BANKS AND WOMEN EMPOWERMENT Shri C.M.

Nanjappa I PUC, Sri Venkateshwara College, Hassan Empowerment of women is essentially the process of upliftment of economic, social and political status of women, the traditionally unprivileged ones in the society. It involves the building up of a society wherein women can breathe without the fear of oppression, exploitation, apprehension, discrimination and the general feeling of persecution which goes with being a woman in a traditionally male dominated structure. One major therapy prescribed by women empowerment advocates is empowering women through legislation for ensuring participation in political decision making. Such an approach provides the women with a constitutional platform to stand up to men, to raise their voice on issues concerning women oppression, subjugation and related issues and thus in effect, providing them with an identity in an orthodox male dominated socio-political set up, in addition to providing a much needed forum to seek redressal of problems directly affecting them, the true essence of empowerment. Since women comprise the majority of the population below the poverty line and are very often in situations of extreme poverty, given the harsh realities of intrahousehold and social discrimination, macro-economic policies and poverty eradication programmes will specifically address the needs and problems of such women. There will be improved implementation of programmes which are already women oriented with special targets for women. Steps are being taken for mobilization of poor women and convergence of services, by offering them a range of economic and social options, along with necessary support measure to enhance their capabilities. Before 1990s, credit schemes for women were almost negligible. The concept of womens credit was born on the insistence by women oriented studies that highlighted the discrimination and struggle of women in having access to credit. However, there is a perceptible gap in financing genuine credit needs of the poor, especially women in the rural sector. The Government measures have attempted to help women by implementing different poverty alleviation programmes but with little success. Since most of them are target based involving lengthy procedures for loan disbursements, high transaction costs and lack of supervision and monitoring, Banks often suffer from poor repayment leading to a high level of non-performing assets.

Inorder to enhance womens access to credit for consumption and production, the establishment of new and strengthening of existing micro-credit mechanisms and micro-financial institutions is being undertaken so that the outreach of credit is enhanced. Other supportive measures are being taken to ensure adequate flow of credit through extant financial institutions and banks, so that all women below poverty line have easy access to credit. Micro-credit has been promoted as a tool not only of womens economic empowerment, but also of social and political empowerment. An assumption of micro-credit is that these programmes will significantly increase womens incomes, enable women to control that income and also enable them to negotiate improvements in their status within the household. It was also assumed that micro-credit would give women access to support networks that enables them to advance their individual and collective interests at the local as well as macro-level. Banks generally use individual rather than group-based lending and may not have scope for introducing, non-financial services. This means that they cannot be expected to have the type of the focused empowerment strategies which NGOs have. Nevertheless, they can be actively involved in collaboration with other service providers giving for example:

Enterprise and business development services for women and providing loans to female trainees Legal aid services for women Reproductive health services for women

Now-a-days the Banks are focusing a lot on the empowerment of women. Given below are a few examples to show what some of the banks are doing to empower women and how they are playing a leading role in the life of women. SEWA Bank now profits in millions. It presents a wonderful example of how poor, female and illiterate clients can keep properly managed micro-credit enterprises solvent and more. But the social impact of this womens bank cannot be captured in an accounts register. The ability of poor women to use credit productivity depends on broader socioeconomic contexts. As SEWA prioritises the needs of those who work, save and borrow rather than some inert blueprint of capital growth, it helped rehabilitate Zebunissa even though the passbook she had salvaged showed a loan outstripping her deposits. Established in 1906 by the captains of Indian industry, Bank of India was brought into the public sector in 1969. It continues to occupy a premier positioning the Indian banking scene today in terms of physical presence, asset level, range of well

structured products and services and staff skills both in the cosmetic and international banking spheres. There are several Indian women who have been successful in transforming their lives by taking loans from Bank of India. Apart from general loan schemes, which are meant for both men and women, women entrepreneurs are also eligible for finance under Government sponsored programmes such as Prime Ministers Rozgar Yojana for educated unemployed young women in both urban and rural areas and the Swarna Jayanathi Sahakari Rozgar Yojana in urban areas. Have you ever seen a bank with no telephones, no typewriters, no carpets, no loan agreements and mostly, run by women? Well, difficult as it is to believe, there is one: The Grameen Bank. Grameen is not noticeably bank-like. But it does lend money and does get repaid with interest. There are a few other companies and organizations which are working for the betterment of women such as, The Reliance Insurance company has also introduced various plans for the betterment of women like the Automatic Investment Plan for example: The successful working of Mahila Mandals has resulted in the formation of a large number of Self-Help Groups amongst women. Mahila Viaks Nidhi is a specially designed fund for economic empowerment of women. Lately a section of the development community has been questioning the impact of female-targetted micro-finance. Nirantar, a womens resource centre, has been drawing media attention to the rise in womens indebtedness as a result of backto-back lending, higher incidence of violence in the event of women being unable to bring into the family the credit that is expected of them, and the tremendous pressure on women to repay which can cause them to migrate. Only training aimed at empowerment, and not just at employment can help poor women given their socio-cultural background identify the kind of competences needed to survive adequately and fruitfully in the commercial web. Training for empowerment will equip women to create conditions adequate for survival even when their present employment terminates. Womens entrepreneurial abilities are not always approved by their family; workloads are exhausting with the double burden of taking care of the home and family, as well as earning a livelihood; they enter into competition with less

knowledge and training than their male counterparts; they have limited access to capital, with many banks doubting their credibility. I would like to conclude, all in all, it is operative to recognize that the training needs and challenges of informal sector workers are far from being unidimensional. It is hardly a linear path leading from informality to formality. The challenges are enmeshed within the socio-economic conditions of the groups. Vocational training is one of the aspects along with these challenges can be addressed. What is required is a set of competencies which empowers the workers to make the right entrepreneurial choices. This is even more crucial for women operating in the informal sector.

BANKING AND WOMEN EMPOWERMENT Kum. Priyanka S. Yadgiri II Year Science C V.B. Darbar College Before 1990s, credit schemes for rural women were almost negligible. The concept of womens credit was born on the insistence of women oriented studies that highlighted the discrimination and struggle of women in having access to credit. However, there is a perceptible gap in financing genuine credit needs of the poor especially women in the rural sector. There are certain misconceptions about the poor people that they need loan at subsidized rates of interest on soft terms, they lack education skills, capacity to save credit-worthiness and therefore are not bankable. Nevertheless, the experiences of several SHGs (self-help groups) reveal that rural poor are actually efficient managers of credit and finance. Availability of timely and adequate credit is essential for them to undertake any economic activity rather than credit subsidy. The Government measures have attempted to help the poor by implementing different poverty alleviation programmes but with little success. Under the trickle down theory in the planning process it was expected that women will equally benefit along with men. This has been belied by actual development. The 9th plan document recognizes that inspite of development measures and constitutional legal guarantees - women have lagged behind in almost all sectors. In India, the emergence of liberalization and globalization in early 1990s aggravated the problem of women workers in unorganized sectors from bad to

worse as most of the women who were engaged in various self-employment activities have lost their livelihood. Despite in tremendous contribution of women to the agriculture sector, their work is considered just an extension of household domain and remains non-monetised. Empowerment implies expansion of assets and capabilities of people to influence control and hold accountable institution that affects their lives. Empowerment is the process of enabling or authorizing an individual to think, behave, take action and control work in an autonomous way. It is the state of feelings of selfempowered to take control of ones own destiny. It includes both controls over resources and over ideology (beliefs, values and attitudes). Empowerment is a multi-dimensional social process that helps people gain control over their own lives, communities and in their society, by acting on issues that they define as important. Empowering women puts the spotlight on education and employment which are an essential element to sustainable development. EMPOWERMENT : FOCUS ON POOR WOMEN In India, the trickle down effects of macro-economic policies have failed to resolve the problem of gender inequality. Women have been the vulnerable section of society and constitute a sizeable segment of the poverty-struck population. Women face gender specific barriers to access education health, employment etc. Microfinance deals with women below the poverty line. Micro loans are available solely and entirely to this target group of women. The problem is more acute for women in countries like India, despite the fact that womens labour makes a critical contribution to the economy. Evidence shows that groups of women are better customers than men, the better managers of resources. If loans are routed through women, benefits of loans are spread wider among the household. Since womens empowerment is the key to socio-economic development of the community; bringing women into the mainstream of national development has been a major concern of government. The ministry of rural development has special components for women in its programmes. Funds are earmarked as Womens component to ensure flow of adequate resources for the same. Besides Swarnajayanti Grameen Swarojgar Yojana (SGSY), Ministry of Rural Development is implementing other scheme having womens component. They are the Indira Awas Yojana (IAJ), National Social Assistance Programme (NSAP), Restructured Rural Sanitation Programme, Accelerated Rural Water Supply Programme (ARWSP) the erstwhile Integrated Rural Development Programme (IRDP), the erstwhile Development of Women and Children in Rural Areas (DWCRA) and the Jawahar Rozgar Yojana (JRY).

CONCEPT AND FEATURES OF MICRO FINANCE The term Micro Finance is of recent origin and is commonly used in addressing issues related to poverty alleviation, financial support to micro entrepreneurs, gender development etc. Micro finance is defined as Provision of thrift, credit and other financial services and products of very small amounts to the poor in rural semi-urban or urban areas for enabling them to raise their income levels and improve the living standards. The term Micro literally means small. WOMENS EMPOWERMENT AND MICRO FINANCE : DIFFERENT PARADIGMS Concern with womens access to credit and assumptions about contributions to womens empowerment are not new. From the early 1970s womens movements in a number of countries became increasingly interested in the degree to which women were able to access poverty-focussed credit programmes and credit cooperatives. In India, organizations like Self-employed Womens Association (SEWA) among others with origins and affiliations in the Indian labour and womens movements identified credit as a major constraint in their work with informal sector women workers. The problem of Womens access to credit was given particular emphasis at the first International Womens Conference in Mexico in 1975 as part of emerging awareness of the importance of womens productive role both for national economies and for womens rights. This led to the setting up of the Womens World Banking network and production of manuals for womens credit provision. Other womens organizations world-wide set up credit and savings components both as a way of increasing womens incomes and bringing women together to address wider gender issues. ROLE OF DEVELOPMENT BANKS MAHILA VIKAS NIDHI (MVN) MVN is specially designed fund for economic empowerment of women. Training and employment opportunities are provided to them through creation of necessary infrastructure. Besides supply of improved inputs, production and technological improvements are also covered under the MVN scheme. The progress of this scheme has been noteworthy. NATIONAL BANK FOR AGRICULTURAL AND RURAL DEVELOPMENT (NABARD) AND ITS OPERATION A pilot project for linking SHGs with banks was launched by NABARD in 1992. The Reserve Bank of India (RBI) persuaded commercial banks, regional rural banks and co-operative banks to actively participate in the linkage programme.

Under the RBIs guidelines, banks were given permission to open saving bank account in the name of SHGs and relaxation of security requirements. WOMEN CENTRED ACTIVITIES To tap the potentialities and managerial capacities of rural women RASS has implemented several activities. RASS has been instrumental in organizing rural women to show their strength and defend themselves for their rights with the formation of Mahila Mandals. These Mandals work under the direct supervision and guidance of RASS and also, get regular information about Government programmes, bank financing, marketing trends etc. The successful working of Mahila Mandals has resulted in the formation of large number of SHGs. For women to get gainful employment especially belonging to SC, ST and BCs, RASS provides training facilities and generates innovative programmes. The vocational skills, thus acquired, help women to be self-reliant. GROWTH AND PERFORMANCE OF SHGs The successful working of Mahila Mandals has resulted in the formation of a large number of SHGs. In 1990, with the help from RASS, 30 SHGs were formed involving 10-15 women members. Within a year, there were 123 SHGs with a total membership of 1559 women. A significant feature of this system was that a large number of women shifted their borrowing from traditional moneylenders to SHGs at reasonable rates of interest. Moreover, RASS has linked with Rashtriya Mahila Kosh (RMK) and NABARD to mobilize funds. Some of the notable features of this scheme are a high percentage (96) of repayment, utilization of funds for income creating activities and generation of saving by women members in the SHGs. MICRO FINANCE INSTRUMENT FOR WOMENS EMPOWERMENT Micro Finance is emerging as a powerful instrument for poverty alleviation in the new economy. Perception women is that learning to manage money and rotate funds builds womens capacities and confidence to intervene in local governance beyond the limited goals of ensuring access to credit. Further, it combines the goals of financial sustainability with that of creating community owned institutions.

ROLE OF BANKS IN THE DEVELOPMENT OF VILLAGES

Kum. Priya S. Patil Presentation Girls Composite P.U.College Dharwad India is our country. It is the seventh largest country in the world. India is a country that is full of villages. Villages are the centres of Indias life. More than 70% of the people live in villages. The main occupation of the villagers is agriculture. It is the farmer who produces food for the nation. The far is popularly known as Negilayogi. Further, the essential commodities like milk, curds, butter and vegetables are produced only in villages. From the villages these items are taken to cities and towns. Raw materials like cotton, oil seeds and other products are also available only from a village. Even the labourers working in towns come mostly from the villages. A village occupies a very important place in Indian life. So it is said from Halli to Delhi or think of the village first and then of Delhi. The village is the backbone of all progress and development of the nation. The nation is totally dependent on villages. It is for this reason that Gandhiji advocated Grama Swarajya for the growth of villages. If villages grow, the nation will progress. The general hinderances to the progress and development of the villages are poverty, illiteracy, debt, uncertainity of rainfall, non-cooperation among the members of the community, communal feelings and the atrocities of landlords and the rich on weaker sections. The poor who are unable to fulfill their basic necessities like food, clothing and shelter struggle day and night in the fields of rich landlords to have a meal per day. The farmer who tills the land grows the yields and flatly handovers it to the owners. The tiller works days and nights together to get a bread of one day. This is the poor condition of the farmers in villages. Earlier the word bank seemed to be strange for the people who were ignorant about this. In ancient days people used to save their money in knots, hiding in pots and also under the earth. But, people could not save considerable amount of money because the money kept like that was driven away either by robbers or by natural calamities like earthquake, water over flow etc. So people did not have any safe measures to save money. T.M.A. Pai was the pioneer to start the first time in India. He was from Maharashtra and the villagers had fishing as their occupation. He made the fishermans their to take out 25 paise each day and made them to keep it in the bank and the money was used for the farmers or fisherman whenever they were in need of it. Like this from that day today it has been rendering service to people by giving security to the money kept at the bank and giving low interest. The bank was Syndicate bank of Maharashtra and today it has its branches all over India. Today it has become a famous bank in Maharashtra.

Co-operative societies and co-operate banks were started by the weaker sections of the society to free themselves from exploitation. Especially women have been employed from these societies. i.e., they provide loans for women to start group works such as craft making snacks making, agarbathi making, pickles making, cotton making in the cottage industries. Women can form groups like Shree Sakti or Swayam Sahaya Sanhgha by which they can be employed and make other women not only employed but also literate them by providing night schools especially in rural areas. Even women can have hen farm, Milk Diary which are the major source of income in daily life. Co-operative banks or Grameena banks implement schemes and many programmes for the development of children recently it has undertaken Black board Scheme in which they provide black board for each schools in rural areas inorder to literate the children. Adults in urban areas i.e., the town and city people can be offered loans for foreign and higher class studies after which they stand on their own legs the loan has to be repaid with low amount of interest. Nationalised banks provide loans for constructing houses for residence. There is rapid expansion of the branch network of these banks and they are helping common people by providing financial assistance who take up self-employment. By 1997, there were about 63,534 branches of banks all over the country. These banks fulfill all the requirements of rural people. There are more than one lakh cooperative banks in our country. From these banks our farmers and economically weaker sections get: a) Short term loans (which can be repaid in 15 months). b) Medium term loans (Duration of which extents from 15 months to 7 years). c) Long term loans (Duration of which extends from 7 years to 25 years) These banks are very helpful in a country like India, which is dominated by rural areas. At the village level there are Primary Agricultural Co-operative Banks with branches at taluk level and at state level there are Apex Banks. At the District Level there are District Central Co-operative Banks. All the co-operative banks have affiliation with State Apex Banks. The important Stock Markets are i. State Financial Corporation (SFC) ii. Industrial Development Bank of India (IDBI) iii. Industrial Credit and Investment Bank (ICIB)

iv. Small Industries Development Bank (SIDB) v. Foreign Exchange Banks (F.E.B.) Uses of banks: Many a times we need more money than what we possess. In the same way our excess money is advanced as loans to others. Taking loans and advancing loans is called Banking. We preserve the wealth we gained for future use in the form of money providing institutions are Land Development Banks, National Bank for Agricultural and Rural Development (NABARD), State Cooperative Apex Banks, Industrial development Banks, Unit Trust of India, Life Insurance Corporation of India and also the nationalized banks. The Reserve Bank of India is established to control and regulate the affairs of these financial institutions. There are Co-operative Banks also. Not only for agriculture banks provides loans to buy vehicles that are helpful for agriculture i.e., Tractor which is a modern method used for sowing. Also the products (agricultural) produced must be transported for the distribution in regulated markets by Trucks, Trains etc., for the loans farmers would not wait for weeks or months together i.e., loans are available within a short period of three days nowadays. Banks provide so many loans; Do you think that banks do for their profit? No, it is not for the profit of banks but it is like taking water from the pond and then throwing into the same pond i.e., the banks are from the people and for the people. They provide loans form the invested money of others and take interest from them on the contrary the person who has invested gets the interest for investing over a certain period of time only. In this way banks are helpful for the people. The banks were not much started earlier so if people wanted to keep money in banks they had to travel from far away places; if he was a labour he had to miss his daily wages at that day and spend money on his traveling charges and had to reach over the bank. People had to face many difficulties of such type. The village people were illiterate and could not take the use of banks. Nowadays, banks have been flourished on each nook and corner of town as well as villages rendering services to the people for their various needs. Do we know what exactly banks are? : Banks: Banks help in the mobilization of the savings of the people and their savings are utilized in productive sectors or to provide credit to the people for various purposes. Even though farmers have agriculture as their occupation no such good yields are produced because of the following reasons:

i) Our farmers are poor and cannot invest money on modernisation ii) Irrigation facilities are inadequate and our agriculture is a gamble with rainfall. iii) Agricultural land is subject to sub-divisions and fragmentation. iv) Old methods are still followed. v) Soil erosion takes place during the rainy season. vi) No proper marketing facilities are available for agricultural production and vii) Our farmers are ignorant about modern methods of cultivation and the literacy rate in villages is low. In almost all the Five-year Plans, measures have been taken to improve agriculture. They are first of all Banks are the helpers with them nothing is possible. As farmers are poor banks provide long term as well short term loans for the modernization of agriculture. Since our agriculture is a gamble with rainfall bank also provides loans for irrigation facilities such as drip irrigation etc. Bank also provides loans for owning more land which avoids sub-division and fragmentation. It also provides loans for fertilisers, pesticides, insecticides. The co-operative banks also provide good quality seeds not only that but also provide training for their sowing, harvesting and also provide many other things. Irrigation has been provided through many multi-purpose river valley projects. Through co-operative societies proper marketing facilities have been provided and also loans at lower rate of interest are made available. Not only marketing facilities but these societies also provide training for the farmers how their products should be sold with all communication skills needed. By this farmers get standard yield for their products. Banks also provide stock market and capital markets. Together with banks many other financial institutions which go hand in hand with banks also provide longterm and short-term loans for agricultural development. The important capital we deposit our savings in the banks. By doing so the volume of money will increase, because interest is added to our deposits. It helps our future. Our saving and deposits help in the economic development of nation also. Through money the value can be transferred from one place to another safely, easily and quickly. Quick transfer of money is possible through banks, as a result

scientific and technological advancement. This helps in the economic development of world also. We say from the first to last about loans, loans loans !!! what is the main duty of people after taking loans. They must be able to repay the loan within a given period of time which would be useful and safe for them. The farmers should not create any situations of having debt which cause severe problems later. The bank and the people must go hand in hand then only the nation will progress and can compete with other countries which are already developed. FIRST PRIZE Name of the Student: Urvashi Bhat Class: XI Name of the School: SOS Herman School, Jammu Category: XI-XII Position Secured: Ist Topic: More Banking More Development Banking means the business of a bank or banker. It is essentially a craft based on methodology and practices. We have moved a long way from the time when a bank was a mere deposit taking and money lending institution, veiled in conservatism and managed by people whose aim was maximum profits with minimum risks. A banker then was a fair-weather friend, lending an umbrella on sunny days and withdrawing it when it rained. Banking in India has had a thorough shake-up in the 50s, particularly with the conversion of the Imperial Bank of India into the State Bank of India. The old concepts, attitudes and methods in banking have yielded place to new techniques of viability, need-based finance and marketing. Today banks are participating in the nation-building activities and helping in bringing about socio-economic changes. Banking system has occupied an important place in a nations economy. A banking institution is indispensible in a modern society. It plays a pivotal role in the economic development of a country and forms the core of the money market in an advanced country. In the past several decades there were commercial banks and cooperative banks then in the middle of seventies Regional Rural Banks came into existence, the expansion of banks in such a way has organized the money market in rural areas as well.

Earlier, people used to borrow money from Zamindars and then these Zamindars used to take handsome money from them and charged too much interest that inspite of their whole life labour, they were unable to pay it. As a result these Zamindars occupy their lands, property, jewellary etc. and always try to cheat them in a way they can. But with the introduction of banking the situation was under control. With this poor, rich, daily labours started saving money and then soon the scheme of taking of loans was started, which proved a great boon for farmers. From this very beginning today our farmers have got so freedom to use banks that they can fulfill their every need which may be smaller than the small or bigger than the big one. These banks are always there to provide them their maximum support and guidance. Banks finance farmers in their way to progress in any way. They provide them loans to get advanced machines, fertilizers and many more facilities. The Agriculture Refinance and Development Corporation (ARDC) is the apex institution in the field of agricultural financing. For financing agriculture and allied activities in the rural areas, though co-operative credit societies and Central Cooperative Banks have been participating since long, commercial banks began their active participation after the nationalization of major banks in 1969. The banks have penetrated into the country side by opening their branches in rural and semiurban areas. They have adapted their lending policies and practices to suit the needs of the rural clientele, the motivational force behind this transition has been the Reserve Bank of India and the government which provided them the operational guidelines, introduced the system of institutional guarantees and reduced the risks involved in financing agriculture. A farmer needs short term credit in the form of crop loans to purchase seeds, fertilizers and pesticides and also to meet the labour cost, irrigation and other expenses of cultivation. Normally, they are repayable within 12 months but for the convenience of farmers it may be extended up to 18 months. Banks, as social organization, have to go out to the people and assist weaker sections in achieving their aspirations. They are thus, to act as catalytic agents for the development of the country, mobilizing resources whenever these be and channelizing them towards productive purposes. New strategies have been evolved for industrial development, both in small-scale and large-scale sectors and rather than confining to the traditional way of storage and distribution finance of a shortterm nature, developmental finance and term lending have to be taken up by commercial banks. As our country falls in the category of developing countries, the banks are playing a vital role to make it a developed nation. These banks are not only benefitting small-scale and large-scale sectors but providing a guarantee of bright future to our

younger generation as they are the future of the country. They provide loans to the students for pursuing graduate and post-graduate studies, for professional courses or job-oriented diploma courses in India or for higher education abroad. The normal rate of interest for the students lies between 15% and 17% but it is 10% in case of advances to indigent students i.e those students whose total annual family income does not exceed Rs. 6,000. It has many HDFC plans for children and their little dreams. In this way it made the countries future strong and efficient enough to reach to the peak. Banks are also providing housing loans in direct or indirect way. It is providing direct housing loans to scheduled castes/tribes and other economically weaker sections of the society. Amount of loans may be up to Rs. 5,000, interest is charged at the rate of 4% from scheduled castes/tribes and 12.5% from others. These loans may be up to 80% of the total cost of the houses and indirectly housing loans through government agencies for slum clearance and rehabilitation of slum dwellers. In this way banks are proving boon not only for upper class but also for people considered as low class. For retail traders in fertilizers and mineral oil with an annual turnover up to Rs. 10 lakhs and other retail traders with an annual turnover up to Rs. 4 lakhs are eligible to borrow, for the purpose of acquisition of fixed assets and tools and other equipments required for the trade and short term loan: 12.5% for loans up to Rs. 5, 000; between 12.5% and 15% for loans between Rs. 5,000 and Rs. 25,000 and between 15% and 19.5% for limits above Rs. 25,000. For even a small businessman individuals or firms managing business enterprises which provide services other than professional services, the cost of their equipments should not exceed Rs. 2 lakhs. These services include cycle hire shops, booking, clearing and forwarding of goods, beauty parlours, hotels, juice vendors, launderers, mobile restaurants and publishers-cum-booksellers, for the purpose of acquisition of fixed assets and tools etc. with the rate of interest as term loans for over 3 years at 15% and short-term advances up to 17.5%. In case of professionals and self-employed persons, any individual or a firm who or every one of whose partners is (i) trained in any art or craft and (ii) holds either a degree or a diploma or is considered to be technically qualified or skilled in his line and is rendering professional service. Firms and joint ventures of professionals and self-employed are also eligible, with the amount of loans up to Rs. 2 lakhs for the purpose (i) for purchase of equipments, repairing or renovating of existing equipments, acquisition or repairing of business premises, purchase of tools and (ii) for working capital requirements at the rate of interest for term loans for 3 years 15% and for

short-term loans up to 17.5%. Banks also provide consumption loans to small and marginal farmers with land holding up to two hectares, landless labourers, rural artisans and other people of very small means, like carpenters, barbers and washermen, with the amount for various purposes like Rs. 250 per family for marriage or medical treatment; Rs. 100 for educational purposes and Rs. 75 for funeral, birth or religious ceremonies or general consumption. For two or more purposes loan up to Rs. 500 per family per year may be granted. Against the security of gold and silver ornaments loans up to Rs 1, 000 per family may be sanctioned. These loans are granted mainly on the personal security of one or more individuals or groups of persons. Security of gold and silver ornaments and consumer durables is taken whenever available. The loan should be related to the borrowers minimum needs and his capacity to repay at the rate of interest of 12.5% per annum. Indian banks has progressed in every sphere and involved every single individual and even it has many plans for old people. In the present scenario, the world is changing with a great speed so is the introduction of new schemes in banking. We have ATMs at every corner of our country, we have credit cards, debit cards, anyway banking, insurance policies etc. All this has made life luxurious and comfortable. Now, advancement has reached its peak as we have online banking through which we can conduct almost all our banking activities on the phone, except withdrawal of money. Despite all the advantages of convenience, speed and savings, less than 10% of approximately 47 million bank customers in India have subscribed to net banking. Phone banking is the most popular self banking channel today. They may soon change, as mobile and net banking coverage on a complementary platform. Branchless banking is much more than banking. It can pervade your entire financial portfolio. You can bank much more than before, but with much less effort and cost. Thats unsurprising. Banks are emerging as financial superstars offering everything from insurance to mutual funds. They are no longer mere wealth accumulators or custodians; they now help in wealth creation and wealth management. Soon, debit and credit cards will be replaced by m-banking. The push and pull factor of branchless banking is too compelling for temporary glitches to become popular. Only, most bankers believe that e-bankings evolution will not completely replace the bank branch. Even now most customers wish to maintain a traditional banking relationship so banks cant shed existing infrastructure in a hurry. Ultimately, e-banking spells more self-reliance and less hand holding. This type of

banking not only saves time but also takes our country towards the light of complete development and advancement. We are passing through a very competitive banking era. Customer satisfaction is must. To meet the competition, the banks have taken many initiatives under Business Process Re-engineering and also taken up an ambitious project for implementation of core banking solutions for providing Anytime Anywhere Banking. CBS gives us the capability to provide value added services to customers across multiple delivery platforms through integration of channels. The BPR initiatives launched by the Bank would leverage CBS for realizing the intended business benefits. Not withstanding teething problems, the CBS offers a very good platform to us to improve our competitive position. Many new products like CORE POWER, offers many free value added services to the customers of our CBS branches like instant transfer of funds from their accounts to any other account in any other CBS branch and vice versa. Similarly, they can transact their banking business like encashment of cheques, drafts issue, deposit of cheques drawn on any local bank at any other CBS branch. With the advantages of Core Power we can easily experience and appreciate the benefits of new technology. The banks in India are striving hand by making best use of new technology. Today as the competition is increasing so is the tension of students. As most of the students are rushing towards management stream as educational loan is the only alternative for most students opting this stream. Because of good job prospects and little risk in recovery, most government banks readily provide assistance in the form of subsidized loans. With the cost of management courses touching the sky, cobbling resources has become crucial for students. While plenty of banks provide education loans at concessional rates, students need to do extensive research to ensure they get the best deal in upper limits and collateral requirements before they take the plunge. As the banking in India has reached at the top and trying to become more and more advanced day-by-day. India is developing under its influence. Banking is having a great influence on India and its citizens. Apart from modernization Indian banks have kept its influence on every common man either of small community or rich. Its hands are always ready to help them anyway. The evolution of banking from Zamindars to debit cards has made a huge difference. It has not only proved the progress of country but also the efforts of people in making their country more mobilized and advance. Even a single man who may be a carpenter or juice vendor can enjoy all the benefits of banks. Its insurance policies, ICICI Prudential Fund, online banking, childrens HDFC plans, housing loans etc. has moved our countrys future towards the shining and bright future of developed India.

Its ATM service, credit cards, debit cards, etc. has made it more popular among common man. Now, more and more people are becoming the customers of banks. For a common man he can save money, can take different policies for secured future, can start his own business with the help of loans etc. Even students can get their own account to save their own money from their pocket money. Banks are day-by-day becoming an indispensible part of the country. As the whole country is involved directly or indirectly with the banking. As we have the Export Import Bank of India, an apex bank which has come into existence in the field of financing the foreign trade of the country. This has led to the maintenance of stronger and good relations with foreign countries. In this way we are able to interact with other countries of the world freely and learn many more things which are needed for more advancement in banking. Many new schemes are taken into consideration by the Government of India to be one of the best banking countries. The day is not far when our country will be counted among one of the developed countries. So, India will be developed with the development in banking. If there is more banking in India then there is more and more development and soon India will be at the top among developed nations. SECOND PRIZE Name of the Student: Karandev Singh Kamra Name of the School: SOS Herman School, Jammu Category: XI-XII Position Secured: 2nd Topic: Role of Banks in Rural Upliftment Banking in India has its origin as early as the vedic period. It is believed that the transition from money lending to banking must have occurred even before Manu, the great Hindu jurist, who devoted a section of his work to deposits & advances & laid down rules relating to rates of interest. During the Moghul period, the indigenous bankers played a very important role in lending money & financing foreign trade & commerce. The Oudh Commercial bank, the first of limited liability bank managed by Indians was founded in 1881. The Swadeshi Movement in 1906 also led to the formation of a number of commercial banks. But the Indian banking came of age only with the establishment of Reserve Bank of India, the apex bank of the country, in 1935 with a capital of Rs. 5 crore which was divided into 5 lakh equity shares of Rs. 100 each. It was nationalized on

January 1, 1949. When the Indian Banking Act was passed in March 1949, extended powers were granted to it for the inspection of non-scheduled banks, i.e. banks not included in second schedule of RBI Act, 1934. The development in rural areas at that point of time was in a ghastly state of affairs. So for the development of banking facilities in rural areas, the Imperial Bank of India (now, the State Bank of India) was partially nationalized. It also had 8 (at present 7) other banks converted as its associate banks which now constitute the State Bank group. When the British left the country, the India economy was in tatters. Not only had the British drained a substantial amount of Indias wealth & resources to Britain, their policies had left deep scars on the economic condition of most of the population. The agrarian sector was the worst hit. Productivity was at an all time low & the financial structure was in no condition to alleviate the distress & miseries of the people. The failure of 588 banks in various states during the decade ending 1949 further complicated the problem. The Banking Regulation Act was passed to bring the situation under control & regulate Indian banking. The main objective was to consolidate the Indian economy & for this rural areas had to be the top priority. As such many steps were taken for the advent of banking culture in rural areas. The main era in the field of banking was the post-nationalisation period in which one of the main objectives was the widening of branch network of banks particularly in rural & sub-urban areas. It is thus clear that upliftment of rural areas has always been the top most priority of the banking policy in India. India currently has 72.2% population living in rural areas. 21.1% of that population, i.e, almost one-fourth of the total rural population is below poverty line. Most of these people are illiterate & have agriculture as the only means of livelihood. Agriculture accounted for nearly 18.5% of the total G.D.P (2006-07 economic survey). With such a huge amount of population currently engaged in agriculture, there are about 31 districts in Andhra Pradesh, Karnataka, Kerala where there is high incidence of farmers suicides. Apart from agriculture the main occupation of people living in rural areas is the employment in small scale cottage & village industries, handicrafts etc. But here also the condition of petty artisans & craftsmen is deplorable. So there arises a need for some government controlled credit structure. The most significant role in the mobilization & allocation of credit is played by the financial sector. The institutional structure of the financial system, at present, is characterized by banks. With a view to give a major boost to agriculture & small scale industries, the National Bank for Agriculture & Rural Development (NABARD) was established on July 12, 1982 with the paid-up capital of Rs. 100 crore having 50:50

contribution of the Indian Government & RBI. NABARD makes all policy planning & operations in the field of credit for agriculture & other economic activities in the rural areas. It serves as an apex refinance agency for institutions providing investment & production credit for promoting various developmental activities in the rural areas. NABARD provides refinance to the state land developmental banks, state cooperative banks, scheduled commercial banks & regional rural banks. To meet its loan requirements, NABARD obtains funds from the Government of India, World Bank & other agencies. Besides, it also utilizes the funds of National Rural Credit Fund. During 1996-97, it sanctioned short-term credit limits totaling 789.9 crores. With the help of NABARD, many villages & individuals were able to script their glorious success stories. Another effort was the establishment of Regional Rural Banks (RRB) in the middle of 1970s with the specific objective of providing credit & deposit facilities particularly to farmers, agricultural labourers, artisans & small entrepreneurs. They provide institutional credit to weaker sections at concessional rates of interest. The RRBs have the responsibility to develop agriculture, trade, commerce & industry in rural areas. The RRBs are essentially commercial banks but their area of operation is limited to a district. At the end of June 2004, there were 196 RRBs covering 516 districts with a network of 14507 branches. The establishment of National Rural Bank was proposed by the Parliamentary Committee on agriculture, finance & credit flow under the chairmanship of N. Janardan Reddy in its 55th report. Small Industries Development Bank of India (SIDBI) another bank for the upliftment of small industries in rural areas was established as wholly owned subsidiary of IDBI. Credit Co-operatives have also been established under a three-tier structurePrimary Agriculture Credit Societies (PACS) at village level, Central Co-operative Banks (CCB) at district level & the State Co-operative Banks (SCB) at the state level. The flow of loans is from SCB to CCB to PACS. Cooperative finance is the cheapest & the best source of rural credit. The rate of interest is low. Cooperatives have played a significant role in the flow of credit to the agricultural sector, both for production & investment. As on March 31, 2001, there were about 1 lakh primary agricultural credit societies with membership of approximately 10 crore. Nowadays Elaquai Dehati Banks are being set up to help the illiterate poor. At the international level, the Grameen Bank, established by the Nobel Prize winner. Mohd. Yunus is a glowing example of the fact that banks have contributed so much to uplift the rural areas, pre-dominantly occupied by the poor. The bank provides credit to the poorest of the poor in rural Bangladesh without any

collateral. The credit is extended in the form of small loans to entrepreneurs too poor to qualify for traditional bank loans. This scheme called micro credit has proven to be an effective & popular measure in the struggle against poverty & the fact that almost 97% loan recipients are women adds icing on the cake. More than half of Grameen borrowers in Bangladesh have risen out of acute poverty thanks to this micro credit. This phenomenal success story has inspired many other countries to establish similar micro credit financial institutions. In India also, the Self Help Group (SHG)- Bank Linkage Programme was introduced in 1992 as a mechanism to provide the poor in rural areas, at their doorstep, easy & self-managed access to formal financial services on a sustainable basis by enabling them to gain access to banking services in a cost-effective manner. To provide adequate & timely support from the banking system to the farmers for their cultivation needs, a model Kisan Credit Card Scheme (KCC) was introduced in August 1998. The Co-operative banks & RRBs were advised to cover all farmers under KCC by end-March 2007 & to make the renewal process of KCCs more user friendly. The KCC scheme made rapid progress with cumulatively more than 645 cards issued up to October, 2006. Loans are also given by banks to farmers for different purposes. The financial needs of farmers are classified on the basis of time & purpose. For the purpose of buying seeds, fertilizers & for marketing of agricultural produce, short term loans for 12-15 months are given by co-operatives. For buying cattle & agricultural implements, repair & construction of wells, medium term loans of 15 months-5 years are given by commercial banks & cooperatives. And long term loans of 5 years-20 years for permanent improvement of land, purchase of costly implements are given by co-operatives & land development banks. But still people in rural areas need to be assured that the money deposited in banks is entirely safe & they can withdraw it in their troubled time. Thus to conclude, banks have been the harbingers of prosperity in rural areas. Though the Indian banking system was bogged down by number of crisis & bank failures which led to its slow progress in the first half of 20th century, yet in the later half of the 20th century & in the current century, the banking system has made rapid strides towards progress. Thus, banks have formed a steel backbone to provide for the upliftment of rural people. With a great spectrum of above mentioned policies they have infused life & blood in the rural economy. CONSOLATION PRIZE

Name: Arnav Omar s/o Kusum Gupta Class: XI Air Force School, Jammu CONSOLATION PRIZE ROLE OF BANKS IN RURAL UPLIFTMENT What is Bank? Bank in literary meaning, is an establishment for guardianship of money to conserve and grow ones savings. In simple language, it is an institution to store and deposit money and valuables to pay out on customers order. In socio-economic terms, it is a medium for rotation of money and provides financial security as well as help when required. It is difficult to imagine a world without currency. Therefore, it is necessary to establish banks so as to rotate the money to the people and build their capacity. Rural life plays a major membership towards the society. In fact, the urban class is mainly evolved from rural class. People belonging to rural class are very useful members of society who can bring prosperity to urban class. Though their life is very miserable, these people including peasants, labourers etc. used to depend upon landlords but their conditions of life does not seems to be improved so far. There are also some poverty-stricken people in rural areas which occupies most of the population. They not only have no access to their basic necessities such as food, clothing and shelter but also cant enjoy the common mans life which they are leading with circumstances, which must be uprooted. Bank provides financial help in the form of loan to the rural people to make them run small scale industries. The loan which is provided to them make them selfsustained and self-dependent in their work. Moreover, it becomes the source for livelihood and employment. M.K.Gandhi in his autobiography well said-Villages are the heart of India, When village will progress , India will develop. India is a country of trimming millions and the second richest on earth, so far population is concerned. In India during Independence, 13% of the population were living in the cities and 87% of population were living in the towns. The population composition has been changed radically within the last 50 years and as per 2001 census 28% of population are living in villages. The flowing population from villages to cities is due to several causes out of which

the most prominent is to get a job in the towns. Bank is playing a big role to solve the problem of rehabilitation of village people. The various programmes providing loan facilities by banks i.e. NREP, RLEGP, JRY, etc. The role of rural co-operative credit banks provides short-term loans to the village people. The NABARD also provides loans to the people. The development of Kishan credit card and debit card for the farmers facilitates the farming activities and production is increases. Banks has prominent role in the rural upliftment by providing loans for the rural industrilisation. Since 1969, after nationalization of the major commercial banks, the banks are opening their branches at the village levels to provide loans to the rural people for industrialization and other activities. The loan carries low rate of interest alternate date to pay and in adverse circumstances like drought, flood and famine they are getting special subsidies. In this way, banks contribute to patronize financial assistance and builds national economic growth. It plays a supportive role in the society. The material social integration of people through gainful employment is an important aspect. Bank facilitates improvement in economic conditions and made it possible for Indian rural population so that they can cultivate their own source of income and profits from them. Therefore, the role of bank for rural upliftment i.e. for the progress of India is unconditionally applauded. Bank reduces the widening gap between the rich and the poor in the society. It creates a perfect balance in a nation. But most importantly, it should be noted that it is a great source of their survival. Its not only a remarkable opportunity provided or sponsored by Rural Planning and Credit Department but also a blessing for them. It reduces misadjustment in population density caused due to the migration of the poor to cities. However, it also conducts peace and harmony in the society among rural and urban as well. Mohammed Younis, who is a founder of Grameen Bank of Bangladesh is a noble prize awardee for economy. He took the crucial decisive role in rural upliftment through banking. In India, the bank had drawn up an ambitious plan to expand in rural and agricredit where it would be adopting the hub and spoke model with one branch catering to surrounding markets with relationship managers interacting with each market.

Microfinance companies in India have grown from their NGO roots to become profit making business. The sector had become mainstream. That means as profits begin to show, more capital would flow into helping the poor. After all they are now bankable. Banks as Financial institutions have helped in the process by providing credit facilities at concessional rates. The government has implemented a number of schemes for providing low cost capital to small enterprises and self-employed person.

Name: Lalit Bhardwaj Class: 11th School: SHIKSH NIKETAN HR. SEC. SCHOOL, JEEVAN NAGAR, JAMMU Consolation prize Role of Banks in Rural Upliftment Introduction- A bank is a financial establishment that uses money deposited by customers for investment and pay it out when required. It provides loan at interest and exchange currency. A bank generate income from difference between the rate of interest it pays for deposits to the people and rate of interest charges from money lenders. It raises funds by attracting people for depositing money in bank and lends out most of the funds to the borrowers. It is worthwhile to mention here that the bank do not lend out all the money kept in the bank but it keep reserve a certain proportion of its funds for depositors who want to withdraw the amount deposited in their bank account. From the very beginning the Reserve Bank of India came into existence and established in the year 1935. During British rule and was functioned as central bank of India. After Independence, with the setting up of first five year plan government of India felt that the private bank may not extend the kind cooperation. The government in the year 1954 set up a committee namely rural credit survey committee for reorganization of bank policy. The committee submitted its report with the recommendation of creation of strong state sponsored partnered commercial banking institution with an effective machinery of branches spread all over the country which lead to establishment of first public sector bank in the name of State Bank of India on 1st July 1955 with the part of share capital by Reserve Bank of India also known as Imperial Bank of India. Similarly first five year plan established during 1956-59 as a result of reorganization of princely state the associate bank came into fold of public sector banking but still the unorganized sectors remained untouched by these private banks which controlled and associated by capitalists leading industrial house in the country with the result farmers, small entrepreneurs, transporters, professionals and self employed had to depend on

money lenders who used to exploit them by charging higher interest rates. In the year 1966 a scheme of social control was set up whose main function was to periodically assess the demand for bank credit from various sectors of the economy to determine the priority for grant of loans and advances so as to ensure maximum and efficient utilization of resources. But this scheme did not yield the fruitful results. Though the number of branches were opened in rural area also but the lending activity of private banks were not oriented towards meeting the credit requirements of the weaker sectors. In the year 1969, 14 leading banks were nationalized by the government having paid up capital of Rupees 28500 crores, deposits of Rs 2629 crores, loans of Rupees 1813 crores with 4134 branches accounting for 80% advances. Similarly, 6 more banks were nationalized in the year 1980 having 91% of the deposits and 84% of advances in public sector banking, There are number of banks functioning in the country but Regional Rural Banks has played a significant role in promoting financial inclusion in unbanked remotest rural areas not covered by other banks. Under 20 point economic programme the government is going to emerge 196 Regional Rural Banks and establish Indian National Rural bank out of which the proposal 100 banks is active consideration of the government. With a view to developing the rural economy Regional Rural Banks were established in 1976 under the provision of ordinance promulgated on 26th September 1975 and R.R.Bs Act 1976. The R.R.B. are jointly owned by government of India. The concerned State government and 27 scheduled commercial banks including two private banks namely Bank of Rajasthan, J&K Bank and one state cooperative bank. The issued capital of a RRB is shared by them in the proportion of 50%, 15% and 35% respectively. The area of operation of the majority of RRB is limited to a notified area comprising a few districts in the state. The R.R.Bs has spread its branches in 525 districts out of 605 districts in the country and 26 state with a network of 14494 branches as on 31 March 2006. The R.R.Bs have made remarkable achievements during the year 2005-06. The introduction of financial sector reforms and sweeping changes in their functioning have resulted in significant improvement in performance of R.R.B. The rural bank has established a women development cell to create awareness among the rural women by organizing meetings, camps and motivation of staff at different level as a women comprises of 50% of countrys population and lag behind the rest of the society due to their socially, educationally and economically backwardness and living in depressed conditions. The efforts are also made for the women to play the role which is required for the

development of rural areas and encourage them to show the wisdom and potential. It is not possible that a woman can bring empowerment through discussions and without money but a women need money for their personal, social and emotional needs. In view of the above as per the need of the hours regional rural bank has launched below mentioned schemes for their upliftment. 17 schemes for financing of Dairy activity for women entrepreneurs. 27 schemes for financing cutting and tailoring for purchasing sewing machines. 37 micro-credit scheme for rural embroidery/kashidakari for women entrepreneurs. 47 Micro-credit scheme for Bangle, beauty items store. The above mentioned scheme go a long way by giving wide publicity so that this neglected strata of the society can get the benefit out of it. It is also pertinent to mention here that men and women have their different needs. Men may be interested in outdoor activities like construction of roads and streets in the village and likewise women may give priority to water top, Balwari etc. Through money self-image of the person can change and he/she enjoys self respect also in the society. This can be possible only through self-help groups. The self-help group completion involve three stages namely. a) Group formation b) Group stablisation c) micro-credit stages. The important features of Self help Group are as under :1) Number of members can be between 10-20. But for irrigation projects there is no ceiling on number of members. For handicap persons group comprises of 5-20 persons 2) Members are generally the persons below poverty line. Members marginally above poverty line normally upto 20% can also be included but they will not be eligible for subsidy. 3) There can be one person from one family in one self-help group. 4) One person cannot be member of more than one self-help group. 5) There have to be regular weekly or fortnightly meetings. 6) The members are to save regularly out of their earnings. 8) Saved funds are meant for lending to members on which decision is to be taken by all members.

9) There should be proper record/book keeping. 10) Registration is optional. 11) Bank linkage by way of saving account-6 months. Besides this under the initiative for doubling of credit flow to agriculture R.R.B had financed new farmers to the extent of 18.58 lakhs in 2004-05 and 17.03 lakhs in 2005-06 and also financed share-croppers/tenant farmers/Oral lessees etc. Restructuring of loan had also helped the defaulting borrowers to become eligible to borrow afreash. These measures have widened the scope of borrowing and are helping-towards achieving 100% financial inclusions in the rural areas. Customer services in the R.R.Bs is very much in the lines with the practices followed by the sponsor bank. Complaints from the customers are attended to and after redressal of complaint a letter of satisfaction is obtained. If the sponsor bank directly receives any complaint the same is taken up with R.R.B and followed up to its logical end. The system of attending customer complaints by the R.R.Bs is as follows. 1) Acknowledgement of receipt of complaint to the complainant 2) Investigation in case of need by head office/regional office of the R.R.B. 3) Take necessary steps for redressing the complaint. 4) Inform the competent authority i.e RBI/GOI/NABARD, if they have forwarded the complaint. 5) Advice the complainant and obtain a letter of satisfaction from him/her. Significant improvement in the performance of R.R.B with a view to provide better customer service, government of India initiated a process for the structural consolidation of R.R.B sponsored by the same bank within a state in the year 2006. The amalgamated RRB will reap benefit of staff rationalization, increased quantum of advances and investment on the increased capital base and the benefit of larger resources and economies of scale. The increase in branch network of R.R.Bs during the last three years are as under. March 2004 14446

March 2005 March 2006

14484 14494

The bankwise branch network varied widely from 8 to 680 among the 133 R.R.Bs during the year 2005-06. The network of the 43 amalgamated R.R.Bs is quite diverse, varying from 85 to 680 branches. The Uttar Bihar Kshetriya Gramin Bank and amalgamated R.R.B has the largest branch network among all R.R.Bs with 680 branches followed by Baroda Eastern Uttar Pradesh Gramin bank with a 539 branches. The R.R.B has also opened No-frill account with low or nil minimum stipulated balances in order to increase hundred percent (100%) financial inclusion/banking penetration in the country. Keeping in view the steps taken up by the rural bank in providing facilities in the far flung areas. The 100% financial inclusion is possible and bank services will be reached to common masses who are excluded/deprived of taking of benefit out of the schemes launched by the R.R.Bs. Certified that the essay has been written by me and these are my own thoughts. Name: Lalit Bhardwaj Class: 11th School: SHIKSH NIKETAN HR. SEC. SCHOOL, JEEVAN NAGAR, JAMMU Banking and Common Man 'BANK' as per the Oxford Dictionary means 'a public place' where money can be deposited, withdrawn or borrowed. Truly, bank is a place where a person can keep his savings and live peacefully and withdraw it as and when required. Banks to facilitate the needs of people have different types of facilities like depositing money in the bank, borrowing money in the form of loan, overdraft facilities etc. 2. Banking originated in the 18th Century in India with the opening of 'General Bank of India' in 1708. The oldest bank in existence is the 'State Bank of India' which was established as 'Bank of Bengal' in Calcutta. The first Indian owned bank was the 'Allahabad Bank'. The Reserve Bank of India' came into existence in 1935. After the Independence, the Reserve Bank of India was nationalized and it was owned by the Government of India. In 1949 an act was passed which enabled the Reserve Bank of India to look into the services provided by other banks.

3. In todays era, bank has become as important as the other basic necessities of life. As Bernar said "Those who are rich, they think love is most important but a common man knows its money". Truly, money has become necessary in todays world. So a common man to save his money, deposits into the bank and lives a relaxed life. Bank provides different types of facilities. Not only money, one can keep even precious articles, such as gold Jewellery etc. safe in banks. Banks provides lockers for such articles. To save money, one can open a saving account or a fixed deposits. Bank provides interest on the money which encourages people to keep their life savings safe in banks. Looking at the increasing and changing needs of the people, banks have also started providing additional facilities like loans - educational loans, home loans, agriculture loans, vehicle loans, business loans etc., overdraft facilities, Mutual funds etc. Every now and then schemes and plans are introduced to encourage people to invest in their banks. It also provides pension for old people. 4. Gone are those days when people had to wait in queues for 20-30 minutes to withdraw cash, 2-4 days to get their cheques cleared, 1- 2 days for demand drafts to be made to wait for long hours for their pass books to be taken by reluctant bankers. With fast needs of people, their growing demands, and provate banks like ICICI, HDFC etc. are coming up. The Government banks have also started providing better facilities to their people. Now the services rendered by them are comparatively faster than before. With changes in technology, advanced facilities are also provided to its customers. Now at a flick of card you can withdraw your cash from ATM. Internet banking that is e-banking and mobile banking have also come up. If your bank provides Mobile / phone banking you can even get your cheques delivered at your door step. Debit cards and Credit cards have also made out lives quite easy. Now we don't have tension of carrying too much Money with us. Just a small card serves the purposes. E-banking can help you to deposit or withdraw your money in which ever part of the world you are. ATM provides you cash at any day or any hour of the year. With the use of computers and electronic gadgets any problem regarding money can be solved for a common man by banks easily. "Every Coin has two sides" Similarly, some services provided by the bank should also be improved, Even today, in some banks the customers are not being properly attended and they are treated as if they are being obliged. Even today, there are delayed payment of cheques, late demand drafts, inconvenience in withdrawing cash etc. Every now and then, customers are disturbed by the banks by calling them and informing about the new schemes and plans which annoy the customers. If a person from other city, gets settled in another city, while opening a saving account needs to give

a verification address of the previous city. Thus for clearing of verification, bank takes over a month which causes a lot of inconvenience. Even for old people, getting pension requires a long procedure and the inconvenience caused to them is often troublesome. "Money is the sixth sense without which the other five cannot be used" The increased need of money and poverty prevailing in India and the increased 'Man's greed' also forces a man to commit crimes such as theft. Thefts in bank have become a very common aspect. Hacking has become very popular. A person good at hacking (that is- a hacker) often hacks the account of other people and transfer all the money into his account. This has now-a-days become a very serious problems, threatened by which a person sometimes hesitate to deposit his money into the bank. 5. To end up with, in a nutshell, banking is a service rendered with an object to help common man. It has become a basic necessity in the life of common man. Banks previously were concerned with withdrawing, borrowing or depositing money but as per the needs of people it has altered itself and no wit provides every help related in terms of money. The common parlance followed by bank is 'service with a smile'. Common man has now learned to link itself to the bank and bank to the needs of common man. Banks are really good service providers for people who want to save their life savings. There is a bit of lenience in services provided by the banks but after all nothing in this universe is perfect. In short, one can conclude that 'banks are the real service provider as per the needs of people in this country." Group III Third Prize Tejasi Satish Atre, Class XII Banking and Common Man I SEE A BANK EVERYDAY AND GO ON WONDERING IN MY WAY; LARGE NUMBER OF PEOPLE, WAITING PATIENTLY IN A QUEUE; ITSELF DEFINING THAT IT ADD'S TO PEOPLE'S LIFE, BEAUTIFUL HUE ; IT GIVES LOANS TO FARMERS, AND FOR EDUCATION; RELIEVING PEOPLE FROM THEIR, WORRIES AND TENSION BANK IS A BLESSING FOR MANKIND, AND BY ITS RULES WE MUST ABIDE

As a corporate social responsible citizen, banks, under the Government of India undertaking, have been serving common man since their inception and as part of their core founding principles. Banks today, epitomize a fine blend of socially and economically responsive banking. It is evident from a slew of initiatives, banks have undertaken such as providing self-employment training to rural-youth, address poor drinking water facilities and providing Medical facilities in the countryside. 1) RURAL DEVELOPMENT Various Banks have sponsored a number of self employment training institutes under schemes like "Indian Rural Development Planning (i.e. IRDP)" which provide training to rural youth as well as women. Under schemes like 'Jalayoga' the banks have started a number of projects in order to provide pure and safe drinking water facilities to the people living in rural areas. Banks also extend their support to organizations like "Society for Educational and Economical development" (SEED), working for the welfare of socially marginalized children. Banks also sponsor various social service activities like organization of blood donation camps, assisting physically and mentally challenged persons, helping poor students, honouring teachers and the best Government Schools. 2) Enterpreneurship for Woman Banks provide self-employment training to women. Various banks have started 'Mahila Banking branches as well as 'Mahila Banking divisions' which are benefiting lots of women across the country. These banks provide training to the women for their jobs thus making them skilled and confident in their work. Banks develop a sense of using money cautiously among people so that people save their excess money by depositing it in the banks and plan to use this saved money for their future. Some banks have also started some scheme for students through which the students can also have their own account in a bank and develop the habit of saving money instead of wasting it. Students also realize the importance of money with the help of banking. 3) Commitment towards Customers Banks have brought up a booklet on 'Code of commitment to customers', for the customers as well as the staff for understanding the fair code used as a standard benchmark for customers. 4) BANKING FACILITIES -

Banks provide a lot of Facilities to common man. These facilities include, housing loans, loans for vehicles, personal loans, educational loans etc. All these loans prove greatly beneficial to common man for fulfilling his basic as well as other necessary requirements. Educational loans given by the banks are a boon to students who wish to study abroad as well as in India for the courses which require much more money than the students have. Banks also provide loans to farmers for buying land or any other agricultural equipment. Apart from these, Banks provide services and credits to SC/STs. 5) Security Services For security in banks people have been provided with saving accounts, recurring accounts and fixed deposits. Modern security equipments have been introduced in the banks. Now-a-days, several banks have also started 'Internet Banking Services' and 'Anywhere Banking' services with the help of which people can get the whole information about their accounts via internet even when sitting at home. 6) Right to Information Under the 'Right to Information Act, 2005' Banks have started a new 'Right to information' outfit by which people can get the desired information and there is transparency in the banking process. 7) BANKING PROCEDURES After taking a survey of all the banking processes, simplification has been made in several procedural norms such as documentation of housing finance. Banks also keep a strict vigil to avoid any unfair practice in the bank and strictly prevent fraud. Banks are in real sense greatly benefiting and helping common man in every aspect of his life. But apart from all these facilities, Banks must also take a step forward in fulfilling their commitment of providing rural areas with the needed infrastructure and providing funds to the Government schools to have modern infrastructure and new study equipments. Banks should also assist doctors in opening new clinics in rural areas through schemes like 'Rural Clinical Services', as the people in rural areas face a difficulty of inadequate Medical Facilities as the hospitals from the villages are also at faraway distances, which creates problems during an emergency.

Although banks have started a large number of ATMs, but they must enhance the strength of their ATMs and open them at off-sites and general places like railway stations for customer convenience. Banks must also reduce the rate of interest as sometimes it becomes very difficult for a common man to cope up with the loan he has taken for fulfilling his requirements and on the top of that, to tackle with the rate of interest he has to pay. *8. Again, the facilities like 'Life Insurance Policies' are very beneficial for common people. And the 'Pension' provided to the retired people is a boon for them as with this pension as their own income they can spend life more comfortably and peacefully. Thus, Banks are in real sense SERVING TO GROW AND GROWING TO SERVE Group III Special Consolation Prize Nupur Khare, Class XII Banking and Common Man Scene 1 ( An year ago) I witness a poor illiterate farmer of Rudauli village, a remote village of U.P. at the bank. He is here to send money to his son Ram who is studying at G.K. Raisoni, Nagpur. Farmer Bholu : Saab, Mujhe apne bete ko 10,000 rupaiyya bhejna hai, ek draft banva dijiye. Kitne din lag jayenge ? (Sir, I have to sent money to my son Rs.10,000.00. Please get a draft for me. How much time will it take?) Bank Manager: Bholu bhai ! Bees din to lag jayenge (Bholu, it will take at least 20 days)

Scene 2 ( After 4 months) I saw Bholu farmer with his friend. In his hands were few brochures of a computer company. His friend works in a bank (computerized branch)

Bholu Farmer : Hamare bete ne kaha hai ki ek computer khared lo ! Ab net se hi paisa bhej dena. (My son has advised me to purchase a computer. He says that I can send money through the internet) Bholu and friend walks away after purchasing a computer. The computer is installed, but Bholu does not even know how to press a button. Scene 3 ( After 10 months) I met Bholu beaming. So I asked him compassionately. Me : Bholu bhai ! Ab to tumhe computer chalan aa gaya hoga? (Bholu, now you must be able to operate the computer?)

Bholu : Arrey, memsahib, ab to ye hal hai, ki agar aap keyboard bhi hata do, to hum mouse se chala lenge. Hum to internet bhi lagwa rahe hain. (Now, Madam, it is the situation that even if you take away the keyboard I can operate the computer with the mouse. I am getting an internet connection too.) This is Banking and Common Man Banking is the backbone of any economy. No business, trade, commerce can flourish for a long time without the aid of the banking. Banking in some or the other form has existed even in ancient times. When Jesus was against the moneychangers in the temple of Jerusalem, he was protesting against the evil practices of banking at that time. When Prophet Mohammed forbade the use of usuary, he was condemning the evil practices of the then existing bankers who sucked the last drop of blood from their helpless victims through exorbitant interest. The commercial banks are a very important institutions of finance in Indian Economy. A banking Industry is the one that accepts the deposits of money for the purpose of lending, repayable on notice and withdrawals through cheque, draft etc. Commercial Banks deal in money there by regulating the economic activities. Banks also earn margin of profit by lending these money. Banking service especially are of great importance and usage to the trading persons. The banks can be mainly classified as - Commercial Banks, Central Banks, Cooperative Banks and Specialized Banks. Commercial Banks are those which carry the banking business of accepting the deposits of money for the purpose of lending. Commercial Banks are mainly governed by the Indian Banking Regulation Act of 1949. Commercial Banks are further classified as Public Sector banks in which the govt. has the major stake and the emphasis is more on the social objectives than that of profitability. Examples of leading public sector banks

include Punjab National Bank, State Bank of India. Private Sector Banks are owned, controlled and managed by private individuals and they are free to operate as per the market forces. Examples of private sector banks include - ICICI bank, HDFC bank etc. Central Bank is the main bank of any country. It controls and regulates the working of other banks. It is also the government bank and is responsible for the credit policies of nation. The Reserve Bank of India is the Central bank in our country. Specialised bank include Exports and Imports bank, foreign exchange bank catering to the need of these specialized services. Co-operative banks are governed by the state co-operative Act. The main aim of such banks is to incultake the habit of saving among the rural people. They are the main source of rural credit and agricultural financing in our country. Functions of bank include a variety of services. Banks facilitates the remittances of funds. i.e. a person can transfer any amount of money from one place to another through the interconnectivity of the various branches of bank. It not only saves time but is also cheaper method of funds transfer. Banks also accept the deposits of money as they are both the borrowers and lenders of money. As borrowers they borrow money and as lenders lend money to the needy. Money in the banks can be deposited through saving account which restricts the number of savings as well the amount, current a/c. from which money can be withdrawn without any prior notice. Banks pay the specified rate of Interest which is decided by RBI. Public deposits are of higher interest with fixed and long period. Another function of the bank is facilitating the cheque transactions. Banks ease a lot to their customers by collecting the cheque that has been drawn on other banks. Cheque is the most common and frequently used instrument in banking. It is inexpensive medium of exchanging money. Cheques are usually of two types i) bearer cheques - which can be encashed at the bank counters immediately and ii) crossed cheques which are to be deposited in the payees account only. In addition to all these services banks also offer various allied services to the customers. For example payment of insurance premium is done by the banks on the instructions of customer which saves customer to stand in a ques and wait for hours. For nominal charges Commission, Interest etc. are all taken care by the banks. This is the situation after the nationalization of banks. Earlier the banks were simply an institution of depositing money and credit facilities serving to only a particular section of society (rich intellectuals). But with the nationalization banks have transformed their roles far from profitability to social objectives. They are helping in strengthening the economy and have become from Section Bank to Mass Bank.

At the time of Independence of our country our farmers were in a pathetic situation. As the time gestation between the sowing of a crop to the realization of money is quiet long, farmers borrow money from different resources to meet their initial needs of fertilizers, seeds and other family expenses of marriage, death and other ceremonies. Before the nationalization the sahukars and money lenders used to charge a very high rate of interest on the borrowing. Not only that they manipulated the accounts. To keep the farmers in debt trap but the situation changed after the nationalization. The NABARD was set up on an apex body to control and regulate the activities of agricultural financing. The Green Revolution was the major harbinger of such drastic changes. As a result many co-operative banks, SHGs etc. have been set up to provide the funds to the people especially to the poor people at low interest rates. Self Help Groups have emerged to fill in the gap between the earlier and present credit system. Initially there will 5000 SHGs and today it has crossed the tally of 400,000. They are a part of mini credit programmes. In SHGs the small amount is taken from each member and from the pooled money the funds are given to the needy at low rates of interest and with repayment in easy instalments. It has also empowered the women. There is a poor women bank in Tamilnadu with the name of Kutumbshree. All this financial aid has helped a lot to the farmers (common person) which in turn have resulted in the growth and prosperity of nation. Government has taken various steps to eradicate the poverty and unemployment and banks are acting as the strong pillars for the successful implementation of these. Kissan Credit Cards, PMRY etc. are only few to add this list. RRBs, DIR are some of the milestones in the path of the rural banking. At the time of independence, the contribution to GDP by banking sector was only 15 - 20 % and today this section is contributing to 57.6% to GDP according to the latest information. Banks are now serving to the common man with their full capacity. Meeting the various diverse needs of the customers through different methods, banks today seem to be such an important part of the economy without which our economy is sure to be paralysed. Today it is the era of modernization. In seconds an equipment becomes outdated. With the growth and advancement of IT Sector, the drastic changes have come in the Banking system also and the latest wave in the technologies is E-banking. E-banking or internet banking is the latest services offered by banks. E-banking means only person with a computer and internet connection can get connected to the websites of different banks and can perform the transactions. There is no

human operator to respond to the needs of the customer. They have to choose the type of services and the list of options is displayed. E-banking has probably revolutionized nearly the whole banking industry. Common public feels more safe and secure as they know that in direct contact with the banks and availability or transfer of funds to other person is available at any hour of the day. Various examples of E-banking services include ATM, EMT, ETF, POS etc. E-banking not only is helpful to the customers but also the banks. For customers it is a boon, since they are allowed to do the permitted cash transactions while travelling in plane or from the office or from the home. It also ensures the safety of funds and the customers are saved from the risk of taking cash with them. Now it is the era of plastic money. From the traditional 'Chandi' coins to plastic money itself describes about the advancement of technology. From all the above discussion one thing is for very sure that banks are for the common man and will be for the common man. What is a common man most interest in banks? His funds should be safe and secure. He should be able to transfer and remit it easily, speedier and with low transaction cost. He should be able to operate from any place and any hour of the day. So this is what the banks today are doing. Banking services are diverse in the nature as they are serving the multifaceted needs of the customers, from a simple deposit of money to the transfer of money across the world. So this is the banking today and not only this for helping the customers banks have come up with very nice policies. Take the customer charter policy for example. It estimates the time in which the particular function of the bank can be performed, however, it does not ensure the quality of the services. In case of any grievances of the customer due to the deficiency in the services rendered by bank, the person can contact Bank Ombudsman within the period of two months and he shall get redressed for them. Mainly deficiencies of the banking services include late payment of cheques, drafts or their non-payment etc. A committee at the Reserve Bank has also advocated the Clean Note Policy of RBI by it. RBI ensures to maintain the good quality of notes to the common public. There are exchange counters in nearly every bank from where soiled and torn notes can be exchanged for new ones. So banks has move from profitability to social objectives, section bank to people bank and from the rip to the backbone of the economy. By the time, I am writing this, Bholu farmer may be in conversation with his son on mobile phone at his farm house.

Scene 1 ( today) Bholu Farmer : Beta, maine bank phone karke 20,000 rupiya tumhare khate mein bhijva diya hai. Jara pata kar ke batao ki pahunche ki nahin ? (Son, I have made a call at my bank and had transferred Rs.20,000 to youre account. Please check and inform me.) (Ten minutes later Ram calls from Nagpur -) Ram : Pitajee, paise pahunch gaya hai. Aap nischint rahiyega. (Father, I have received the money. You please be relaxed)

Banking Transactions have today become speedier, safer, low cost (cheaper) and facilitates the common man to access to banking from Any Where and at any Time. Group III Consolation Prize Akshay Rathi, Class XI Common Man and Bank A Bank is a commercial or a state owned institution which provides financial services such as issuing various forms of money, keeping money as deposits, rendering money as loan to enterprises and individuals and processing financial transactions. Banking service is unique in sense that the diverse human needs is multi facet and thus benchmarking purpose cannot be done. The banking sector started in the first decade of the 18th century when the General Bank of India came into existence in 1786. The State Bank of India is the oldest bank in the country. The Reserve Bank of India was formed in 1935 for regulating Indian banking sector. The RBI was formed by recommendations of the Hilton Young Commission which gave its report in 1926. In 1948, RBI was nationalized. By 1960, India's banking sector had grown to an extent that it became a tool for facilitating the development of Indian economy. The Government of India under leadership of then Prime Minister Mrs. Indira Gandhi took the decision and nationalized 14 largest commercial banks with effect from July 19, 1969. In 1980, 6 more commercial banks were nationalized. In 1990's Narismha Rao govt. embarked on policy of liberalization and gave licenses to start new banks and new banks developed which were called "New Tech Savey Banks". Some banks such as HDFC, ICICI bank developed due to thus. Thus this along with rapid economic

growth kickoffed development of banking sector in India which led to a retail boom. Presently India has 88 commercial banks, 29 private banks, 31 foreign banks and 28 state owned banks. There are different types of banking such as retail banking, business banking, corporate banking and investment banking. A bank raises funds through attracting depositors, borrowing money from inter bank market and raising money instruments. We recognize those days when we had to wait for 20-30 minutes to get cash withdraw, 2 days to get cheque book, 4 hours to get bank overdraft, 1 week for local clearing, 4-6 week for outstation clearing, face the bank staff who was reluctant to update pass books. But today situation has changed drastically. With a flick of ATM card we get cash, if bank has phone service, we can get cheque books delivered and cheques collection at doorstep. It now takes 3 days to get local clearing and 5 days for outstation clearing. Since 1969, when banks were nationalized, banks have contributed immensely towards development. It is now easier to get educational loans, so children can pursue higher education even in abroad, banks provide loans for education at low interest rate, now children's education is not a burden on parents. Similarly banks provide loan at low interest rate for home loans, car loans, personal loans, consumer loans, business loans, writing capital loans. Few years back building house was a matter of dream for everybody but now one can get a loan easily and fulfill his dream. Bank also provides loans for business activities, for starting new business, so that continued expansion of business can be ensured. Bank also provides loan against export contract. For import contracts, too if there is not sufficient capital, banks provides loan. The 2nd sector of banking is the money it accepts as deposits, on which it pay interest. There are different types of deposits like fixed term deposits, recurring deposits. In recurring deposits you are required to pay fixed money for certain period and after certain period you get a lumbersome money back. Current Account deposit is also another type wherein you deposit whole amount in bank and make payment to people as and when required. Bank also provides credit cards, using this we can purchase things, do shopping there is no need to carry money first we have to deposit some money in bank for which it gives credit cards. Nowadays pension account deposit is also there where in bank collects pensions and gives to us as and when required. It also provides locker system wherein we can keep all our jewellery, gold and silver items safely. There is a protection from bank, all we have to do is to pay some money for this purpose. Banks also have their ATM wherein we can get cash readily as we flick our credit card.

Bank is nowadays acting as a role of Insurance agent. We can make payment by cheques from one city to another city once the local clearing is done and we need not pay the commission to bank. This facility is called multiple cheque facility. Bank also provides loan to unemployed to help them start a new business or get a service. Bank provides loan to senior citizens at low interests rate and to deposit of senior citizens it gives them high interest rates. RBI formed in 1935 has about 22 regional offices in India It is the main banking authority in India which regulates banking sector. It's functions and objectives as a) Monetary policy - It prepares, controls, regulate monetary policy, b) It controls price-rise c) It regulates and supervises financial system, d) It ensures that adequate credit flow is there to the productive sector, e) it provides loans to government, f) It decides the money control and money fllow g) After every 6 months RBI decides new credit policy in which it decides the interests on loans and deposits, h) It ensures development of all through it's policies. It frames all policies for banking sector. Through Prime Minister Rojgar Yojna & Prime Minister Shahari Vikas Yojna and other schemes bank provides a loan of Rs. 100,000 to employed people. If a company's current account deposit is there in bank, all salaries and wages can be paid through it. All tax payments can be done through bank. Some bank also collects payment of electricity bill etc. A bank generates profit as difference between that of the level of interest paid by bank on deposits and other sources funds and the interest it collects as interests allowed on loan and other rendering of services. This is referred to as the spread between cost. Government owned banks or state owned banks have 75% of total assets of all banks, commercial and private banks have 18% of assets and foreign banks have 7% of total assets of all banking sector in India. The banks also provides loans to government for carrying out various welfare programmes. Banks nowadays can collect payments from customer on our behalf. Due to globalization there is a stiff competition between banks as to who can have maximum customers. The Reserve Bank of India has set up a committee called "Committee for Procedures and Performance Audit of Banking Services" under Shri S.S. Tarapore former governor of RBI to see on how banks can provide better services to consumer and common man. Bank is an indispensable tool for the growth of our country. Banking sector which accounts for most of the tertiary sector together contributes 48% of national income. No person can neglect and deny the importance of bank in developing the

country and achieving high rate of economic growth. The RBI is still trying to achieve high efficiency and better infrastructure of banking sector so as to enhance it's utility to different consumers. In era of 21st century Bank have to play an important and central role in shaping the future of the country. Group III Consolation Prize Pawan Sarda, Class XII Banking and The Common Man In today's modern business environment, it is difficult for the entrepreneurs to generate funds by themselves. There is a need for some institutional framework which provides money to the business house for investment. Banks are the institutions which cater to this need. In addition to providing money, banks also ensure safety of people's fund in the form of deposits, maintaining their liquidity and providing it back whenever desired. The common man, today, relies on the banks to fulfill a variety of his needs. History of Banking Banking has its origin right back to the Vedic periods. The system and working of the banks has evolved over the years. Lending money and financing was perhaps replaced by banking in the times of Manu, the Hindu writer, when he mentioned about the various rates of interest in his works. In the Mughal period indigenous financing houses worked well in the matter of financing, foreign trade and commerce and mobilizing of funds. The East India Company in India set up three banks in the first half of the nineteenth century, namely, Bank of Bengal, Bank of Bombay and Bank of Madras which were also called as Presidency Banks. These three banks were merged in the year 1921 to form The Imperial Bank of India. The Reserve Bank of India came into existence after the RBI Act 1935 was passed. The State bank of India took over the Imperial Bank after the passing of the SBI Act 1955. In the Swadeshi Movement, many banks with Indian Management emerged like Punjab National Bank, Bank of Baroda, etc. In 1969, 14 banks were nationalized to serve various purposes. In April 1980, the government took over 6 private sector banks, to make it to a tally of 19 nationalised banks (two of them merged later) Types of Banks Banks in India belong to the following sectors i) Public Sector Banks - Banks like the State Bank of India, Regional Rural Banks and 19 Nationalised Banks constitute public sector banks.

ii) Private Sector Banks - Private owned banks or foreign banks belong to private sector e.g., Axis Bank iii) Some banks are co-operative banks, catering mainly to the needs of villages and specific sectors iv) Development Banks - Many developmental banks like NABARD, ICICI, IDBI (Industrial Development Bank of India) etc. have been set up for promoting development in various fields. Functions of the Bank A) Primary Functions 1) Accepting deposits - The primary functions of the bank is to accept the money from the people and deposit it in their account. It can be done in the form of fixed deposits, savings deposit, recurring deposit or current deposit. banks provide interest on the deposits according to the length of the duration. This ensures safety of the public's funds as they need not bear the risk of keeping their earnings with themselves. They keep getting interest on heir savings. So banks mobilize the savings of the people. The depositors can withdraw money as per his / her requirement. 2. Lending Money - Banks perform this second important function of lending funds to the interested users / borrowers in the form of cash credit, discounting of bills of exchange, overdrafts, demand payments etc. They charge interest on the money borrowed by the people according to the purpose of its use. Thus banks serve as bridge between sowers and investors and lend the money when it is put to the right use. B) Secondary Functions 1) Agency Function i) Payments - Banks perform various agency functions on behalf of the customers like payment of insurance premium and other bills directly to the creditors. ii) Receipts - Banks on order of customers, directly collects cheques, bills and money from debtors and deposits it into the account of the customers. iii) Underwriting - banks sometimes undertakes underwriting of shares. iv) Sale and Purchase of Securities - Banks enters into various transactions for the customers because of its vast expertise in the field of finance.

v) Remittance of money - Banks easily remit the money of the customers to other places as per their requirements. vi) Foreign transactions - In other parts of the world too, banks provide the funds to the customers, if they require, thus ensuring the safety aspects. 2. General Utility Services i) Safety Lockers - Bank provides safety lockers where valuable can be stored by the customers in the safety vaults. ii) Transportation - Businessmen when they send consignments, ask the consignee to pay at the bank, get the receipt and then the delivery of goods. iii) Financial Project Reports and information on financial developments iv) Economic Surveys - Banks conduct economic surveys and publish statistics to know the level of economic activities in operation. v) Issuing traveller's cheque, letters of reference for the consumers. ROLE OF BANKS IN ECONOMIC DEVELOPMENT AND THEIR SOCIAL CONTRIBUTION As we have seen banks provide a large array of functions and are responsible for a number of monetary and non-monetary transactions. We will now have a look into their social side and influence on the life of the common men. 1. Capital Formation Since banks do not let the earnings of the savers rest idle, they act as a link between owners and the investors and provide adequate funds to the investors, to assist in capital formation. Thus they promote production, supply and boost the overall economy. 2. Innovations Since they provide required capital to the producers, producers tend to make new innovations and thus the common men is benefited. 3. Increase the demand By providing credit facilities banks increase the aggregate demand in the economy, which leads to fuller employment of resources and more productivity.

4. Monetary Policy Banks are a tool to the monetary policy of the government. They change their policies in accordance with the policy of the government. 5. Investment - Friendly Interest rate Banks charge quite low rate of interest on amount borrowed for investment purposes. 6. New class of entrepreneurs Banks encourage the common men to borrow money and start entrepreneurship, thus leading to more economic activity. 7. Rural development By providing loans and making investments in the rural areas, banks help in overall balanced development of the nation. All kinds of people are at an advantage. 8. Priority sectors Banks charge minimal rate of interest on loans for agriculture, small scale industries thus ensuring balanced economic growth and availability of money to the poor. 9. Employment Generation Banks provide special schemes and loans for self employment and encourage the unemployed people. Thus, we can observe that banks are not merely the institutions for depositing or borrowing money but also serve as the life-blood of economic activities. They are essential to the development of society and for every common man as well. The number of branches of banks is today more that 68,500 throughout the nation. In 2005, there was on bank per a population of 16,000 as compared to the ratio of the bank per 55,000 people in 1969. The percentage of bank credit to the priority sector has gone upto 40% in 2005 of the total credit given. Thus banks are playing a major role in bringing sectoral balance in the economy. Unlike the low percentage of banks in rural India in 1969, it is almost 50% in the year 2005. Banking thus bring regional balance as 75% of population lives in the villages. Amount of depositing has increased from somewhere about Rs.4,50,000 crore in 1969 to Rs.17,50,000 crores in 2005. Also the amount of lending by the banks has

increased from around Rs.3,50,000 crores in 1969 to Rs.11,00,000 crores in 2005. Hence, it is evident that banking in India is growing at a rapid rate and providing lot of facilities to the common man. MODERNISATION In this new era, banks have become modernized in various aspects. They continue to improve significantly. 1. Personalised services Banks have started providing personalized services according to the exact queries and requirements of the consumers. Consumers are paid special attention by the banks. 2. Computerisation of works i) e-banking - Online banking or electronic banking is a new option available to consumers who can access their accounts via internet and make transfers or payments electronically. This concept of anywhere banking has made life very easy for the consumers who can make payments and deposits at a click of the mouse. ii) ATM - Automated Teller Machines have become common in many parts of the nation. People can draw cash from their accounts in the bank from the 24 hours working ATMs spread across the length and breadth of the nation. iii) Debit and Credit Cards - Debit and credit cards have again added to the convenience of the customers, who can make payments using these at a reasonable rate of interest. This has reduced the element of risk involved in carrying cash to all places. 3. Diversification Banks have diversified their field of activity into newer arenas. i) Mutual Fund Investments - As the banks have expertise in financials matters, they make mutual fund investments on behalf of customers, if ordered to do so. ii) Housing - Banks also provide housing loans to the needy. iii) Education - Special schemes for education related loans are provided by the banks. These loans are at a reasonable interest rate. SCOPE FOR IMPROVEMENT Banks in India still need to improve a lot. Their absolute number is not enough. There is a need for increasing the profitability of these banks. There are problems of bad debts etc. services quality requires to be improved. Many states need more

banks ( e.g. North-East Indian States) Banking can improve a long way if dealt with properly. CONCLUSION The RBI and the commercial banks of India play a very significant role in economic growth and development of the nation. They implement monetary policies of the government, curb price rise, increase productivity by higher capital formation increase the aggregate demand and help in social development as well. Banking has become a way of life for the common man. It depends upon the bank to perform multitude of tasks on his behalf. Its economic life is governed by the banks. On the other hand the banks are also dependent on the common man because it is for him only that they function and derive profits from. The inter relationship between the bank and the common man is inevitable. It would not be wrong to say that the success of the common man depends upon the bank and that of the bank depends upon the common man to a large extent. Banks have raised the standard of living of the common man. In short, life has become much more easy than it would have been in the absence of banks.
Group II IInd Prize Rup Kumar V., Class X

BANKING AND COMMON MAN

A BANK is a financial institution which provides us financial services like issuing money, saving deposits, issuing checks, giving credit card, debit cards, etc. A commercial bank is one which provides financial assistance by issuing checks, and depositing money. Some banks even provide some other benefits like providing their customers with safety lockers to store their valuables. A Bank works in a very systematic way. The customers of the bank deposit their money in their specific accounts and then bank utilizes this money for providing money as loan to business and individuals. But the bank can not use or spend all the money by giving loans, they have to keep a specific amount as reserve in the customers account so as to repay them when they want. This is called fractional reserve. It is controlled by the central bank of the country. A bank plays a lot of functions in itself:(i) A bank has to look after the customer by issuing checks or checking their account. (ii) It has to provide loans to individuals and business. (iii) It has to repay the money deposited by individuals and business. (iv) It has to provide ATM Cards, Debit Cards, Credit Cards etc. (v) It provides customers, safety lockers on rental basis to store their valuables. (vi) Cashing cheques to the customers in order to maintain the flow of money. (vii) Transferring cheques and cash through wire transfer or cable transfer. A bank has various ways of performing its functions. (i) A Main Office or a branch is a place where the bank or the financial institution provides its customers with a wide array of face to face financial services. (ii) An ATM Machine is a machine which accepts cheques and deposits the money in the account or provides money to the customers when they need it without any human clerk. (iii) A Mail a system in which money or other matter is sent through packages all around the world. (iv) Telebanking is a system in which some banks or financial institutions provide their customers the facility of performing transaction through telephones. (v) E-Banking or E-mail banking is a system in which some banks or financial institutions provide their customers the facility of performing transaction through Internet or when connected to Internet. Banks are classified into two types. Private Banks and Government Banks. The private banks are mostly profit motive. Commercial banks, Investment Banks, Capital Banks, Business Banks, Financial Banks etc. come under private.

A Central Bank is usually a government banks. It is neither profit non loss motive. It provides money to the banks and also sees that the banks are not earning profits by utilising this money by giving loans. It also keeps a check on fractional cash reserve ratio. The word "BANK" is derived from the Italian word "banco" a desk used in the period of Renassave by Florentine banks which was covered by green table cloth. A commercial bank is one which not only provides loans but also accepts deposits. These are some financial institutions which work without working under the definition of a bank. The main purpose of a bank is to provide loan to business so that they can buy the inventory and later repay the loan in time with interest. Due to the increasing industrialization the role of banks in the economy has increased. A bank has to control inflation by decreasing the purchasing power of man by providing less loans or increasing the rate of interest so as to discourage people from taking loans. It also has to provide money back to the investors who invest in their banks. It also has to provide safety to the valuables of the customers which are stored in the safety lockers. In such, banks play a vital role in the economys development. There are various types of banks which do various function. (i) Commercial Bank A commercial bank not only provides loans but also accepts deposits from the customers. (ii) Investment Banks:- Investment banks are those that which allow customers to invest on their banks. (iii) Business Banks Business Banks are those banks which not only provide loans from business but also provide them with assistance of their business. iv) Capital Banks - Capitals banks provide money or capital for building of new industries. There are many banks such as retail banks, off shore banks, mutual funds banks, Islamic Banks etc. In an Islamic Bank the bank has to follow the Islamic Principles in every aspect. Banks also face various risks like liquidation, money crisis, short of deposits etc. Banks overcome all this risks to provide men with what he wants money. In this in todays world, I strongly believe that banking has helped the common man in every aspect. Today we find a ATM in every nook and corner of the counter. Today every individual has his own bank account in one or the other bank. Every person has his own credit card or a debit card which has increased the purchasing power of the man. Banks have given man a source of income as they employ a lot of people. So I strongly recommend the importance of bank in todays world.

Group II III Prize Simran Jain, Class IX

BANKING AND COMMON MAN

Right from "But remember that if you are not able to pay your debts, you will have to work on my farmland till you have paid me fully." To the latest, "Taking loans from our bank is like borrowing money from a friend." The profession of banking has indeed come a long way. Over the years, the society has seen several phases of banking and each phase proved to be better than the previous one. Be it the Zamindars of the promising modern banks, the profession has contributed significantly to our economy. The nationalization of banks proved to be a boon for the common man. The money lenders could no longer drag in personal differences and alter the rates of interest depending upon the person whom they are lending. People now had an option to go to the nationalized banks where the organisation was uniform for everyone. It is also fair and appropriate for its customers. With the rise of co-operative banks, the farmers, in particular have been benefited. They could now practice co-operative farming which has helped them to a great extent. These banks finance the farming activities and have raised the economy of our rural society. The basic idea of a bank is usually that of a place were the security of our money becomes the responsibility of the bank owner. May be this is because the basic characteristic of all banks is deposition. People prefer depositing money in banks so that they can have a good nights sleep. They are also happy to have heavier pockets when they withdraw their money from the banks. The various investment policies, specialized for different economic sectors, enable people in any field of jobs to take optimum benefits of these. The facilities of simple interest, compound interest, fixed deposits and so on, attract customers to deposit money in banks. Another interesting characteristic of banks is that of providing various types of loans. This facility has encouraged especially the youth to begin an individual enterprise. It has helped arouse the entrepreneur that many of the youngsters lose due to lack of monetary health. Now, with the introduction of home loans, even an average, middle-class person can dream of his own home, and even the other luxuries. Talking of the latest developments, calls for a mention of education loans. These loans have helped many young individuals by financing their higher education. This has helped many to explore their potential in their field of interest. Banks have also facilitated the shift from paper money to plastic money. It is true that today a persons financial health is recognised by the number of credit cards he possesses. Credit Cards have reduced the risk of robbery significantly . People can travel without cash if they have any credit cards. Even the ATM Cards and ATM centres found in every locality, have facilitated instant access to money. Banking has been a great success at the International level, too. The World Bank and the International Monetary Fund, both of which are organs of the United Nations, lend money to the countries in need. These organisations have improved the economy of several countries by directing their economic policies. Banks have also made transfer of money possible, within the country and even overseas. Without the transfer of Demand Drafts, a person can now transfer money from his account to someone elses account, easily, within hours. In our country, the Reserve Bank of India supervises the working and organisation of all other banks. This idea, ensures tighter security and that the banks will follow basic rules and regulations. The Reserve Bank of India is among the oldest banks, established in 1935 and was nationalized in 1949. Ever since, it has ensured the proper functioning of the banking world in India. The profession of banking has supported the economy of our country and will surely continue, with better ideas. It is continuously progressing, branching out newer facilities and is laden with fruits of success. The profession of banking is a vital step in the ladder that will take this developing country to the heights of glory and will probably convert India into a developed nation.

Group II Consolation Prize Amey Ravindra Deshkar, Class X

BANKING AND COMMON MAN

The role of Banking in India is very significant. It has thoroughly changed the situation in modern Indian. The word banking nowadays, is used in a wider concept. Once there was a time, when the people, save their money and deposit it, in the bank, and whenever necessary according to their demands they take it out. It was just use for this purpose only. Nowadays there are many banks. But, Reserve Bank of India (RBI) is the Central Bank of India. According to the act of Government of India, the Reserve Bank was established on April 01, 1935 and was nationalized on January 1, 1949. So, at that time there was only one nationalized bank of India. But then a dynamite lady politician Indira Gandhi, encourage the nationalism. Hence more and more banks become nationalized and this led to the development of India. Banking has become a primary and important source for the development of India i.e. for the welfare of the common man. In modern times, banks provide loans to the common man, for various purposes. Household loans for enabling the individuals for building houses. Educational loans for the education of the children. There are many types of occupational loans also. Banks give this loans to the entrepreneurs. They also give financial assistance to the businessmen. This encourages more and more investment in the banks. The common man is also now investing at a large scale in the banks. The SBI is the largest bank of India. It has 9000 branches all over India. 30% of the total business shares of the country is invested in these banks. The RBI is a Central Bank of India. It is one and only one supreme authority for the minting and establishment of the currency notes. The RBI naturally deals with the foreign trade. To implement the developing schemes all over India, there are many banks working under the Reserve Bank of India These banks try to provide the fruits of the developing economy, to the common man of India. It encourages many business activities and this leads to the betterment and progressing of India. The National Agriculture and Rural Development Bank (NABARD) has been set in 1982, with a view to provide agriculture loans to the farmers. This has been done to increase the production of agriculture, and also to make the formers, self sufficient and self reliant. It has increase the tune of agriculture loans to Rs. 26,571 crores. Its main objectives are to increase the food production and to encourage the agriculture amongst this new generation. The Industrial development of banking in India (IDBI) works for the betterment of industries in rural and urban areas. It gives loans to the entrepreneurs with less interest. It encourages trade in the rural areas,. It also encourages the common man to make investments so that they can make useful schemes for the development of the nation. The Import Export bank in India has also helped the country to progress. It has make the country more powerful by bringing latest and hi-tech technologies to India. That is why the production of various commodities in India is now started in India. India is now becoming self-sufficient in basic commodities of the common man. There are also many specially orientated banks, for senior citizens which gives pensions to them, so that they can start a small scale industry for facilitating their life to live peaceful. Many banks are providing loans for education, free of cost for the children who are unable to bear the education because they come from a poor family, or may be some of them are without their parents. These banks take up the responsibility of educating the child until he became a full fledged or an able person, to continue his study and education by himself. The industries and factories in India are now beginning to encourage and to promote the foreign style of trade. Some years ago the Indian Traders mostly observe profits, rather than investments. Whereas the foreign traders do not think of profit straightway, they only think of a good investment. Banking is thus very essential, for the development of a nation. But banking cannot attain this objective until the common man is fearless about the investment in the bank. He needs to be assured that his money is going to, benefit both his country and himself. For this, it needs more and more exposure to investment. Thus banks are trying to attract, common man to them by announcing some schemes which is enough to attract the people. Developments of a country need banking banking needs investment and investment needs the active participation of the common man. The common man is also assured that he can take money any times with the help of ATMs in case of any emergency. This conveys the idea that common man is indeed a crucial factor, for the development of his country. For an economic development it needs good investment, realistic ideas and proper implementation. Thus, banking and common man both should work in a systematic way for our country to become a developed economy.

Group II Consolation Prize Shobhan Roy, Class IX

"BANKING AND COMMON MAN"

India has been in the process of rapid change since economic liberalization started in July 1991. There is a great step in its development as the country has discovered a new confidence in itself and become more outward looking. An effect of all these can be visualized in the banking sector. Banking is a facility provided to the masses. Banking depends entirely on public confidence in the systems soundness; no bank could pay all its depositors should they simultaneously demand cash. I have hereby tried to display the experience of using the several facilities of banking, from the perspective of common man. Banks were first nationalized in India in 1969 by Indira Gandhi. Currently, there are a total of 31 nationalized banks at present in India. Nationalised banks are undoubtedly more dependable and trustworthy as far as common citizens are concerned. Private Banks, unlike those nationalized, are often found to be economically unstable and resultantly, their depositors and investors may suffer great losses. Hence the benefit of common man lies in the nationalization of all the banks. The country will prosper in its economy only through the stabilization of banks and allied sectors. We are all aware of the basis uses and benefits of banking. We deposit our money in banks because we may not provide optimum security to our money at home. Banks not only secure our money but they also hold themselves responsible for our money in case of theft, burglary, etc.

Another benefit of the same is that we get interest on the money we deposit. Apart from these, banks also offer the facility to secure our ornaments and other valuables in their lockers Besides these facilities, modern banks are diversifying their activities and extending their facilities towards the common man. People can approach banks and transact their business. Earlier it was not possible for businessmen to afford to support their entire enterprise from their own capital. Now, banks provide them with loans to meet their requirement of capital. This has ultimately resulted in the development of the countrys economic status. Not many years ago, transaction of money had become quite troublesome until credit cards were introduced in 2000. This has proved to be a landmark in banking facility. No wonder credit cards are so prevalent among the masses, considering their ease of use. Through these credit cards, banks have actually provided freedom to their customers to enjoy life to the fullest at any time. Yet another facility provided recently in Automated Teller Machine, commonly known as ATM. These ATMs save us the trouble of carrying cash money along with us with much risk of theft or other mishap. Nowadays, not only do banks provide their own ATMs at every nook and corner of city but they also provide the facility of accessing our accounts in some other bank through an ATM of a different bank, in exchange of some service charge. As if these were not enough that on when ATMs have also been started. The not so young citizens of the country, who have retired from their jobs, are especially grateful to banks since they receive their pension safely through these banks. Terms like "Anywhere Banking" and "Internet Banking" have added to the comforts of accessing our accounts. Connectivity among banks is exactly what the common man has always looked forward to. From the comforts of our homes, we can book railway and flight tickets, access our bank accounts and shop on the net - thanks to internet banking and credit and debit cards. Banks also provide loans Loans such as home loan, car loan etc. provide money at times of need. This facility is particularly for middle and lower class people who can not afford to pay large sums at a time. Education Loan is a more significant feature for it allows parent of especially poor families to give full education to their children so that they can get a foothold in the much changing world of today. Banks have immensely contributed in rural development. Loan products like Artisan Card, Kisan Card, Kisan Bike Scheme, Yuva Kisan Vidhya Nidhi Yojna, etc. are available to meet diverse credit needs of farmers. Banks have set up their branches in remote for flung villages, much to the joy of the people there. Rural people are allowed to open accounts and deposit money on daily basis. Upliftment of the poor and downtrodden is done through government sponsored schemes. With such facilities, the rural sector can rightfully owe its development to the various schemes provided by the banks. Banking is of immense use to public but we can not exactly say that it does not have any drawbacks. One such drawback is obviously, corruption. I would like to share some personal experiences, to support the above context. My neighbour has been using internet banking ever since the facility came into use. But strangely, one day he himself warned us of using the same. He reported that somehow, while using the facility, his account number and other details were registered by someone who later started drawing money from his account. He had to freeze his account immediately when it came to his notice. Some other acquaintance also reported of a similar situation. One evening when using an ATM, his ATM card got stuck in the machine, somehow. The guard, who was told about it, promised to retrieve the card and hand it over to him the next day. But the person had to make a complaint and freeze his account when the guard denied to recall anything about the ATM Card. Hence, to provide maximum benefit of the facilities, banks should see that people dont experience such cases. Moreover, ATM machines should be checked regularly so that they function properly. Recently a bank cashier was there is the news for being found of illegally drawing bank money into his own account. Such corruption is being reduced but has not totally ended. A newspaper article dated 23rd August stated that several banks had been getting away by only sanctioning loans but did not provide a copy of the loan agreement to the borrower. The RBI had made a norm regarding this but the banks had been flouting the norm and giving the loan agreement only on request. Such facts compel the common people to divert their views on such issues towards a more negative view. Another aspect in which common man would like banks to morphise is the interest provided on the deposited money. The interest is so low that majority of people are opting for investing money in the share market, they often have to suffer great losses too. The other people who are either not much literate or abstain from taking risk, entirely depend on banks for investing their money. Banks should thus increase their rate of interest. Despite these drawbacks, banking is a boon to the common man. While majority enjoy the facilities of banking, those people on whom such tragedies befall, are the ones who long for an improved system of banking. Nevertheless, we can not claim that we can spend our life without banking facilities. All these aspects have embedded themselves in our life and are part of our everyday life. Group III First Prize Vineeta Soni, Class IX

Banking and Common Man

'BANK' as per the Oxford Dictionary means 'a public place' where money can be deposited, withdrawn or borrowed. Truly, bank is a place where a person can keep his savings and live peacefully and withdraw it as and when required. Banks to facilitate the needs of people have different types of facilities like depositing money in the bank, borrowing money in the form of loan, overdraft facilities etc. 2. Banking originated in the 18th Century in India with the opening of 'General Bank of India' in 1708. The oldest bank in existence is the 'State Bank of India' which was established as 'Bank of Bengal' in Calcutta. The first Indian owned bank was the 'Allahabad Bank'. The Reserve Bank of India' came into existence in 1935. After the Independence, the Reserve Bank of India was nationalized and it was owned by the Government of India. In 1949 an act was passed which enabled the Reserve Bank of India to look into the services provided by other banks. 3. In todays era, bank has become as important as the other basic necessities of life. As Bernar said "Those who are rich, they think love is most important but a common man knows its money". Truly, money has become necessary in todays world. So a common man to save his money, deposits into the bank and lives a relaxed life. Bank provides different types of facilities. Not only money, one can keep even precious articles, such as gold Jewellery etc. safe in banks. Banks provides lockers for such articles. To save money, one can open a saving account or a fixed deposits. Bank provides interest on the money which encourages people to keep their life savings safe in banks. Looking at the increasing and changing needs of the people, banks have also started providing additional facilities like loans - educational loans, home loans, agriculture loans, vehicle loans, business loans etc., overdraft facilities, Mutual funds etc. Every now and then schemes and plans are introduced to encourage people to invest in their banks. It also provides pension for old people.

4. Gone are those days when people had to wait in queues for 20-30 minutes to withdraw cash, 2-4 days to get their cheques cleared, 1- 2 days for demand drafts to be made to wait for long hours for their pass books to be taken by reluctant bankers. With fast needs of people, their growing demands, and provate banks like ICICI, HDFC etc. are coming up. The Government banks have also started providing better facilities to their people. Now the services rendered by them are comparatively faster than before. With changes in technology, advanced facilities are also provided to its customers. Now at a flick of card you can withdraw your cash from ATM. Internet banking that is e-banking and mobile banking have also come up. If your bank provides Mobile / phone banking you can even get your cheques delivered at your door step. Debit cards and Credit cards have also made out lives quite easy. Now we don't have tension of carrying too much Money with us. Just a small card serves the purposes. E-banking can help you to deposit or withdraw your money in which ever part of the world you are. ATM provides you cash at any day or any hour of the year. With the use of computers and electronic gadgets any problem regarding money can be solved for a common man by banks easily.

"Every Coin has two sides"

Similarly, some services provided by the bank should also be improved, Even today, in some banks the customers are not being properly attended and they are treated as if they are being obliged. Even today, there are delayed payment of cheques, late demand drafts, inconvenience in withdrawing cash etc. Every now and then, customers are disturbed by the banks by calling them and informing about the new schemes and plans which annoy the customers. If a person from other city, gets settled in another city, while opening a saving account needs to give a verification address of the previous city. Thus for clearing of verification, bank takes over a month which causes a lot of inconvenience. Even for old people, getting pension requires a long procedure and the inconvenience caused to them is often troublesome.

"Mon ey is th e sixth sense without which the other five cannot be used"
The increased need of money and poverty prevailing in India and the increased 'Man's greed' also forces a man to commit crimes such as theft. Thefts in bank have become a very common aspect. Hacking has become very popular. A person good at hacking (that is- a hacker) often hacks the account of other people and transfer all the money into his account. This has now-a-days become a very serious problems, threatened by which a person sometimes hesitate to deposit his money into the bank. 5. To end up with, in a nutshell, banking is a service rendered with an object to help common man. It has become a basic necessity in the life of common man. Banks previously were concerned with withdrawing, borrowing or depositing money but as per the needs of people it has altered itself and no wit provides every help related in terms of money. The common parlance followed by bank is 'service with a smile'. Common man has now learned to link itself to the bank and bank to the needs of common man. Banks are really good service providers for people who want to save their life savings. There is a bit of lenience in services provided by the banks but after all nothing in this universe is perfect. In short, one can conclude that 'banks are the real service provider as per the needs of people in this country."

Group III Third Prize Tejasi Satish Atre, Class XII

Banking and Common Man

I SEE A BANK EVERYDAY AND GO ON WONDERING IN MY WAY; LARGE NUMBER OF PEOPLE, WAITING PATIENTLY IN A QUEUE; ITSELF DEFINING THAT IT ADD'S TO PEOPLE'S LIFE, BEAUTIFUL HUE ; IT GIVES LOANS TO FARMERS, AND FOR EDUCATION; RELIEVING PEOPLE FROM THEIR, WORRIES AND TENSION BANK IS A BLESSING FOR MANKIND, AND BY ITS RULES WE MUST ABIDE As a corporate social responsible citizen, banks, under the Government of India undertaking, have been serving common man since their inception and as part of their core founding principles. Banks today, epitomize a fine blend of socially and economically responsive banking. It is evident from a slew of initiatives, banks have undertaken such as providing self-employment training to rural-youth, address poor drinking water facilities and providing Medical facilities in the countryside.

1) RURAL DEVELOPMENT
Various Banks have sponsored a number of self employment training institutes under schemes like "Indian Rural Development Planning (i.e. IRDP)" which provide training to rural youth as well as women. Under schemes like 'Jalayoga' the banks have started a number of projects in order to provide pure and safe drinking water facilities to the people living in rural areas. Banks also extend their support to organizations like "Society for Educational and Economical development" (SEED), working for the welfare of socially marginalized children. Banks also sponsor various social service activities like organization of blood donation camps, assisting physically and mentally challenged persons, helping poor students, honouring teachers and the best Government Schools.

2) Enterpren eurship for Woman Banks provide self-employment training to women. Various banks have started 'Mahila Banking branches as well as 'Mahila Banking divisions' which are benefiting lots of women across the country. These banks provide training to the women for their jobs thus making them skilled and confident in their work. Banks develop a sense of using money cautiously among people so that people save their excess money by depositing it in the banks and plan to use this saved money for their future. Some banks have also started some scheme for students through which the students can also have their own account in a bank and develop the habit of saving money instead of wasting it. Students also realize the importance of money with the help of banking.

3) Commitment towards Customers Banks have brought up a booklet on 'Code of commitment to customers', for the customers as well as the staff for understanding the fair code used as a standard benchmark for customers.

4) BANKING FACILITIES -

Banks provide a lot of Facilities to common man. These facilities include, housing loans, loans for vehicles, personal loans, educational loans etc. All these loans prove greatly beneficial to common man for fulfilling his basic as well as other necessary requirements. Educational loans given by the banks are a boon to students who wish to study abroad as well as in India for the courses which require much more money than the students have. Banks also provide loans to farmers for buying land or any other agricultural equipment. Apart from these, Banks provide services and credits to SC/STs.

5) Security Services For security in banks people have been provided with saving accounts, recurring accounts and fixed deposits. Modern security equipments have been introduced in the banks. Now-a-days, several banks have also started 'Internet Banking Services' and 'Anywhere Banking' services with the help of which people can get the whole information about their accounts via internet even when sitting at home.

6) Right to Information Under the 'Right to Information Act, 2005' Banks have started a new 'Right to information' outfit by which people can get the desired information and there is transparency in the banking process.

7) BANKING PROCEDURES After taking a survey of all the banking processes, simplification has been made in several procedural norms such as documentation of housing finance. Banks also keep a strict vigil to avoid any unfair practice in the bank and strictly prevent fraud. Banks are in real sense greatly benefiting and helping common man in every aspect of his life. But apart from all these facilities, Banks must also take a step forward in fulfilling their commitment of providing rural areas with the needed infrastructure and providing funds to the Government schools to have modern infrastructure and new study equipments. Banks should also assist doctors in opening new clinics in rural areas through schemes like 'Rural Clinical Services', as the people in rural areas face a difficulty of inadequate Medical Facilities as the hospitals from the villages are also at far-away distances, which creates problems during an emergency. Although banks have started a large number of ATMs, but they must enhance the strength of their ATMs and open them at off-sites and general places like railway stations for customer convenience. Banks must also reduce the rate of interest as sometimes it becomes very difficult for a common man to cope up with the loan he has taken for fulfilling his requirements and on the top of that, to tackle with the rate of interest he has to pay. *8. Again, the facilities like 'Life Insurance Policies' are very beneficial for common people. And the 'Pension' provided to the retired people is a boon for them as with this pension as their own income they can spend life more comfortably and peacefully. Thus, Banks are in real sense SERVING TO GROW AND GROWING TO SERVE

Group III Special Consolation Prize Nupur Khare, Class XII

Banking and Common Man

Scene 1 ( An year ago)
I witness a poor illiterate farmer of Rudauli village, a remote village of U.P. at the bank. He is here to send money to his son Ram who is studying at G.K. Raisoni, Nagpur. Farmer Bholu : Saab, Mujhe apne bete ko 10,000 rupaiyya bhejna hai, ek draft banva dijiye. Kitne din lag jayenge ? (Sir, I have to sent money to my son Rs.10,000.00. Please get a draft for me. How much time will it take?) Bholu bhai ! Bees din to lag jayenge (Bholu, it will take at least 20 days)

Bank Manager:

Scene 2 ( After 4 months)

I saw Bholu farmer with his friend. In his hands were few brochures of a computer company. His friend works in a bank (computerized branch) Bholu Farmer : internet) Bholu and friend walks away after purchasing a computer. The computer is installed, but Bholu does not even know how to press a button. Hamare bete ne kaha hai ki ek computer khared lo ! Ab net se hi paisa bhej dena. (My son has advised me to purchase a computer. He says that I can send money through the

Scene 3 ( After 10 months)

I met Bholu beaming. So I asked him compassionately. Me : Bholu bhai ! Ab to tumhe computer chalan aa gaya hoga? (Bholu, now you must be able to operate the computer?)

Bholu : Arrey, memsahib, ab to ye hal hai, ki agar aap keyboard bhi hata do, to hum mouse se chala lenge. Hum to lagwa rahe hain. (Now, Madam, it is the situation that even if you take away the keyboard I can operate the computer with am getting an internet connection too.)

internet bhi the mouse. I

Th is is Bankin g and Common Man

Banking is the backbone of any economy. No business, trade, commerce can flourish for a long time without the aid of the banking. Banking in some or the other form has existed even in ancient times. When Jesus was against the money-changers in the temple of Jerusalem, he was protesting against the evil practices of banking at that time. When Prophet Mohammed forbade the use of usuary, he was condemning the evil practices of the then existing bankers who sucked the last drop of blood from their helpless victims through exorbitant interest. The commercial banks are a very important institutions of finance in Indian Economy. A banking Industry is the one that accepts the deposits of money for the purpose of lending, repayable on notice and withdrawals through cheque, draft etc. Commercial Banks deal in money there by regulating the economic activities. Banks also earn margin of profit by lending these money. Banking service especially are of great importance and usage to the trading persons. The banks can be mainly classified as - Commercial Banks, Central Banks, Co-operative Banks and Specialized Banks. Commercial Banks are those which carry the banking business of accepting the deposits of money for the purpose of lending. Commercial Banks are mainly governed by the Indian Banking Regulation Act of 1949. Commercial Banks are further classified as Public Sector banks in which the govt. has the major stake and the emphasis is more on the social objectives than that of profitability. Examples of leading public sector banks include Punjab National Bank, State Bank of India. Private Sector Banks are owned, controlled and managed by private individuals and they are free to operate as per the market forces. Examples of private sector banks include - ICICI bank, HDFC bank etc. Central Bank is the main bank of any country. It controls and regulates the working of other banks. It is also the government bank and is responsible for the credit policies of nation. The Reserve Bank of India is the Central bank in our country. Specialised bank include Exports and Imports bank, foreign exchange bank catering to the need of these specialized services. Co-operative banks are governed by the state cooperative Act. The main aim of such banks is to incultake the habit of saving among the rural people. They are the main source of rural credit and agricultural financing in our country. Functions of bank include a variety of services. Banks facilitates the remittances of funds. i.e. a person can transfer any amount of money from one place to another through the interconnectivity of the various branches of bank. It not only saves time but is also cheaper method of funds transfer. Banks also accept the deposits of money as they are both the borrowers and lenders of money. As borrowers they borrow money and as lenders lend money to the needy. Money in the banks can be deposited through saving account which restricts the number of savings as well the amount, current a/c. from which money can be withdrawn without any prior notice. Banks pay the specified rate of Interest which is decided by RBI. Public deposits are of higher interest with fixed and long period. Another function of the bank is facilitating the cheque transactions. Banks ease a lot to their customers by collecting the cheque that has been drawn on other banks. Cheque is the most common and frequently used instrument in banking. It is inexpensive medium of exchanging money. Cheques are usually of two types i) bearer cheques - which can be encashed at the bank counters immediately and ii) crossed cheques which are to be deposited in the payees account only. In addition to all these services banks also offer various allied services to the customers. For example payment of insurance premium is done by the banks on the instructions of customer which saves customer to stand in a ques and wait for hours. For nominal charges Commission, Interest etc. are all taken care by the banks. This is the situation after the nationalization of banks. Earlier the banks were simply an institution of depositing money and credit facilities serving to only a particular section of society (rich intellectuals). But with the nationalization banks have transformed their roles far from profitability to social objectives. They are helping in strengthening the economy and have become from Section Bank to Mass Bank. At the time of Independence of our country our farmers were in a pathetic situation. As the time gestation between the sowing of a crop to the realization of money is quiet long, farmers borrow money from different resources to meet their initial needs of fertilizers, seeds and other family expenses of marriage, death and other ceremonies. Before the nationalization the sahukars and money lenders used to charge a very high rate of interest on the borrowing. Not only that they manipulated the accounts. To keep the farmers in debt trap but the situation changed after the nationalization. The NABARD was set up on an apex body to control and regulate the activities of agricultural financing. The Green Revolution was the major harbinger of such drastic changes. As a result many co-operative banks, SHGs etc. have been set up to provide the funds to the people especially to the poor people at low interest rates. Self Help Groups have emerged to fill in the gap between the earlier and present credit system. Initially there will 5000 SHGs and today it has crossed the tally of 400,000. They are a part of mini credit programmes. In SHGs the small amount is taken from each member and from the pooled money the funds are given to the needy at low rates of interest and with repayment in easy instalments. It has also empowered the women. There is a poor women bank in Tamilnadu with the name of Kutumbshree. All this financial aid has helped a lot to the farmers (common person) which in turn have resulted in the growth and prosperity of nation. Government has taken various steps to eradicate the poverty and unemployment and banks are acting as the strong pillars for the successful implementation of these. Kissan Credit Cards, PMRY etc. are only few to add this list. RRBs, DIR are some of the milestones in the path of the rural banking. At the time of independence, the contribution to GDP by banking sector was only 15 - 20 % and today this section is contributing to 57.6% to GDP according to the latest information. Banks are now serving to the common man with their full capacity. Meeting the various diverse needs of the customers through different methods, banks today seem to be such an important part of the economy without which our economy is sure to be paralysed. Today it is the era of modernization. In seconds an equipment becomes outdated. With the growth and advancement of IT Sector, the drastic changes have come in the Banking system also and the latest wave in the technologies is E-banking. E-banking or internet banking is the latest services offered by banks. E-banking means only person with a computer and internet connection can get connected to the websites of different banks and can perform the transactions. There is no human operator to respond to the needs of the customer. They have to choose the type of services and the list of options is displayed. E-banking has probably revolutionized nearly the whole banking industry. Common public feels more safe and secure as they know that in direct contact with the banks and availability or transfer of funds to other person is available at any hour of the day. Various examples of E-banking services include ATM, EMT, ETF, POS etc. E-banking not only is helpful to the customers but also the banks. For customers it is a boon, since they are allowed to do the permitted cash transactions while travelling in plane or from the office or from the home. It also ensures the safety of funds and the customers are saved from the risk of taking cash with them. Now it is the era of plastic money. From the traditional 'Chandi' coins to plastic money itself describes about the advancement of technology.

From all the above discussion one thing is for very sure that banks are for the common man and will be for the common man. What is a common man most interest in banks? His funds should be safe and secure. He should be able to transfer and remit it easily, speedier and with low transaction cost. He should be able to operate from any place and any hour of the day. So this is what the banks today are doing. Banking services are diverse in the nature as they are serving the multifaceted needs of the customers, from a simple deposit of money to the transfer of money across the world. So this is the banking today and not only this for helping the customers banks have come up with very nice policies. Take the customer charter policy for example. It estimates the time in which the particular function of the bank can be performed, however, it does not ensure the quality of the services. In case of any grievances of the customer due to the deficiency in the services rendered by bank, the person can contact Bank Ombudsman within the period of two months and he shall get redressed for them. Mainly deficiencies of the banking services include late payment of cheques, drafts or their non-payment etc. A committee at the Reserve Bank has also advocated the Clean Note Policy of RBI by it. RBI ensures to maintain the good quality of notes to the common public. There are exchange counters in nearly every bank from where soiled and torn notes can be exchanged for new ones. So banks has move from profitability to social objectives, section bank to people bank and from the rip to the backbone of the economy. By the time, I am writing this, Bholu farmer may be in conversation with his son on mobile phone at his farm house.

Scene 1 ( today)
Bholu Farmer : Beta, maine bank phone karke 20,000 rupiya tumhare khate mein bhijva diya hai. Jara pata kar ke batao ki pahunche ki nahin ? (Son, I have made a call at my bank and had transferred Rs.20,000 to youre account. Please check and inform me.) (Ten minutes later Ram calls from Nagpur -) Ram : Pitajee, paise pahunch gaya hai. Aap nischint rahiyega. (Father, I have received the money. You please be relaxed)

Banking Transactions have today become speedier, safer, low cost (cheaper) and facilitates the common man to access to banking from Any Where and at any Time.

Group III Consolation Prize Akshay Rathi, Class XI

Common Man and Bank

A Bank is a commercial or a state owned institution which provides financial services such as issuing various forms of money, keeping money as deposits, rendering money as loan to enterprises and individuals and processing financial transactions. Banking service is unique in sense that the diverse human needs is multi facet and thus benchmarking purpose cannot be done. The banking sector started in the first decade of the 18th century when the General Bank of India came into existence in 1786. The State Bank of India is the oldest bank in the country. The Reserve Bank of India was formed in 1935 for regulating Indian banking sector. The RBI was formed by recommendations of the Hilton Young Commission which gave its report in 1926. In 1948, RBI was nationalized. By 1960, India's banking sector had grown to an extent that it became a tool for facilitating the development of Indian economy. The Government of India under leadership of then Prime Minister Mrs. Indira Gandhi took the decision and nationalized 14 largest commercial banks with effect from July 19, 1969. In 1980, 6 more commercial banks were nationalized. In 1990's Narismha Rao govt. embarked on policy of liberalization and gave licenses to start new banks and new banks developed which were called "New Tech Savey Banks". Some banks such as HDFC, ICICI bank developed due to thus. Thus this along with rapid economic growth kickoffed development of banking sector in India which led to a retail boom. Presently India has 88 commercial banks, 29 private banks, 31 foreign banks and 28 state owned banks. There are different types of banking such as retail banking, business banking, corporate banking and investment banking. A bank raises funds through attracting depositors, borrowing money from inter bank market and raising money instruments. We recognize those days when we had to wait for 20-30 minutes to get cash withdraw, 2 days to get cheque book, 4 hours to get bank overdraft, 1 week for local clearing, 4-6 week for outstation clearing, face the bank staff who was reluctant to update pass books. But today situation has changed drastically. With a flick of ATM card we get cash, if bank has phone service, we can get cheque books delivered and cheques collection at doorstep. It now takes 3 days to get local clearing and 5 days for outstation clearing. Since 1969, when banks were nationalized, banks have contributed immensely towards development. It is now easier to get educational loans, so children can pursue higher education even in abroad, banks provide loans for education at low interest rate, now children's education is not a burden on parents. Similarly banks provide loan at low interest rate for home loans, car loans, personal loans, consumer loans, business loans, writing capital loans. Few years back building house was a matter of dream for everybody but now one can get a loan easily and fulfill his dream. Bank also provides loans for business activities, for starting new business, so that continued expansion of business can be ensured. Bank also provides loan against export contract. For import contracts, too if there is not sufficient capital, banks provides loan. The 2nd sector of banking is the money it accepts as deposits, on which it pay interest. There are different types of deposits like fixed term deposits, recurring deposits. In recurring deposits you are required to pay fixed money for certain period and after certain period you get a lumbersome money back. Current Account deposit is also another type wherein you deposit whole amount in bank and make payment to people as and when required. Bank also provides credit cards, using this we can purchase things, do shopping there is no need to carry money first we have to deposit some money in bank for which it gives credit cards. Nowadays pension account deposit is also there where in bank collects pensions and gives to us as and when required. It also provides locker system wherein we can keep all our jewellery, gold and silver items safely. There is a protection from bank, all we have to do is to pay some money for this purpose. Banks also have their ATM wherein we can get cash readily as we flick our credit card. Bank is nowadays acting as a role of Insurance agent. We can make payment by cheques from one city to another city once the local clearing is done and we need not pay the commission to bank. This facility is called multiple cheque facility. Bank also provides loan to unemployed to help them start a new business or get a service. Bank provides loan to senior citizens at low interests rate and to deposit of senior citizens it gives them high interest rates.

RBI formed in 1935 has about 22 regional offices in India It is the main banking authority in India which regulates banking sector. It's functions and objectives as a) Monetary policy - It prepares, controls, regulate monetary policy, b) It controls price-rise c) It regulates and supervises financial system, d) It ensures that adequate credit flow is there to the productive sector, e) it provides loans to government, f) It decides the money control and money fllow g) After every 6 months RBI decides new credit policy in which it decides the interests on loans and deposits, h) It ensures development of all through it's policies. It frames all policies for banking sector. Through Prime Minister Rojgar Yojna & Prime Minister Shahari Vikas Yojna and other schemes bank provides a loan of Rs. 100,000 to employed people. If a company's current account deposit is there in bank, all salaries and wages can be paid through it. All tax payments can be done through bank. Some bank also collects payment of electricity bill etc. A bank generates profit as difference between that of the level of interest paid by bank on deposits and other sources funds and the interest it collects as interests allowed on loan and other rendering of services. This is referred to as the spread between cost. Government owned banks or state owned banks have 75% of total assets of all banks, commercial and private banks have 18% of assets and foreign banks have 7% of total assets of all banking sector in India. The banks also provides loans to government for carrying out various welfare programmes. Banks nowadays can collect payments from customer on our behalf. Due to globalization there is a stiff competition between banks as to who can have maximum customers. The Reserve Bank of India has set up a committee called "Committee for Procedures and Performance Audit of Banking Services" under Shri S.S. Tarapore former governor of RBI to see on how banks can provide better services to consumer and common man. Bank is an indispensable tool for the growth of our country. Banking sector which accounts for most of the tertiary sector together contributes 48% of national income. No person can neglect and deny the importance of bank in developing the country and achieving high rate of economic growth. The RBI is still trying to achieve high efficiency and better infrastructure of banking sector so as to enhance it's utility to different consumers. In era of 21st century Bank have to play an important and central role in shaping the future of the country.

Group III Consolation Prize Pawan Sarda, Class XII

Banking and The Common Man

In today's modern business environment, it is difficult for the entrepreneurs to generate funds by themselves. There is a need for some institutional framework which provides money to the business house for investment. Banks are the institutions which cater to this need. In addition to providing money, banks also ensure safety of people's fund in the form of deposits, maintaining their liquidity and providing it back whenever desired. The common man, today, relies on the banks to fulfill a variety of his needs.

History of Bank ing

Banking has its origin right back to the Vedic periods. The system and working of the banks has evolved over the years. Lending money and financing was perhaps replaced by banking in the times of Manu, the Hindu writer, when he mentioned about the various rates of interest in his works. In the Mughal period indigenous financing houses worked well in the matter of financing, foreign trade and commerce and mobilizing of funds. The East India Company in India set up three banks in the first half of the nineteenth century, namely, Bank of Bengal, Bank of Bombay and Bank of Madras which were also called as Presidency Banks. These three banks were merged in the year 1921 to form The Imperial Bank of India. The Reserve Bank of India came into existence after the RBI Act 1935 was passed. The State bank of India took over the Imperial Bank after the passing of the SBI Act 1955. In the Swadeshi Movement, many banks with Indian Management emerged like Punjab National Bank, Bank of Baroda, etc. In 1969, 14 banks were nationalized to serve various purposes. In April 1980, the government took over 6 private sector banks, to make it to a tally of 19 nationalised banks (two of them merged later)

Types of Banks
Banks in India belong to the following sectors i) Public Sector Banks - Banks like the State Bank of India, Regional Rural Banks and 19 Nationalised Banks constitute public sector banks. ii) Private Sector Banks - Private owned banks or foreign banks belong to private sector e.g., Axis Bank iii) Some banks are co-operative banks, catering mainly to the needs of villages and specific sectors iv) Development Banks - Many developmental banks like NABARD, ICICI, IDBI (Industrial Development Bank of India) etc. have been set up for promoting development in various fields.

Functions of the Bank

A) Primary Functions 1) Accepting deposits - The primary functions of the bank is to accept the money from the people and deposit it in their account. It can be done in the form of fixed deposits, savings deposit, recurring deposit or current deposit. banks provide interest on the deposits according to the length of the duration. This ensures safety of the public's funds as they need not bear the risk of keeping their earnings with themselves. They keep getting interest on heir savings. So banks mobilize the savings of the people. The depositors can withdraw money as per his / her requirement. 2. Lending Money - Banks perform this second important function of lending funds to the interested users / borrowers in the form of cash credit, discounting of bills of exchange, overdrafts, demand payments etc. They charge interest on the money borrowed by the people according to the purpose of its use. Thus banks serve as bridge between sowers and investors and lend the money when it is put to the right use.

B) Secondary Functions
1) Agency Function i) Payments - Banks perform various agency functions on behalf of the customers like payment of insurance premium and other bills directly to the creditors. ii) Receipts - Banks on order of customers, directly collects cheques, bills and money from debtors and deposits it into the account of the customers.

iii) Underwriting - banks sometimes undertakes underwriting of shares. iv) Sale and Purchase of Securities - Banks enters into various transactions for the customers because of its vast expertise in the field of finance. v) Remittance of money - Banks easily remit the money of the customers to other places as per their requirements. vi) Foreign transactions - In other parts of the world too, banks provide the funds to the customers, if they require, thus ensuring the safety aspects.

2. General Util ity Services

i) Safety Lockers - Bank provides safety lockers where valuable can be stored by the customers in the safety vaults. ii) Transportation - Businessmen when they send consignments, ask the consignee to pay at the bank, get the receipt and then the delivery of goods. iii) Financial Project Reports and information on financial developments iv) Economic Surveys - Banks conduct economic surveys and publish statistics to know the level of economic activities in operation. v) Issuing traveller's cheque, letters of reference for the consumers.

ROLE OF BANKS IN ECONOMIC DEVELOPMENT AND THEIR SOCIAL CONTRIBUTION

As we have seen banks provide a large array of functions and are responsible for a number of monetary and non-monetary transactions. We will now have a look into their social side and influence on the life of the common men.

1. Capital Formation
Since banks do not let the earnings of the savers rest idle, they act as a link between owners and the investors and provide adequate funds to the investors, to assist in capital formation. Thus they promote production, supply and boost the overall economy.

2. Innovation s
Since they provide required capital to the producers, producers tend to make new innovations and thus the common men is benefited.

3. Increase th e demand
By providing credit facilities banks increase the aggregate demand in the economy, which leads to fuller employment of resources and more productivity.

4. Mon etary Pol icy

Banks are a tool to the monetary policy of the government. They change their policies in accordance with the policy of the government.

5. Investment - Friendl y Interest rate

Banks charge quite low rate of interest on amount borrowed for investment purposes.

6. New class of entrepreneurs

Banks encourage the common men to borrow money and start entrepreneurship, thus leading to more economic activity.

7. Rural development
By providing loans and making investments in the rural areas, banks help in overall balanced development of the nation. All kinds of people are at an advantage.

8. Priority sectors
Banks charge minimal rate of interest on loans for agriculture, small scale industries thus ensuring balanced economic growth and availability of money to the poor.

9. Employment Generation
Banks provide special schemes and loans for self employment and encourage the unemployed people. Thus, we can observe that banks are not merely the institutions for depositing or borrowing money but also serve as the life-blood of economic activities. They are essential to the development of society and for every common man as well. The number of branches of banks is today more that 68,500 throughout the nation. In 2005, there was on bank per a population of 16,000 as compared to the ratio of the bank per 55,000 people in 1969. The percentage of bank credit to the priority sector has gone upto 40% in 2005 of the total credit given. Thus banks are playing a major role in bringing sectoral balance in the economy. Unlike the low percentage of banks in rural India in 1969, it is almost 50% in the year 2005. Banking thus bring regional balance as 75% of population lives in the villages. Amount of depositing has increased from somewhere about Rs.4,50,000 crore in 1969 to Rs.17,50,000 crores in 2005. Also the amount of lending by the banks has increased from around Rs.3,50,000 crores in 1969 to Rs.11,00,000 crores in 2005. Hence, it is evident that banking in India is growing at a rapid rate and providing lot of facilities to the common man.

MODERNISATION
In this new era, banks have become modernized in various aspects. They continue to improve significantly.

1. Person alised services

Banks have started providing personalized services according to the exact queries and requirements of the consumers. Consumers are paid special attention by the banks.

2. Computerisation of works

i) e-banking - Online banking or electronic banking is a new option available to consumers who can access their accounts via internet and make transfers or payments electronically. This concept of anywhere banking has made life very easy for the consumers who can make payments and deposits at a click of the mouse. ii) ATM - Automated Teller Machines have become common in many parts of the nation. People can draw cash from their accounts in the bank from the 24 hours working ATMs spread across the length and breadth of the nation. iii) Debit and Credit Cards - Debit and credit cards have again added to the convenience of the customers, who can make payments using these at a reasonable rate of interest. This has reduced the element of risk involved in carrying cash to all places.

3. Diversification
Banks have diversified their field of activity into newer arenas. i) Mutual Fund Investments - As the banks have expertise in financials matters, they make mutual fund investments on behalf of customers, if ordered to do so. ii) Housing - Banks also provide housing loans to the needy. iii) Education - Special schemes for education related loans are provided by the banks. These loans are at a reasonable interest rate.

SCOPE FOR IMPROVEMENT

Banks in India still need to improve a lot. Their absolute number is not enough. There is a need for increasing the profitability of these banks. There are problems of bad debts etc. services quality requires to be improved. Many states need more banks ( e.g. North-East Indian States) Banking can improve a long way if dealt with properly.

CONCLUSION
The RBI and the commercial banks of India play a very significant role in economic growth and development of the nation. They implement monetary policies of the government, curb price rise, increase productivity by higher capital formation increase the aggregate demand and help in social development as well. Banking has become a way of life for the common man. It depends upon the bank to perform multitude of tasks on his behalf. Its economic life is governed by the banks. On the other hand the banks are also dependent on the common man because it is for him only that they function and derive profits from. The inter relationship between the bank and the common man is inevitable. It would not be wrong to say that the success of the common man depends upon the bank and that of the bank depends upon the common man to a large extent. Banks have raised the standard of living of the common man. In short, life has become much more easy than it would have been in the absence of banks.