Banking Sector In India

INTRODUCTION
Banking in India in the modern sense originated in the last
decades of the 18th century.
The first banks were Bank of Hindustan (1770-1829) and The
General Bank of India(1786).
For many years the presidency banks acted as quasi-central
banks.
The Reserve Bank of India was established in 1935.
In 1969 the Indian government nationalised all the major
banks.
The Indian banking sector is made up of four types of banks
,i.e, PSUs, the state banks, commercial banks and foreign
banks.
2
3
Scheduled Banks in India are those banks
which have been included in the Second
Schedule of Reserve Bank of India (RBI) Act,
1934.
4
Private Banks
Public Banks
Foreign Banks
REGIONAL RURAL BANKS
The government of India set up Regional Rural
Banks (RRBs) on October 2, 1975.
The RRBs are under the control of NABARD.
The banks provide credit to the weaker sections of the
rural areas.
Several concessions enjoyed by the RRBs
Lower cash ratio
Lower statutory liquidity ratio
Lower rate of interest on loans
Managerial and staff assistance
5
A co-operative
bank is a financial
entity which
belongs to its
members, who are
at the same time
the owners and the
customers of their
bank.
PRINCIPLES
Voluntary and open
membership
Democratic member
control
Member economic
participation
Autonomy and
independence
Education, training and
information
Concern for Community
6
Established
on 1April
1935 during
the British
Raj.
Nationalised
in the year
1949.
India's
central
banking
institution
.
Formulate
s
the monet
ary policy.
IT has four
zonal offices,
19 regional
offices at most
state capitals
and head
office in
mumbai.
The
current
Governor
of RBI
is Raghura
m Rajan
7
Main Functions Of R.B.I
Monetary Authority
Regulator and supervisor of the financial system
Manager of Foreign Exchange
Issuer of currency
Developmental role
Banker to the Government
Banker to banks
8
IMPORTANT MILESTONES OF
BANKING INDUSTRY


Enactment of RBI act,1935.
High level of deprivation in economy.



Complex Interest rates
Establishment of Banking Regulation Act,
1949
Reserve Bank of India was vested with
extensive powers for the supervision of
banking


9
EVOLUTIONARY PHASE
FOUNDATION PHASE

In 1955, the Imperial Bank of India was nationalized and was given the
name "State Bank of India"
14 banks in 1969 and 6 banks in 1980 were nationalized termed as First
Banking Revolution.
Rapid branch expansion
Retail lending to risk prone areas at concessional interest rates.


Lack of professionalism and transparency in the functioning of public
sector.
Series of policy initiatives taken with the objectives of consolidation of
banks.



The Economic liberalization of 1990 was initiated to ensure an efficient,
competitive and mature financial market.
On the suggestions of Narsimhan Committee, the Banking Regulation Act
was amended in 1993
RBI gave licenses to new private sector banks as a part of its liberalization
process.
10
Consolidation
Reformatory phase
EXPANSION PHASE