Future Prospect of Banking Industry in India.

Presented By : Krisha Lodhavia 01 Chintan Satra 02 Abhishek Karekar 04 Esha Kudtarkar 05

INTRODUCTION
The Indian banking industry originated in the 18th century. The General Bank of India(1786) & Bank of Hindustan(1770) were the first banks in India. The Reserve Bank of India, India's central banking authority, was established in April 1935, but was nationalized on January 1, 1949 In 1949, the Banking Regulation Act was enacted which empowered the Reserve Bank of India (RBI) "to regulate, control, and inspect the banks in India". There are19 nationalise banks and many private banks in india State bank of india is the largest bank in India.

HISTORY
In ancient India there is evidence of loans from the Vedic period (beginning 1750 BC). Later during the Maurya dynasty (321 to 185 BC), an instrument called adesha was in use, which was an order on a banker desiring him to pay the money of the note to a third person, similar to a bill of exchange today.

Merchants in large towns gave letters of credit to one another.

Thus evolved the banking system in India.

STRUCTURE OF BANKING INDUSTRY

Public Sector Banks in India:

Allahabad Bank Andhra Bank Bank of Baroda Bank of India Bank of Maharashtra Canara Bank Central Bank of India Dena Bank IDBI Bank Indian Bank

Indian Overseas Bank Oriental Bank of Commerce Punjab and Sind Bank Punjab National Bank Syndicate Bank UCO Bank Union Bank of India United Bank of India Vijaya Bank State Bank of India Associated Banks of State Bank of India
State Bank of Bikaner and Jaipur State Bank of Hyderabad State Bank of Mysore State Bank of Patiala State Bank of Travancore

PRIVATE SECTOR BANKS

AXIS Bank Ltd. Capital Local Area Bank City Union Bank Ltd. Coastal Local Area Bank DCB Bank Dhanlaxmi Bank Ltd. ICICI Bank Limited IndusInd Bank ING Vysya Bank Karnataka Bank Ltd. Kotak Mahindra Bank Limited

 SBI Commercial and International Bank Tamilnad Mercantile Bank Ltd. The Catholic Syrian Bank The Federal Bank Ltd. The HDFC Bank Ltd. The Jammu & Kashmir Bank Ltd. The Karur Vysya Bank Ltd. The Lakshmi Vilas Bank Ltd. The Nainital Bank Ltd. The South Indian BanK Yes Bank Limited

FOREIGN BANKS
AB Bank Ltd. 2 The Royal Bank of Scotland N.V. 3 Abu Dhabi Commercial Bank Ltd. 4 American Express Banking Corporation 7 Bank of America Citibank N.A. USA 42 DBS Bank Ltd. Deutsche Bank HSBC Ltd J.P. Morgan Chase Bank N.A. JSC VTB Bank There are more than 30 foreign banks which have their branch in India.

NATIONALIZATION OF BANKS
It formed State Bank of india to act as the principal agent of RBI and to handle banking transactions of the Union and State Governments all over the country. Seven banks forming subsidiary of State Bank of India was nationalised in 1960 on 19th July, 1969, major process of nationalisation was carried out. 14 major commercial banks in the country was nationalised. The second phase of nationalisation of Indian banks took place in the year 1980. Seven more banks were nationalised with deposits over 200 crores. Till this year, approximately 80% of the banking segment in India were under Government.

CURRENT
By 2010, banking in India fairly mature in terms of supply, product range and reach-even though reach in rural India still remains a challenge for the private sector and foreign banks. In terms of quality of assets and capital adequacy, Indian banks are considered to have clean, strong and transparent balance sheets relative to other banks in comparable economies in its region. With the growth in the Indian economy expected to be strong for quite some time-especially in its services sector-the demand for banking services, especially retail banking, mortgages and investment services are expected to be strong. In March 2006, the Reserve Bank of India allowed Warburg Pincus to increase its stake in Kotak Mahindra Bank (a private sector bank) to 10%. This is the first time an investor has been allowed to hold more than 5% in a private sector bank.

 With the entry of new players and multiple channels, customers (both corporate and retail) have become more discerning and less "loyal" to banks. This makes it imperative that banks provide best possible products and services to ensure customer satisfaction. They have been managing a world of information about customers - their profiles, location, needs, requirements, cash positions, etc. Furthermore, banks have very strong in-house research and market intelligence units in order to face the future challenges of competition, especially customer retention. In 2012-13 banks have started focusing on lending to more profitable segments suchas retail and small and medium (SMEs), improving risk management policies and effective

 Historical performance of different types of players in the banking industry, public sector bank has grown its deposits, advances and business per employee by the highest rate 21.7%, 23% and 21.1% respectively As far as net interest income is concerned, private banks are ahead in the race by reporting 24.2% growth, followed by pubic banks (21.4%) and then by foreign banks (14.8%). Though the growth in the business per employee and profit per employee has been the highest for public sector banks, in absolute terms, foreign banks have the highest business per employee as well as profit per employee

Challenges
More stringent capital requirements to achieve as per Basel III Increasing non-performing and restructured assets. intensifying competition Managing Human Resources and Development

 Frequent changes in policy rates to maintain economic stability, various regulatory requirements, etc. are also key concerns. Despite these concerns, experts say that the Indian banking industry will grow through leaps and bounds looking at the huge growth potential of Indian economy. High population base of India, mobile banking offering banking operations through mobile phones, financial inclusion, rising disposable income, etc. will drive the growth Indian banking industry in the long-term. The Indian economy will require additional banks and expansion of existing banks to meet its credit needs.

Future prospects
Licensing Rising per capita income High growth of Indian Economy Mortgages to cross Rs 40 trillion by 2020 Wealth management will be big business with 10X growth The number of branches to grow 2X; ATMs to grow 5X Mobile banking to see huge growth and will redefine transaction banking paradigm.

 Customer Relationship Management (CRM) and data warehousing will drive the next wave of technology in banks. Banking margins will come under pressure New models to serve the Small and Medium Enterprises (SME). Investment banking will grow over tenfold. Infrastructure financing to hit over Rs 20 trillion on commercial banks.