GROWTH IN

BANKING SECTOR
Submitted by
Harish
rawal
Indias banking sector is booming at a great
Indias growing banking sector:

pace.
Indian banking sector has been found
lucrative.
Most of the banks paid their focus on the
retail sector and provide internet banking,
phone banking and mobile banking services to
their customers and have cornered one of the
largest segments of the India's banking sector
by targeting the India's growing middle income
class.
The Indian banking sector has been a
proliferation of new services.
 What is a Bank?

A banker or bank is a financial

institution whose primary activity is to
act as a payment agent for customers
and to borrow and lend money
Function of Banks

Lending money to public (loans)

Transferring money from one place to another
(Remittances)

Acting as trustees

Keeping valuables in safe custody

Government business
 Types of Banks

Public sector Banks

Private sector Banks

Co-operative Bank

Development Bank/Financial institutions
 Reserve Bank of
India
RBI is the banker to bankswhether
commercial, cooperative, or rural. The
relationship is established once the
name of a bank is included in the Second
Schedule to the Reserve Bank of India
Act, 1934. Such bank, called a scheduled
bank, is entitled to facilities of refinance
from
RBI.
 conditions laid
down
subject to fulfillment of the following
conditions laid down in Section 42 (6) of
the Act, as
follows:
It must have paid-up capital and reserves.
It must satisfy RBI that its affairs.
Services Provided By a Bank

Demat Account

Lockers

Cash Management

Insurance Product

Mutual Fund Product

Loans

ECS (Electronic clearance system)

Taxes
Growth in Indian banking assets
 History of banking history

The first bank in India, though conservative, was

established in 1786. From 1786 till today, the
journey of Indian Banking System can be segregated
into three distinct phases. They are as
mentioned below:

Early phase from 1786 to 1969 of Indian Banks

Nationalization of Indian Banks and up to 1991 prior
to Indian banking sector Reforms.

New phase of Indian Banking System with the
advent of Indian Financial & Banking
Sector Reforms after 1991
The following are the steps taken by the Government of India to Regulate

Banking Institutions in

the Country:

1949: Enactment of Banking Regulation Act.

1955: Nationalization of State Bank of India.

1959: Nationalization of SBI subsidiaries.

1961: Insurance cover extended to deposits.

1969: Nationalization of 14 major banks.

1971: Creation of credit guarantee corporation.

1975: Creation of regional rural banks.

1980: Nationalization of seven banks with deposits over 200 crore.

After the nationalization of banks, the
branches of the public sector bank India rose
to approximately 800% in deposits and
advances took a huge jump by 11,000%
 Mergers & Acquisitions

Mergers of banks took place in India in the

1960s under the direction of the Reserve
Bank of India.
From 566 reporAting commercial banks (of
which non-scheduled banks were 474) at the
end of 1951, the number came down to 292
(of which 210 were non-scheduled) at end
1961, to
100 (27 non-scheduled) at the end of 1966;
and to 85 (14 non-scheduled) by the end of
1969.
 STRUCTURE OF THE BANKING INDUSTRY

According to the RBI definition, commercial

banks which conduct the business of banking in
India and which
(a) have paid up capital and reserves of an
aggregate real and exchangeable value of not
less than Rs 0.5 mn and
(b) satisfy the RBI that their affairs are not
being conducted in a manner detrimental to the
interest of their depositors, are eligible for
inclusion in the Second Schedule to the Reserve
Bank of India Act, 1934, and when included are
known as Scheduled Commercial Banks.
 Different groups
Banks in India are categorized in five different
groups
according to their ownership and/or nature of
operation. These bank groups are
(i) State Bank of India and its associates,
(ii) Nationalised Banks,
(iii) Regional Rural Banks,
(iv) Foreign Banks and
(v) Other Indian Scheduled Commercial Banks
There are 71,177 bank offices spread across
the country, of which 43 % are located in
rural areas, 22% in semi-urban areas, 18% in
urban areas and the rest (17 %) in the
metropolitan areas. The major bank groups
(as defined by RBI) functioning are State
Bank of India and its seven associate banks,
19 nationalized banks and the IDBI Ltd, 19
Old Private Sector Banks, 8 New Private
Sector Banks and 29 Foreign Banks
Public Sector Banks in
India
Among the Public Sector Banks in India, United
Bank of India is one of the 14 major banks which
were nationalized on July 19, 1969. Its
predecessor, in the Public Sector Banks, the
United Bank of India Ltd., was formed in 1950
with the amalgamation of four banks viz. Comilla
Banking Corporation Ltd. (1914), Bengal Central
Bank Ltd. (1918), Comilla Union Bank Ltd. (1922)
and Hooghly Bank Ltd. (1932).
(1932). Oriental Bank of Commerce (OBC), a
Government of India Undertaking offers
Domestic, NRI and Commercial banking
services.
OBC is implementing a GRAMEEN PROJECT in
Dehradun District (UP) and Hanumangarh
District (Rajasthan) disbursing small loans.
This Public Sector Bank India has implemented
14 point action plan for strengthening of credit
delivery to women and has designated 5
branches as specialized branches for women
entrepreneurs
List of public
sector banks

Allahabad Bank

Andhra Bank

Bank of Baroda

Bank of India

Bank of Maharashtra

Canara Bank
 Private Sector
Banks
Private banking in India was practiced
since the beginning of banking system in
India. The first private bank in India to be
set up in Private Sector Banks in India was
IndusInd Bank. It is one of the fastest
growing Private Sector Bank in India. IDBI
ranks the tenth largest development bank
in the world as Private Banks in India and
has promoted a world class institution in
India.
Conti,.
The first Private Bank in India to receive an in
principle approval from the Reserve Bank of
India was Housing Development Finance
Corporation Limited, to set up a bank in the
private sector banks in India as part of the
RBI's liberalization of the Indian Banking
Industry. It was incorporated in August 1994
as HDFC Bank Limited with registered office
in Mumbai and commenced operations as
Scheduled Commercial Bank in January 1995.
Conti,.
ING Vysya, yet another Private Bank of
India was incorporated in the year 1930.
Bangalore has a pride of place for having
the first branch inception in the year 1934.
With successive years of patronage and
constantly setting new standards in
banking, ING Vysya Bank has many credits
to its account.
List of Private Banks in India
Major reforms initiatives

Some of the major reform initiatives in the last

decade that have changed the face of the Indian
banking are:-
Interest Rate Deregulation-Interest

Government equity in banks

New private sector banks

New areas have been opened up for bank

financing
 Effect of New Technologies on
Banks

The Indian banking sector has seen an

acceleration with the introduction of
technological transformation like
ATMs,
telephone banking,
online banking,
web based products,
e-cheques,
call centers
credit cards,
debit cards.
 Even the old public sector banks are keeping
themselves tune with the new technological changes.
SBI:
Like State Bank of India (SBI) has set aside more than
Rs 500 crore during its 3 years of of time span for the
up gradation.
Presently, SBI has more than 3000 computerized
branches and over 1000 new ATMs. Similarly,
UTI:
United Bank of India (UTI) has started its
computerization process in 1986 and so far it has
completed its computerization work of more than 774
branches.
It has also set up 25 ATMs in throughout the India
 Banks and the
Internet World
Due to the advantages of inherent
conveniences, :
24x7 internet banking has proved to be an
attractive service
Transactions done through the internet
cost
Some banks also offer unique features of
internet banking
 Notable features of
the internet banking

Transfer of money to your account at the same bank's branch in
another city.

Opening of a fixed deposit
Issuing of a banker's cheque or a demand draft.

Checking of bank balance.

Stopping the clearance of cheque.

Request for the cheque book.

Retail Sector Growth