BANKING INDUSTRY

A Glimpse of Banking sector

Phase-1
Early phase from 1786 to 1969 of Indian Banks
Phase-2
Nationalization of Indian Banks and up to 1991 prior to
Indian banking sector Reforms
Phase-3
New phase of Indian Banking System with the advent of
Indian Financial & Banking Sector Reforms after 1991

Phase-1
GENERAL BANK OF INDIA 1786(FIRST BANK)
RESERVE BANK OF INDIA 1935
Slow growth and periodic failure
THE BANKING COMPANY ACT 1949
People mostly save in postal deposits.

Phase-2

Nationalization of imperial bank of India and formation of sate bank of India(1955)

Nationalization of SBI and Subsidiaries(1960)

Insurance cover extended to deposits

Creation of credit guarantee corporation

Creation of regional rural banks

Phase-3
Entry of Foreign Banks
Phone Banking and Net-Banking
Shelter from external macroeconomic shock
System become more convenient and swift

WHAT IS BANK?
A banker or bank is a financial institution
whose primary activity is to act as a payment agent
for customers and to borrow and lend money.
An institution where one can place and borrow
money and take care of financial affairs; A branch
office of such an institution.
The first modern bank was founded in Italy in
Genoa in 1406, its name was (Bank of St. George).

FUNCTIONS OF BANKS
Accepting Deposits from public/others (Deposits).
Lending money to public (Loans).
Transferring money from one place to another
(Remittances).
Acting as trustees.
Keeping valuables in safe custody.
Government business.

RBI

Schedul
ed

Commer
cial

Public

Private

Foreign

Unsched
uled

Cooper
ative

RRB

Urban

Rural

TYPES OF BANKS
Public sector Banks
Private sector Banks
Co-operative Banks
Development Bank/Financial institutions

Public sector Banks

Some Public Sector Banks in India:
Central Bank of India
Corporation Bank
Dena Bank
Bank of India
Indian Overseas Bank
Oriental Bank of Commerce
Punjab & Sind Bank

Private sectors Banks

New generation private banks
ICICI Bank
IDBI Bank
Axis bank

Foreign banks operating in India

HSBC BANK
CITI BANK
ABN-AMRO BANK
STANDARD CHARTED BANK

CO-OPERATIVE BANKS
The Co operative banks in India started functioning almost 100
years ago.
The Cooperative bank is an important constituent of the Indian
Financial System.They are setup to provide easy loans to farmers
or other persons to set up his buisness.
They are non profitable banks.
Cooperative banks in India finance rural areas under:
Farming
Milk
Personal finance
Some example of co-operative banks in IndiaIDBI BANK(INDUSTRIAL DEVELOPMENT BANK OF INDIA)
IFCI BANK(INDUSTRIAL FINANCE COOPERATION OF
INDIA)
APEX BANK

The Reserve Bank of India

History: Become operational on April 1,1935

Nationalized in the Year 1949.
Major objectives: Regulate the issue of banknote.
Maintain reserves with a view to securing monetary stability.
To operate the credit and currency system of the country to its
advantage.

Functions of RBI
The fuctions are classified into three heads: Traditional functions
Promotional functions
Supervisory functions

Traditional functions
Monopoly of currency notes issue
Banker to the Government (both the central
and state)
Fight against economic crisis and ensures
stability of Indian economy.
Controller of ForEx and credit
Maintaining the external value of domestic
currency

Promotional functions
Extension of the facilities for the small scale
industries
Innovating the new banking business
transactions.
Extension of the facilities for the provision of
the agricultural credit through NABARD

Supervisory functions

Granting licence to Banks.

Periodical review of the work of the
commercial banks.
Control the non-banking finance corporation.

HOW IT CONTROLS BANK &

ECONOMY
TOOLS: CRR( CASH RESERVE RATIO): 5.5%
REPO RATES(RR):7.5%
REVERSE REPO RATE(RRR): 6.0%
STATUTORY LIQUIDTY RATIO (SLR):24%
BANK RATE: 6.0%