BANKING STRUCTURE IN INDIA

INTRODUCTION
India cannot have a healthy economy without a sound and effective banking
system.
The banking system should be hassle free and able to meet the new challenges
posed
by technology and other factors, both internal and external.
In the past three decades, India's banking system has earned several outstanding
achievements to its credit. The most striking is its extensive reach. It is no longer
confined to metropolises or cities in India. In fact, Indian banking system has reached
even to the remote corners of the country. This is one of the main aspects of India's
growth story.
DEFINATION OF BANKING:
BANK AS ACCEPTING FOR THE PURPOSE OF LENDING OR INVESTMENT OF DEPOSITS OF
MONEY
FROM THE PUBLIC, REPAYABLE ON DEMAND OR OTHERWISE AND WITHDRAWAL BY CHEQUE,
DRAFT,
AND ORDER. THE COMBINATION OF THE FUNCTIONS OF ACCEPTANCE OF PUBLIC DEPOSITS
AND
WITHDRAWAL OF THE MONEY BY CHEQUES BY ANY INSTITUTION CANNOT BE PERFORMED
WITHOUT
THE APPROVAL OF RESERVE BANK.
A BANK IS AN INSTITUTION WHICH DEALS IN MONEY AND CREDIT. THUS, BANK IS AN
INTERMEDIARY WHICH HANDLES OTHER PEOPLE'S MONEY BOTH FOR THEIR ADVANTAGE AND
TO ITS
OWN PROFIT. BUT BANK IS NOT MERELY A TRADER IN MONEY BUT ALSO AN IMPORTANT
MANUFACTURER OF MONEY.
 HISTORY OF INDIAN BANK
 The first fully Indian owned bank was the Allahabad Bank, established in 1865.
 However, at the end of late-18th century, there were hardly any banks in India in the
 modern sense of the term. The American Civil War stopped the supply of cotton to
 Lancashire from the Confederate States. Promoters opened banks to finance trading in
 Indian cotton. With large exposure to speculative ventures, most of the banks opened
 in India during that period failed. The depositors lost money and lost interest in
 keeping deposits with banks. Subsequently, banking in India remained the exclusive
 domain of Europeans for next several decades until the beginning of the 20th century.
 Foreign banks too started to arrive, particularly in Calcutta, in the 1860s. The
 Comptoire d'Escompte de Paris opened a branch in Calcutta in 1860, and another in
 Bombay in 1862; branches in Madras and Pondicherry, then a French colony,
 followed. Calcutta was the most active trading port in India, mainly due to the trade of
 the British Empire, and so became a banking centre.
 Hilton-Young Commission:
 • The Reserve Bank of India was set up on the basis of the recommendations of
 the Royal Commission on Indian Currency and Finance also known as the
 Hilton-Young Commission.
BANKING STRUCTURE IN INDIA
CHALLENGES FACED BY INDIAN BANKING
INDUSTRY:
1 RURAL MARKET
2 MANAGEMENT OF RISK
3 GROWTH OF BANKING
4 MARKET DISCIPLINE
5 GLOBAL BANKING
6 CUSTOMER RETENTION
CONCLUSION

OVER THE YEARS, IT HAS BEEN OBSERVED THAT CLOUDS OF TREPIDATION AND DROPS
OF GROWTH
ARE TWO IMPORTANT PHENOMENA OF MARKET, WHICH FREQUENTLY CHANGES IN
DIFFERENT SETS OF
CONDITIONS. THE PRE AND POST LIBERALIZATION ERA HAS WITNESSED VARIOUS
ENVIRONMENTAL
CHANGES WHICH DIRECTLY AFFECTS THE AFORESAID PHENOMENA. IT IS EVIDENT THAT
POST
LIBERALIZATION ERA HAS SPREAD NEW COLOURS OF GROWTH IN INDIA, BUT
SIMULTANEOUSLY IT HAS
ALSO POSED SOME CHALLENGES.
Thank you