"i#kly. +nother i&portant responsibility is to ens"re the data is "sed only for the p"rpose intended
Viii. RECENT TRENDS IN BANKING:

Today( $e are ha%ing a fairly $ell de%eloped banking syste& $ith different #lasses of banks J p"bli# se#tor banks( foreign banks( pri%ate se#tor banks J both old and ne$ generation( regional r"ral banks and #ooperati%e banks $ith the .eser%e -ank of India as the fo"ntain 'ead of the syste&. In the banking field( there has been an "npre#edented gro$th and di%ersifi#ation of banking ind"stry has been so st"pendo"s that it has no parallel in the annals of banking any$here in the $orld. 1"ring the last 45 years sin#e 10<0( tre&endo"s #hanges ha%e taken pla#e in the banking ind"stry. The banks ha%e shed their traditional f"n#tions and ha%e been inno%ating( i&pro%ing and #o&ing o"t $ith ne$ types of the ser%i#es to #ater to the e&erging needs of their #"sto&ers. )assi%e bran#h e2pansion in the r"ral and "nderde%eloped areas( &obilisation of sa%ings and di%ersifi#ation of #redit fa#ilities to the either to negle#ted areas like s&all s#ale ind"strial se#tor( agri#"lt"ral and other preferred areas like e2port se#tor et#. ha%e res"lted in the $idening and deepening of the finan#ial infrastr"#t"re and transferred the f"nda&ental #hara#ter of #lass banking into &ass banking.

There has been #onsiderable inno%ation and di%ersifi#ation in the b"siness of &a*or #o&&er#ial banks. So&e of the& ha%e engaged in the areas of #ons"&er #redit( #redit #ards( &er#hant banking( leasing( &"t"al f"nds et#. + fe$ banks ha%e already set "p s"bsidiaries for &er#hant banking( leasing and &"t"al f"nds and &any &ore are in the pro#ess of doing so. So&e banks ha%e #o&&en#ed fa#toring b"siness. The &a*or #hallenges fa#ed by banks today are as to ho$ to #ope $ith #o&petiti%e for#es and strengthen their balan#e sheet. Today( banks are groaning $ith b"rden of NP+=s. It is rightly felt that these #onta&inated debts( if not re#o%ered( $ill eat into the %ery %itals of the banks. +nother &a*or an2iety before the banking ind"stry is the high transa#tion #ost of #arrying Non Perfor&ing +ssets in their books. The resol"tion of the NP+ proble& re:"ires greater a##o"ntability on the part of the #orporate( greater dis#los"re in the #ase of defa"lts( an effi#ient #redit infor&ation sharing syste& and an appropriate legal fra&e$ork pertaining to the banking syste& so that #o"rt pro#ed"res #an be strea&lined and a#t"al re#o%eries &ade $ithin an a##eptable ti&e fra&e. The banking ind"stry #annot afford to s"stain itself $ith s"#h high le%els of NP+=s th"s( 6lend( b"t lent for a p"rpose and $ith a p"rpose o"ght to be the slogan for sal%ation.7 The Indian banks are s"b*e#t to tre&endo"s press"res to perfor& as other$ise their %ery s"r%i%al $o"ld be at stake. IT plays an i&portant role in the banking se#tor as it $o"ld not only ens"re s&ooth passage of interrelated transa#tions o%er the ele#tri# &edi"& b"t $ill also fa#ilitate #o&ple2 finan#ial prod"#t inno%ation and prod"#t de%elop&ent. The appli#ation of IT and e-banking is be#o&ing the order of the day $ith the banking syste& heading to$ards %irt"al banking.

+s an e2tre&e #ase of e-banking >orld >ide -anking 3>>-) on the pattern of >orld >ide >eb 3>>>) #an be %is"alised. That &eans all banks $o"ld be interlinked and indi%id"al bank identity( as far as the #"sto&er is #on#erned( does not e2ist. There is no need to ha%e large n"&ber of physi#al bank bran#hes( e2tension #o"nters. There is no need of person-toperson physi#al intera#tion or dealings. ,"sto&ers $o"ld be able to do all their banking operations sitting in their offi#es or ho&es and operating thro"gh internet. This $o"ld be the #ase of banking rea#hing the #"sto&ers. -anking lands#ape is #hanging %ery fast. )any ne$ players $ith different &"s#le po$ers $ill enter the &arket. The .eser%e -ank in its bid to &o%e to$ards the best international banking pra#ti#es $ill f"rther sharpen the pr"dential nor&s and strengthen its s"per%isor &e#hanis&. There $ill be &ore transparen#y and dis#los"res. In the days to #o&e( banks are e2pe#ted to play a %ery "sef"l role in the e#ono&i# de%elop&ent and the e&erging &arket $ill pro%ide a&ple b"siness opport"nities to harness. '"&an .eso"r#es )anage&ent is ass"&ing to be of greater i&portan#e. +s banking in India $ill be#o&e &ore and &ore kno$ledge s"pported( h"&an #apital $ill e&erge as the finest assets of the banking syste&. Llti&ately banking is people and not *"st fig"res.
I.! ST"'INS 'N/ (H'$$N)%S

iberalisation pro#ess has in#reasingly e2posed Indian Ind"stry to international #o&petition and banking being a ser%i#e ind"stry is also not an e2#eption. -anking Se#tor in India too fa#es sa&e strains and #hallenges at lo#al( national and international le%el. Indian -anks( f"n#tionally di%erse and geographi#ally $idespread( ha%e played a #r"#ial role in the so#io-e#ono&i# progress of the #o"ntry after independen#e. 'o$e%er( the gro$th led to strains in the operational effi#ien#y of banks and the a##"&"lation of non-perfor&ing assets 3NP+=s) in their loan portfolios. -anks fa#e in#reasing press"re to stand o"t fro& the #ro$d. ?n the Internet( this &eans offering yo"r target #"sto&ers an in#reasingly broader range of ser%i#es than yo"r #o&petitors and that too in "ni:"e $ay. +ll this has res"lted in a #hallenge to &anagers of banks to de%elop the right &i2 of a#:"ired and internally gro$n IT appli#ations $hi#h s"its #"sto&er=s e2pe#tations. -anking se#tor refor&s and liberalisation pro#ess raised &any #hallenges before Indian -anks and for s"stainable de%elop&ent it has be#o&e ne#essary to fa#e these #hallenges effe#ti%ely!
Intense ,o&petition! The .-I and

2
8o%ern&ent of India kept banking ind"stry

open for the parti#ipants of pri%ate se#tor banks and foreign banks. The foreign banks $ere also per&itted to set "p shop on India either as bran#hes or as s"bsidiaries. 1"e to this lo$ered entry barriers &any ne$ players ha%e entered the &arket s"#h as pri%ate banks( foreign banks( non-banking finan#e #o&panies( et#. The foreign banks and ne$ pri%ate se#tor banks ha%e spearheaded the hi-te#h re%ol"tion. 'ea%y $eight foreign banks $ith h"ge base( latest te#hnology inno%ati%e and globally tested prod"#ts are spreading their $ings and $ooing a$ay #"sto&ers for& other banks. Dor s"r%i%al and gro$th in highly #o&petiti%e en%iron&ent banks ha%e to follo$ the ne$ 68"r" )antra7 of pro&pt and effi#ient #"sto&er ser%i#e( $hi#h #alls for appropriate #"sto&er #entri# poli#ies and #"sto&er friendly pro#ed"res.
Te#hnologi#al Lp gradation! +lready ele#troni# transfers(
#learings( settle&ents ha%e red"#ed translation ti&es. To fa#e #o&petition it is ne#essary for banks to absorb the te#hnology and "pgrade their ser%i#es. 'o$e%er "se of 'igh-Te#h sophisti#ated te#hnology lea%es the predo&inantly r"ral( poor and e%en illiterate &ans in the l"r#h to $hi#h the le%el of a"to&ation and effi#ien#y of ser%i#es are i&&aterial.
Pri%a#y and Safety! +&ong the &ost i&portant aspe#ts( of sa%ings(
i.e.( safety li:"idity and profitability( safety has to be a##orded top &ost priority. The safety aspe#t ass"&es &ore signifi#an#e in the e&erging s#enario as the e#ono&i# loss #a"sed internationally by these types of #ri&es &ight risk area and any la#"nae is safety $o"ld res"lt in erosion of #onfiden#e and the sa&e &ight possibly paralyse the entire net$ork. The areas a&ong other things( $hi#h &ight endanger se#"rity in e-banking( #an be!
2

,hanges in inp"t data s"#h as #hanging the a&o"nt in ledges(
in#reasing the li&its in a##o"nts or fa#e %al"e of #hea:"es. Tho"gh these trends #o"ld be dete#ted #onse:"ently( pre%ention is a &a*or proble& $ith these types of #ri&es. Lse of stolen or falsified #ards in +T) &a#hines. ,o&p"ter forgery #o"ld be #o&&itted by $ay of gaining a##ess to
other a##o"nt( deliberate da&age thro"gh %ir"ses on data stored in #o&p"ters. In this #ase( sa&e #ri&inals &ight gain entry into the #o&p"ters and #a"se da&age to the syste&. This apart( another thro"gh $hi#h se#"rity and pri%a#y are &aintained. If a ha#ker has fo"nd o"t the pass$ord( he #an #a"se ha%o# to the entire net$ork. +lso( if the pass$ord is stolen &oney #o"ld be transferred fro& one a##o"nt to another.
Soft$are pri%a#y is another area of potential danger fa#ed by the
banking ind"stry. In this the entire soft$are #o"ld be stolen. If this is done( the ha#kers #o"ld operate a parallel net$ork.
'"&an .eso"r#es )anage&ent! In the re#ent past
the h"&an reso"r#e Poli#ies in banks $ere &ainly g"ided by the #on#ept of per&anent e&ploy&ent and its ne#essary #on#o&itants of #reating #areer paths( ter&inal benefits( et#. for the e&ployees. In today=s fast-#hanging $orld of e&ployee &obility both horizontally and %erti#ally and %al"e syste&s( the p"bli# se#tor banks need to hire the right talent at &arket related #o&pensation and to shed s"rpl"s &anpo$erIstaff. Th"s &any banks are going for L.S s#he&es to red"#e the b"rden of e2#essi%e staff. S#he&es like @.S are going to #hange the nat"re of $orkfor#e $ith &any senior and e2perien#ed persons opting for it.

The key ele&ents that shall pro%ide a #o&petiti%e edge to banking se#tor $ill not be physi#al assets b"t kno$ledge assets and infor&ation. Therefore( banks &"st "nderstand ho$ to retain kno$ledge based e&ployees and pre%ent the& to &igrating to so&e other organisation. -anks &"st belie%e in people( #"sto&er orientation( and #ontin"o"s i&pro%e&ent of e2#ellen#e. Therefore it be#o&es ne#essary for banks to en#o"rage all e&ployees to take risks and $ork to$ards #ontin"o"s i&pro%e&ents and breakthro"ghs. S"##essf"l banks o%er#o&ing the #hallenges $ill be those that harness te#hnology in a #"sto&er friendly yet #ost effe#ti%e $ay. This re:"ires enor&o"s internal and e2ternal &anage&ent and the #r"2 of the sol"tion lies in blending h"&an reso"r#es $ith infor&ation te#hnology.
'. CASE STUDY

2
Banking Service in India ,?-?PE.+TI@E -+NG +N1 ITS SE.@I,ES! S+.+S>+T ,?-?PE.+TI@E -+NG I)ITE1The -ank has a %ery h"&ble b"t a %ery inspiring beginning. ?n 14th Septe&ber 101/1 PThe Saras$at ,o-operati%e -anking So#ietyP $as fo"nded. )r. ;.G. Par"lkar be#a&e its first ,hair&an( )r. N.-. Thak"r( the first @i#e-,hair&an( )r. P.N. >arde( the first Se#retary and )r. Shi%ra& 8opal .a*adhyaksha( the first Treas"rer. These $ere the people $ith deep and abiding ideals( faith( %ision( opti&is& and entreprene"rial skills. These dedi#ated &en in #harge of the So#iety had a #o&&endable sense of ser%i#e and d"ty i&bibed in the&. E%en today( o"r hono"rable fo"nders inspire a sense of a$e and respe#t in the -ank and a&ongst the shareholders. The So#iety $as initially set "p to help fa&ilies in distress. Its ob*e#ti%e $as to pro%ide te&porary a##o&&odation to its &e&bers in e%ent"alities s"#h as $eddings of dependent &e&bers of the fa&ily( repay&ent of debt and e2penses of &edi#al treat&ent et#. The So#iety $as #on%erted into a f"ll-fledged Lrban ,o-operati%e -ank in the year 1033. The -ank has the "ni:"e distin#tion of being a $itness to 'istory. The -ank( $hi#h $as originally fo"nded in 101/( i.e. #lose on the heels of the ."ssian .e%ol"tion( also $itnessed as a So#iety and as -ank-the Dirst >orld >ar( the Se#ond >orld >ar( IndiaEs freedo& )o%e&ent and the glorio"s #hapter of post-independen#e India. 1"ring this #ata#lys&i# #a%al#ade of history( the -ank as a finan#ial instit"tion and its &e&bers #o"ld not of #o"rse re&ain "naffe#ted by the e#ono&i# #onse:"en#es of the
2

&a*or e%ents. The t$o $ars in parti#"lar bro"ght in their $ake( pa"#ities of all kinds and realities and stand by its &e&bers in distress as a solid b"l$ark of strength. The Do"nder )e&bers and the later-day &anage&entEs of the -ank #ontin"ed to de&onstrate their "n$a%ering faith in the destiny of the #o&&on &an and the #o-operati%e &o%e&ent and they en#o"raged the shareholder to sa%e despite all odds.
)ISSI?N ST+TE)ENT
PTo e&erge as one of the pre&ier and &ost preferred banks in the #o"ntry by adopting highest standards of professionalis& and e2#ellen#e in all the areas of $orking.7
)I EST?NES
Thanks to these s"stained and assid"o"s efforts o%er 29 years after its in#eption( the -ank had gained Strong fo"ndation in ter&s of its &e&bership( reso"r#es( assets and profits. -y 1042( the -ank $as f"lfilling all the banking needs of its #"sto&ers. 1"ring the late fifties( the -ank gre$ fro& strength to strength. The -ank had established fi%e bran#hes $ithin the #ity of )"&bai and one ea#h at P"ne and -elga"&. In its 95th year( the -ank #hose a bee &otif to sy&bolise the -ankEs e&ble& - a fitting and appropriate #hara#teristi#s of a -ank that belie%ed in hard $ork( a sear#h for all that is good( a tea& spirit to a#hie%e its ob*e#ti%es and a selfless ser%i#e to its &e&bers and #"sto&ers. The -ank has gro$n in stat"re( progressed in its so#ial and e#ono&i# ob*e#ti%es and prod"#ed an i&age of $hat an ideal bank sho"ld be. .es"ltantly( in the year 10AA-A/( the -ankEs gross in#o&e #rossed the .s.3.55 #rore &ark for the first ti&e.

ast t$o de#ades the bank has $itnessed a steady gro$th in the b"siness. The bank has a net$ork of /< f"lly #o&p"terised bran#hes #o%ering fi%e states %iz. )aharashtra( 8"*arat( )adhya Pradesh( Garnataka and 8oa. The -ank is pro%iding 24- ho"r ser%i#e thro"gh +T) at 41 lo#ations. In 10// the bank $as #onferred $ith PS#hed"ledP stat"s by .eser%e -ank of India.The bank is the first #o-operati%e bank to pro%ide )er#hant -anking ser%i#es. The bank got a per&anent li#ense to deal in foreign e2#hange in 10A/. Presently the -ank is ha%ing #orrespondent relationship in 49 #o"ntries #o%ering 0 #"rren#ies $ith o%er 129 banks
SE.@I,ES P.?@I1E1
Saras$at ,o-operati%e -ank being the No.1 #o-operati%e bank
in +sia( o"r efforts are al$ays dire#ted to$ards de%eloping and offering #o&petiti%e and inno%ati%e prod"#ts and ser%i#es. In the $holesale banking b"siness( the Saras$at ,o-operati%e -ank td. pro%ides a $ide range of prod"#ts fro& a traditional ter& loans to short ter& prod"#ts like -ills dis#o"nting "nder etter of ,redit et#. The -ank also offers a bo":"et of .etail oan Prod"#ts s"#h as @ast" Siddhi 'o&e oan( Saras$ati Ed"#ation oan( ,ar oan et#. and $ide array of 1eposit s#he&es $ith #"sto&er friendly feat"res and attra#ti%e .ate of Interest. >ith a %ie$ of f"lfilling all the needs of the #"sto&ers "nder one roof -ank has entered into tie-"ps $ith %ario"s pre&i"& instit"tions( thro"gh $hi#h $e are offering third party prod"#ts like ife and non- ife Ins"ran#e( )"t"al D"nds and 1e&at Ser%i#es.
Banking Service in India Dollo$ing are the Ser%i#es Pro%ided by the Saras$at
-ank!PE.S?N+
1. 1eposits S#he&e 2. Personal oans 1.
1eposits S#he&e!Saras$at -ank provides in4ormation o4 its vario%s deposit sc!emes
c%stomers can avail o4 wit! t!e 'ank.
,L-S 1eposit ,"rrent 1eposit Elite Sa%ings ;anhit +##o"nt 3No frills a##o"nt)
Sa%ings 1eposit
,o-operati%e So#ieties Sa%ings for Gids 3,L-S)
Deat"res!
Ko" sho"ld be a &inorIst"dent 3"pto the age of 21 years) to be#o&e E,L-SE a##o"nt holder. Initial deposit of ,"bs a##o"nt is .s 95I- and s"bse:"ent deposits in &"ltiples of .s 15I- no periodi# #o&p"lsion for s"bse:"ent 1eposit. Starting $ith a s&all a&o"nt of .s. 95I-( a ,L- +##o"nt holder has to sa%e .s. 955 I- o%er a period of one year. Da#ility to deposit #ash in s#hool pre&ises on predeter&ined days. +fter #o&pletion of 14 years of age &inorIst"dent #an operate the a##o"nt ,he:"e book fa#ility not a%ailable. No #harges for non-&aintenan#e of &ini&"& balan#e for first year.
-enefits
PDree 8iftP for all a##o"nt holders. Earn Interest Q 3.9 p.a. e%ery :"arter possess spe#ially designed passbook.
)ini&"& -alan#e!
+##o"nt opening - .s. 95I- $ith f"rther deposit of .s. 15I- .s. 955I- after one year of opening a##o"nt.
,"rrent 1eposits Deat"res!
)ini&"& +%erage -alan#e. Eligibility - Indi%id"al( -"siness&en( ?rganizations. )ini&"& -alan#e of .s 9555I- . Dree +T) #ards. Non-)aintenan#e of &ini&"& a%erage :"arterly balan#e re:"ire to pay ser%i#e #harges of .s. 255I- per &onth. If a##o"nt is #losed $ithin < &onths .s. 35I- pl"s .s. 2I- per "n"sed #hea:"es.
Elite Sa%ings Eligibility! Indi%id"als( )inor by g"ardian( ?rganisations( ,o-
operati%e So#ieties.
)ini&"& -alan#e! .s. 9555I- 3+%erage C"arterly -alan#e) .ate of Interest! 3.95B p.a. Penalty for Non-&aintenan#e of &ini&"& balan#e
)ini&"& :"arterly a%erage balan#e!

2

-elo$ .s. 4555I- to .s. 4000I- - .s. 95 per :"arter. -elo$ .s. 4555I- - .s. 155 per :"arter.
Spe#ial feat"res I fa#ilities5
Dree Personal +##ident Ins"ran#e ,o%er of .s. 2.55 akhs for one year. Dree Ltility -ills Pay&ent fa#ility. Dree Iss"e of 1e&and 1raft I Pay ?rder 3one o##asion per &onth $itho"t #eiling on &a2i&"& a&o"nt) Dree +T) ,ard
;anhit +##o"nt 3No Drills +##o"nt) Eligibility!

1) Persons $hose balan#es do not e2#eed .s 95(555I- in all the a##o"nts taken together. 2) Total #redits to the ;anhit a##o"nt sho"ld not e2#eed .s 1 lakh in a year.
2

3) ?n#e a #"sto&er opens a ;anhit +##o"nt $ith the -ank( heIshe $ill ha%e to #lose all other transa#tion a##o"nts $ith any other bank $ithin a period of <5 days fro& the date of opening the ;anhit +##o"nt $ith o"r bank. 4) The initial deposit a&o"nt re:"ired to open a##o"nt $o"ld be .s.295I
)ini&"& -alan#e!
)ini&"& -alan#e re:"ired to be &aintained $o"ld be .s.155I-.
Sa%ings 1eposits!)ini&"& +%erage -alan#e-
.s. 1555 I- $ith or $itho"t ,he:"e -ook F Dree +T) #ard.
Interest -
3.9B p.a. $ith :"arterly rest.
Penalty I Ser%i#e ,harges!-
Non-)aintenan#e of &ini&"& a%erage :"arterly balan#e of .s 1555Ire:"ire to pay .s 95I- per &onth If a##o"nt is #losed $ithin < &onths

>itho"t #he:"e book - .s. 15 I>ith #he:"e book - .s. 19 I- pl"s .s. 2 per "n"sed #he:"e
,o-operati%e So#ietiesEligibility-
,o-operati%e so#ieties
)ini&"& +&o"nt-
)ini&"& :"arterly a%erage balan#e of .s. 19555I- in Sa%ingI,"rrent +##o"nt )ini&"& .s. 3.55 lakhs in Ter& 1eposit
.ate of Interest-
5.9B e2tra interest as #o&pared to 8eneral P"bli# for Ter& 1eposit. Dor Sa%ing +##o"nt 3.9B Dor ,"rrent +##o"nt J Nil
Spe#ial Deat"resIDa#ilities2

Dree +ffinity ,ard Dree ,he:"e ,olle#tion Ser%i#e. Dree deli%ery of State&ent of +##o"nt 3on#e in a &onth) Dree Ltility -ill Pay&ent 3Easy Pay S#he&e) Dree transfer of D"nds fro& the a##o"nt of &e&ber of the So#iety to
So#iety=s a##o"nt for &onthly &aintenan#e Dree iss"e of 1.1.IP.?. "pto .s. 29555I- ea#h.
Personal oans-
Saras$at ,o-operati%e -ank offers %ario"s loans to its #"sto&ers( one #an opt for any of the belo$ listed loans for their assort&ent of needs.
)edi#al oanP"rpose
Ter& oan for a#:"iring N"#le"s ,o#hlear I&plant
-anking .elation
Pre%io"s banking relations are not #o&p"lsory. +ppli#ant sho"ld be residing in the #ity $here the bran#h is lo#ated.
2
Eligibility
'earing i&paired indi%id"al ?. their Parents.
i&it of oan
.s. 15.55 akhs 155B of the #ost of e:"ip&ent and hospitalisation and allied #harges A5B of the )arket %al"e based on %al"ation by appro%ed %al"e of the #o&&er#ial or residential property
E)I
Di2ed )onthly Install&ents! 3 Dor .s 1.55 akh )
Kear +&o"nt
1 //30
2 4<<1
3 32A4
4 29/9
9 21A9
.epay&ent Period
)a2i&"& 9 Kears6
Se#"rity
E:"itable &ortgage of residential I #o&&er#ial pre&ises Pledge of tangible se#"rities %iz. NS,s( G@Ps. I, poli#ies( D1.s( 8old or any other appro%ed se#"rities 2 8"arantors of $ell pla#ed &eans.
2
Property oanP"rpose
+#:"iring another asset( for any other p"rpose( b"t end "se sho"ld be ens"red.
i&it of oan
)ini&"& - .s.2 lakhs )a2i&"& - .s. 95 akhs
-asis of +d%an#e
29 ti&es of net salary in #ase of salaried person ?r 3 ti&es of net #ash a##r"als.3Net of ta2 and dra$ing pl"s depre#iation)
?r
<5B of agree&ent #ost 3If the property is less than 3 years old.).In
other #ases( <5B of %al"e as per %al"ation report. >hi#he%er is lo$er

2
Eligibility
Indi%id"al $ho are salaried e&ployees ha%ing &ini&"& net salary of
.s.15555I- p.&. 3The in#o&e of the spo"se &ay be added) Professional( Self-E&ployed and others $ho are in#o&e ta2 assessee
ha%ing net ann"al ta2able in#o&e of .s.195555I- for at least 3 years #ontin"o"sly. Dir&I,o&pany( $hose net ann"al ta2able in#o&e is .s.195555I- p.a.
and fir&I#o&pany( is in operation for last 3 years and &aking #ash profit for last 3 years( at the abo%e le%el.
.ate of Interest
Ter& loan - 12.95B on 1aily .ed"#ing -alan#e ,ash #redit - 13B on 1aily .ed"#ing -alan#e
.epay&ent Period
Ter& oan - )a2i&"& 9 years ,ash ,redit - $ith red"#ing li&it 3in <5 &onthly install&ents) s"b*e#t to rene$al e%ery year.
Se#"rity
E:"itable )ortgage of .esidential( #o&&er#ial or ind"strial property.
8"arantor!
Need not be obtained ho$e%er in #ase of fir&s( #o&panies( g"arantee of partners( dire#tors to be obtained.
'o&e oan
P"rpose of oans
P"r#hase of flat I b"ngalo$
i&its of oans
)a2i&"& .s.29.55 lakhs.
-asis of +d%an#eI Eligibility.
09B of #ost of land F #onstr"#tion or #ost of flat R registration #harges R sta&p d"ty. 155B of #ost on #ase to #ase basis $ith 15B #ollateral se#"rity in the for& of appro%ed li:"id se#"rities like Ter& 1eposit( 8o%t. Se#"rities( NS,( G@P( I, et#. ?ption I3.eg"lar .epay&ent) - <5 ti&es of net &onthly salary 3a%g. for the last three &onths)?r 3 ti&es of Net ,ash a##r"als 3a%erage for the last 2-3 years net profit after adding ba#k of depre#iation) of appli#ant( spo"se and #lose blood relati%e ?ption II 3-"llet .epay&ent) F ?ption III 3Progressi%e .epay&ent)- <9 ti&es of net salary 3a%g. for the last three &onths) or 3 ti&es of net #ash a##r"als 3a%erage for the last 2-3 years net profit after adding ba#k of

depre#iation) of the appli#ant( spo"se( and dependent blood relati%e( if appli#ant opts for -"llet pay&ent &ode.
.epay&ent Period
)a2i&"& 19 years
.ate of Interest
Dle2i Di2ed! 11.55B p.a. - @arying e%ery 3 years Dloating! 11.95B p.a. Di2ed! 12.95B p.a.
,?.P?.+TE
7,"sto&er is not an inter%entionH he is the %ery reason for o"r
e2isten#e.7
2

The -ank realises this. >e pro%ide a $ide array of #o&&er#ial and ele#troni# -anking prod"#ts to #orporateI &id #orporateIS)E. 1espite rapid gro$th in #redit portfolio( -anks asset :"ality has sho$n #onstant i&pro%e&ent. Ko"r -ank has a $ide e2pos"re to %ario"s ind"stries. >e are pro%iding %ario"s fa#ilities fro& f"nded to none f"nded fro& short ter& to long ter& ens"ring that yo" get finan#e as per yo"r needs. )id ,orporate Prod"#ts S&all F )edi"& Enterprises 3S)Es)
1)
)id ,orporate Prod"#ts.
-ank pro%ides %ariety of #redit fa#ilities to its ,orporate ,lients as "nder!
>orking ,apital
The -ank $ith a tea& of te#hni#ally :"alified #o&petent #"sto&er dri%en relationship &anagers possessing $ide ind"stry e2perien#e in %ario"s seg&ents( the -ank has taken lot of efforts to "nderstand #"sto&ers F e&pathizing $ith their needs. They #an offer yo" $orking #apital finan#e by $ay of #ash #redit or loans s"itably str"#t"red to yo"r need and risk profile in #onsorti"& or as a lead banker. ?"r $orking #apital sol"tions are based on finan#ial( :"antitati%e F :"alitati%e e%al"ation of yo"r b"siness thro"gh o"r te#hni#ally :"alified e2perts.
Ter& oan

The -ank pro%ides ter& finan#eIter& loans for b"siness e2pansion( "p
gradation of e2isting fa#ilities et# to ease the press"res on &argins of the #o&pany .The -ank is pro%iding str"#t"red ter& loans to &eet yo"r short ter& as $ell as long ter& f"nding re:"ire&ents. >e offer spe#ifi# sol"tion so as to &at#h repay&ent $ith yo"r #ash flo$s to repay the debt thereby enhan#ing yo"r profitability.
2)
S&all F )edi"& Enterprises 3S)Es)
Dor a b"siness on the gro$th phase $ith a $ide range of opport"nities to e2plore( ti&ely a%ailability of #redit is essential to s#ale ne$ heights. +t Saras$at -ank $e see o"rsel%es as partners to ,lients b"siness enabling yo" to fo#"s on yo"r b"siness needs.
>orking ,apital
The -ank $ith a tea& of te#hni#ally :"alified #o&petent #"sto&er dri%en relationship &anagers possessing $ide ind"stry e2perien#e in %ario"s seg&ents. The -ank has taken lot of efforts to "nderstand #"sto&ers F e&pathizing $ith their needs. The #an offer yo" $orking #apital finan#e by $ay of #ash #redit or loans s"itably str"#t"red to yo"r need and risk profile in #onsorti"& or as a lead banker. Their $orking #apital sol"tions are based on finan#ial( :"antitati%e F :"alitati%e e%al"ation of yo"r b"siness thro"gh o"r te#hni#ally :"alified e2perts.
I&port Dinan#e
2

-ank is pro%iding i&port finan#e to its %al"able #"sto&ers by pro%iding letter of #redit fa#ility for its #"sto&ers to p"r#hase their ra$ &aterials. These are generally pro%ided for 05 to 1/5 days.
SE.@I,ES
Saraswat Co-operative Bank pro%ides infor&ation of %ario"s
@al"e added ser%i#es that the -ank pro%ides for itEs estee&ed ,"sto&ers "nder this se#tion.
E+SK P+K
'ere is one &ore e2#iting fa#ility the -ank has offered to relie%e
yo"( its estee&ed #lient( fro& their %al"able ti&e standing in a :"e"e for ro"tine "tility bill pay&ents. +ll they ha%e to do is to $alk into any of the bran#h and register the&sel%es "nder! 6Easy Pay7 s#he&e for all their re#"rring "tility bill pay&ents s"#h as Telephone( Ele#tri#ity -ills( ,ell"lar Phone -ills( Ins"ran#e Pre&i"& F &any &ore. ?n#e the #"sto&ers are registered all their f"t"re bills $ill be paid a"to&ati#ally thro"gh their bank a##o"nt $ith bank. +ny ,"sto&er #an do$nload the for& and s"b&it it to nearby bran#h.
+T) SE.@I,ES
Please do not $aste the %al"able PTi&eP for P)oneyP( as the PTi&eP itself is P)oneyP.
2

The Saraswat Co-operative Bank iss"e +T) #ard to all their #lients $ho open a##o"nt $ith the -ank. -eing + Saras$at -ank +T) #ardholder( the a##o"nt holder en*oy the pri%ilege and #on%enien#e of $ithdra$ing #ash at their #on%enien#e at ti&e d"ring day and night on all 3<9 days in a year. They #an dra$ #ash fro& +T)s of Saras$at -ank as $ell as o%er 24<1 +T)s of 25 &e&bers -anks in P-+N,SP net$ork. Dor dra$ing #ash fro& the +T)s of ,onsorti"& banks( no #harges are le%ied. To a%ail +T) ,ard( a##o"nt holder #an do$nload the for& and s"b&it it to nearby bran#h.
INSL.+N,E
It is the -ank=s earnest endea%or to offer s"ite of ne$ and
#o&petiti%e finan#ial prod"#ts and ser%i#es. The -ank has for this p"rpose
2

tied "p $ith %ario"s ins"ran#e #o&panies. The details of tie-"p and prod"#ts offered are gi%en belo$!
IDE INL.+N,E.
Dor ife Ins"ran#e prod"#ts( $e ha%e entered into a tie-"p $ith )Is. '1D, Standard ife Ins"ran#e ,o&pany i&ited. >e offer follo$ing prod"#ts!
Endo$&ent Plan!
This being a pop"lar sa%ings plan is "sef"l for &eeting all longI short-ter& finan#ial needs and also #o%ers the risk of the appli#antEs life. Ta2 benefit "nder Se# /5 , is also a%ailable.
,hildren=s 1o"ble benefit plan5
It is the &ost pop"lar plan $hi#h helps yo" sa%e and se#"re yo"r #hildEs f"t"re to &eet e2penses for ed"#ation( &arriage et#. It is also kno$n as do"ble benefit plan as on death of life ins"red the benefi#iary 3#hild) gets the s"& ass"red on death of appli#ant as $ell as on &at"rity of the poli#y. Ta2 benefit "nder Se# /5 , is also a%ailable.
Ter& +ss"ran#e plan!
It is p"rely life risk #o%er plan. ?n death of the life ins"red the no&inee gets the poli#y a&o"nt. Ta2 benefit "nder Se# /5 , is a%ailable.
.eg"lar Personal Pension Plan!
It is plan( $hi#h pro%ides ann"ity at the retire&ent age. This plan is a $ith profit pension plan s"itable for e%eryone to help pro%ide reg"lar finan#ial
2

se#"rity to the fa&ily. Plan takes #are of retire&ent age( ret"rn on in%est&ent( inflation et#. Ta2 benefit "nder Se# /5 , a%ailable.
N?N- IDE INL.+N,E!
Dor Non- ife Ins"ran#e $e ha%e a tie-"p $ith )Is. -a*a* +llian#e 8eneral Ins"ran#e ,o td. Lnder the arrange&ent $e offer follo$ing ins"ran#e prod"#ts!
'ealth g"ard!
This plan pro%ides for rei&b"rse&ent of 'ospitalisation e2penses in#"rred for illnessI diseases or in*"ry s"stained. The key feat"res are lo$est pre&i"&( takes #are of pre and post hospitalisation e2penses( a&b"lan#e #harges( fa&ily dis#o"nt( #ashless fa#ility $ith net$ork of <55 hospitals a#ross India. Ta2 benefit "nder Se# /5 1 is a%ailable.
Tra%el ,o&panion!
It is an ?%erseas Tra%el Ins"ran#e that #o%ers rei&b"rse&ent of &edi#al e2penses at abroad( along $ith loss of passportI baggage d"ring o%erseas tra%el.

Personal +##ident Ins"ran#e! It #o%ers risk of death on a##ident. @ehi#le Ins"ran#e! It ins"res yo"r %ehi#le in#ase of da&age or loss to
the %ehi#le.
'I.CONC(USION
The banking s#enario has #hanged drasti#ally. The #hanges $hi#h ha%e taken pla#e in the last ten years are &ore than the #hanges took pla#e in last fifty years be#a"se of the instit"tionalisation( liberalisation( globalisation and a"to&ation in the banking ind"stry.
Indian banking syste& has se%eral o"tstanding a#hie%e&ents to its #redit( the &ost striking of $hi#h is its rea#h. Indian banks are no$ spread o"t into the re&ote #orners of o"r #o"ntry. In ter&s of the n"&ber of bran#hes( India=s banking syste& is one of the largest in the $orld. +##ording to the -anker 2554( India has 25 banks $ithin the $orld=s top 1555 o"t of $hi#h only < are $ithin the top 955 banks.
Today banking se#tor is &arked by high #"sto&er e2pe#tations and te#hnologi#al inno%ations. Te#hnology is playing a #r"#ial role in the day to day f"n#tioning of the banks. These banks that ha%e harnessed and le%eraged te#hnology best ha%e a strategi# ad%antage. To fa#e #o&petition it is ne#essary for banks to absorb the te#hnology and "pgrade their ser%i#es.

In today=s #onte2t banks are follo$ing the strategy of 6relationship banking7 than 6&ass banking7 $hi#h is need of the ho"r. The #"sto&er ser%i#es are playing a %ery signifi#ant role in banking b"siness. In India &a*or e%ents leading to dereg"lation( liberalisation and pri%atisation ha%e "nleashed for#es of #o&petition( &aking the banks r"n for their b"siness( not only to #reate the #"sto&er( b"t &ore diffi#"lt to r"n for their b"siness( not only to #reate the #"sto&er( b"t &ore diffi#"lt to retain the #"sto&er. Pro&pt and effi#ient #"sto&er ser%i#e( th"s( has be#o&e %ery signifi#ant. .elationship banking is the ne$ paradig& for s"r%i%al and s"##ess( e&bra#ing a Mshare of #"sto&er= approa#h to gro$th by identifying( prote#ting and e2panding #"sto&er relationship.
'II.BIB(IOGRAPHY
>ebsites @isited
www.google.com www.answers.com www.saraswatbank.

2
in

Banking Services

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Banking Services

Uploaded by

Copyright:

Available Formats

Banking Service in India

I. HISTORY OF BANKING IN INDIA

1) Pre-Nationalization Era. 2) Nationalization Stage. 3) Post iberalization Era.

Banking Service in India

Banking Service in India 2) Nationalization Stages!

Banking Service in India

+ndhra -ank. ,orporation -ank.

Banking Service in India

Banking Service in India

Banking Service in India 3) Post- iberalization Era---Thr"st on C"ality and Profitability!

Banking Service in India

Banking Service in India Pri%ate Se#tor -anks

Banking Service in India

Entry of Pri%ate Se#tor -anks!

Banking Service in India

Private Sector Banks

Old Pvt. Sector Banks (25)

New Pvt. Sector Banks (9)

Banking Service in India

Banking Service in India

Banking Service in India

II. BANKING IN INDIA

?rganizational Str"#t"re of -anks in India!

.eser%e -ank of India .eser%e -ank of India

Commercial Banks Commercial Banks Nationali Nationalied ed Private Private

Co-operative Banks Co-operative Banks S!ort-term S!ort-term credit credit

Development Banks Development Banks

"on#-term "on#-term credit credit *nd%strial *nd%strial $#ric%lt%ral $#ric%lt%ral

$#ric%lt%ral $#ric%lt%ral Credit Credit

&r'an &r'an Credit Credit

Banking Service in India -road ,lassifi#ation of -anks in India!

2) P"bli# Se#tor -anks!

3) Pri%ate Se#tor -anks!

4) ,o-operati%e Se#tor -anks!

Banking Service in India

9) 1e%elop&ent -anks! 1e%elop&ent -anks &ostly pro%ide long ter&

Banking Service in India

Banking Service in India

Banking Service in India

The .ole of .eser%e -ank of India 3.-I) J -anker=s -ank!

Banking Service in India

Banking Service in India

Banking Service in India

Banking Service in India

Banking Service in India

Banking Service in India

Banking Service in India

Banking Service in India

Banking Service in India

III. PRODUCTS AND SERVICES OFFERED BY BANKS

The different prod"#ts in a bank #an be broadly #lassified into!

.etail -anking. Trade Dinan#e. Treas"ry ?perations.

Banking Service in India

Banking Service in India

,o&&on -anking Prod"#ts +%ailable!

So&e of #o&&on a%ailable banking prod"#ts are e2plained belo$!

Banking Service in India

Banking Service in India

+"to&ati# Teller )a#hine! The introd"#tion of +T)=s has gi%en the

Banking Service in India

Banking Service in India

Banking Service in India

E-,hea:"es! The e-#hea:"es #onsists fi%e pri&ary fa#ts. They are

"on#-term "on#-term credit credit nd%strial nd%strial $#ric%lt%ral $#ric%lt%ral

,("(P/ON(1 B-$NC/1 ("(C,-ONC B$N.N01 etc

/($D O22C( -S. +ON,O-*N0