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system
Central Bank (R.B.I)
Origin OF RBI
The origin of the Reserve Bank can be traced to 1926,
when the Royal Commission on Indian Currency and
Financealso known as the Hilton-Young Commission
recommended the creation of a central bank to
separate the control of currency and credit from the
government and to augment banking facilities
throughout the country.
The Reserve Bank of India Act of 1934 established the
Reserve Bank as the banker to the central government
and set in motion a series of actions culminating in the
start of operations in 1935.
Since then, the Reserve Banks role and functions
have undergone numerous changesas the nature of
the Indian economy has changed.
RBI ORGANISATION
STRUCTURE
What do they do ?
Monetary Authority
Issuer of Currency
Banker and Debt Manager to
Government
Banker to Banks
Regulator of the Banking System
Manager of Foreign Exchange
Maintaining Financial Stability
Regulator and Supervisor of the
Payment and Settlement
Systems
Developmental Role
REGULATOR
SUPERVISOR
FACILITATOR
COMMERCIAL BANKS
CONCLUSION OF DEFINITION
1) A bank is a commercial establishment
-a dealer in debts which
2) aims at earning profits
3) by accepting deposits from public, which
4) are repayable on demand or otherwise ;
through
5) cheques, draft or otherwise ; and
6) which are used for lending or investment
COMMERCIAL BANIKING IN
INDIA
Public Sector Banks =State Bank of
India + SBIs associate banks +
Nationalised banks
Private Sector Banks=Indian Private
Sector Banks (Old/New generation
banks)+Foreign banks in India
Other Banks=Regional Rural
Banks(RRB)
The banks which falls into the category of Nationalized Banks are:
1. Allahabad Bank
2. Andhra Bank
3. Bank of Baroda
4. Bank of India
5. Bank of Maharashtra
6. Canara Bank
7. Central Bank of India
8. Corporation Bank
9. Dena Bank
10. Indian Bank
11. Indian Overseas Bank
12. Oriental Bank of Commerce
13. Punjab and Sind Bank
14. Punjab National Bank
15. Syndicate Bank
16. UCO Bank
17. Union Bank of India
18. United Bank of India
19. Vijaya Bank
20. SBI and its associates (a. State Bank of Bikaner & Jaipur
b. State Bank of Hyderabad
c. State Bank of Mysore
d. State Bank of Patiala
e. State Bank of Travancore)
Other Banks
Regional rural banks : Regional Rural
Banks(alsoRRBs) are local
levelbankingorganizations operating in different
States ofIndia. They have been created with a view
to serve primarily the rural areas of India with basic
banking andfinancial services. However, RRBs may
have branches set up for urban operations and their
area of operation may include urban areas too.
The area of operation of RRBs is limited to the area
as notified by Government of India covering one or
more districts in the State. The number of Regional
rural banks in India is around 70.
PRIMARY FUNCTIONS
The main functions of banks are accepting deposit and lending
loans:
A ACCEPTING DEPOSITSAccepting deposits is the main function of commercial banks. Banks
offer different types of Bank accounts to suit the requirements and
needs of different customers. Different types of Bank accounts are
as follows :
1. Fixed deposits:Money is deposited in the account for a fixed period. After expiry of
specified period person can claim his money from the bank. Usually
the rate of interest is maximum in this account. The longer the
period of deposit, the higher will be the rate of interest on deposit.
Current A/C deposit:This is also called open account. The special feature
of this account is that amount can be deposited or
withdrawn any number of time without giving any
notice to the bank.
These are mainly maintain by business community
to facilitate frequent transaction with big amounts.
Generally no rate of interest or very low rate of
interest is paid on this account.
As the deposit is repayable on demand, it is also
known as demand deposit Withdrawals are always
made by cheque.
B -LENDING LOANS
1. Call loans :These loan are called back at any time(given for 1
to 14 days). Normally, this loans are taken by bill
brokers or stock brokers.
2. Short term loans:These are sanctioned for a period up to 1 year.
3.Medium term loans:These are sanctioned for the period varying
between 1 and 5 years.
4. Long term loans :
These loan are sanctioned for a period of more than
5 years
SECONDARY FUNCTIONS
Apart from the main functions, the banks also provide financial services
to the corporate sector and business and society. They are as follows:
A AGENCY FUNCTIONS :Where bank act as agent of its customer are called agency functions.
Funds Transfer
Cheques collection
Periodic payments/collection
Periodic payments/collection
Portfolio management
Other functions
DEVELOPMENT BANKS
Development Bankis a financial
institution dedicated to fund new and
upcoming
businesses
and
economicdevelopment projects by
equity capital or loan capital.
Development
banksare
those
financial institutions engaged in the
promotion
and
developmentof
industry, agriculture and other key
sectors.
Co-operative Banks
Co operative Banks in India are
registered under the Co-operative
Societies Act. The cooperative bank
is also regulated by theRBI. They
are governed by the Banking
Regulations Act 1949 and Banking
Laws (Co-operative Societies) Act,
1965.
Banking Regulation
Act,1949
Banking in India
Banking in India is governed by BR
Act,1949 and RBI Act,1934
Banking in India is
controlled/monitored
by RBI and Govt. of India
Penalities
Regulation
Suspension
&
Winding up
Control over
management
(BR
Customer
Acceptance
Policy
Monitoring of
Transactions
Customer
Identification
Procedure
Bank Customers - 1
Individuals
Power of
Attorney
Holders
Joint account
hoders
Bank Customers
Executors/Trustees
Illiterate
Perons
Minors
Bank Customers - 2
Clubs/
Socities
Sole
Proprietor
Partnership
Corporates
Hindu
Undivided
Family
BANKER-CUSTOMER
RELATIONSHIP
DEBTOR-CREDITOR
CREDITOR-DEBTOR
AGENT-PRINCIPAL
LESSOR-LESSEE