INTRODUCTION INTRODUCTION

BANKING SECTOR BANKING SECTOR

OF INDIA OF INDIA
AT IS BANK? AT IS BANK?
A banker or bank is a financial institution A banker or bank is a financial institution
whose primary activity is to act as a payment whose primary activity is to act as a payment
agent for customers and to borrow and lend agent for customers and to borrow and lend
money. money.
An institution where one can place and An institution where one can place and
borrow money and take care of financial affairs; borrow money and take care of financial affairs;
A branch office of such an institution. A branch office of such an institution.
The first modern bank was founded in taly in The first modern bank was founded in taly in
Genoa in 1406, its name was (Bank of St. Genoa in 1406, its name was (Bank of St.
George). George).
FUNCTIONS OF FUNCTIONS OF
BANKS BANKS
Accepting Deposits from public/others Accepting Deposits from public/others
(Deposits). (Deposits).
Lending money to public (Loans). Lending money to public (Loans).
Transferring money from one place to Transferring money from one place to
another (Remittances). another (Remittances).
Acting as trustees. Acting as trustees.
Keeping valuables in safe custody. Keeping valuables in safe custody.
Government business. Government business.
ACTING AS A TRUSTEES ACTING AS A TRUSTEES
Banks also act as trustees for various purposes. For example, Banks also act as trustees for various purposes. For example,
whenever a company wishes to issue secured DEBENTURES, it whenever a company wishes to issue secured DEBENTURES, it
has to appoint a financial intermediary as trustee who takes has to appoint a financial intermediary as trustee who takes
charge of the security for the debenture and looks after the charge of the security for the debenture and looks after the
interests of the debenture holders. Such entity necessarily have interests of the debenture holders. Such entity necessarily have
to have expertise in financial matters and also be of sufficient to have expertise in financial matters and also be of sufficient
standing in the market/society to generate confidence in the standing in the market/society to generate confidence in the
minds of potential subscribers to the debenture. While Banks are minds of potential subscribers to the debenture. While Banks are
the natural choice for the customers, Banks must possess the the natural choice for the customers, Banks must possess the
following to be effective and retain that: following to be effective and retain that:
A track record of sufficient length. A track record of sufficient length.
Facilities for safe keeping. Facilities for safe keeping.
Legal skills to take necessary steps for the trusteeship Legal skills to take necessary steps for the trusteeship..
DEBENTURES DEBENTURES
t is define as certicate of agreements of t is define as certicate of agreements of
loans which is given under the companies loans which is given under the companies
stemps and ensure fixed returns on the basis stemps and ensure fixed returns on the basis
of interest rate and the principal amount of interest rate and the principal amount
whenever debenture mature. whenever debenture mature.
TYPES OF DEBENTURES TYPES OF DEBENTURES- -
1.NCD 1.NCD
2.PCD 2.PCD
3.OCD 3.OCD
4.FCD 4.FCD
TYPES OF BANKS TYPES OF BANKS
Public sector Banks Public sector Banks
Private sector Banks Private sector Banks
Co Co- -operative Banks operative Banks
Development Bank/Financial institutions Development Bank/Financial institutions
PubIic sector Banks PubIic sector Banks
Some PubIic Sector Banks in India Some PubIic Sector Banks in India: :
Central Bank of ndia Central Bank of ndia
Corporation Bank Corporation Bank
Dena Bank Dena Bank
Bank of ndia Bank of ndia
ndian Overseas Bank ndian Overseas Bank
Oriental Bank of Commerce Oriental Bank of Commerce
Punjab & Sind Bank Punjab & Sind Bank
Private sectors Banks Private sectors Banks
Old generation private banks Old generation private banks
New generation private banks New generation private banks
ICICI Bank ICICI Bank
IDBI Bank IDBI Bank
Axis bank Axis bank
Foreign banks operating in ndia Foreign banks operating in ndia
SBC BANK SBC BANK
CITI BANK CITI BANK
ABN ABN- -AMRO BANK AMRO BANK
STANDARD CARTED BANK STANDARD CARTED BANK
Upcoming foreign bank in ndia Upcoming foreign bank in ndia
RBS(ROYAL BANK OF SCOTLAND GROUP) RBS(ROYAL BANK OF SCOTLAND GROUP)
NDUSTRAL AND COMMERCAL BANK OF NDUSTRAL AND COMMERCAL BANK OF
CHNA CHNA
Scheduled co Scheduled co- -operative banks operative banks
Non Non- -scheduled bank scheduled bank
CO CO- -OPERATIVE OPERATIVE
BANKS BANKS
The Co operative banks in India started functioning aImost 100 The Co operative banks in India started functioning aImost 100
years ago. The Cooperative bank is an important constituent of the years ago. The Cooperative bank is an important constituent of the
Indian FinanciaI System.They are setup to provide easy Ioans to Indian FinanciaI System.They are setup to provide easy Ioans to
farmers or other persons to set up his buisness. farmers or other persons to set up his buisness.
They are non profitabIe banks. They are non profitabIe banks.
Cooperative banks in India finance ruraI areas under Cooperative banks in India finance ruraI areas under: :
Farming Farming
CattIe CattIe
MiIk MiIk
atchery atchery
PersonaI finance PersonaI finance
Some exampIe of co Some exampIe of co- -operative banks in India operative banks in India- -
IDBI BANK(INDUSTRIAL DEVELOPMENT BANK OF INDIA) IDBI BANK(INDUSTRIAL DEVELOPMENT BANK OF INDIA)
IFCI BANK(INDUSTRIAL FINANCE COOPERATION OF INDIA) IFCI BANK(INDUSTRIAL FINANCE COOPERATION OF INDIA)
APEX BANK APEX BANK
DeveIopment DeveIopment
Banks/FinanciaI Banks/FinanciaI
Institutions Institutions
These banks are mainly used for devoloping These banks are mainly used for devoloping
industries and countries industries and countries
Some Examples Some Examples- -
Federal Bank Federal Bank
HDFC Bank HDFC Bank
HSBC HSBC
CC CC
Bank ndian Overseas Bank Bank ndian Overseas Bank
NG Vysya Bank NG Vysya Bank
O CONTROLS OVER BANKS O CONTROLS OVER BANKS
The Reserve Bank of India The Reserve Bank of India
(RBI) (RBI)
istory istory::- -
Become operational on April 1,1935 Become operational on April 1,1935
Nationalized in the Year 1949. Nationalized in the Year 1949.
Major objectives: Major objectives:- -
Regulate the issue of banknote. Regulate the issue of banknote.
Maintain reserves with a view to securing monetary Maintain reserves with a view to securing monetary
stability. stability.
To operate the credit and currency system of the country to To operate the credit and currency system of the country to
its advantage. its advantage.
Functions of RBI Functions of RBI
The fuctions are classified into three heads: The fuctions are classified into three heads:- -
Traditional functions Traditional functions
Promotional functions Promotional functions
Supervisory functions Supervisory functions
TraditionaI functions TraditionaI functions
Monopoly of currency notes issue Monopoly of currency notes issue
Banker to the Government (both the central Banker to the Government (both the central
and state) and state)
Fight against economic crisis and ensures Fight against economic crisis and ensures
stability of ndian economy. stability of ndian economy.
Controller of ForEx and credit Controller of ForEx and credit
Maintaining the external value of domestic Maintaining the external value of domestic
currency currency
PromotionaI functions PromotionaI functions
Extension of the facilities for the Extension of the facilities for the smaII smaII
scaIe industries scaIe industries
nnovating the new banking business nnovating the new banking business
transactions. transactions.
Extension of the facilities for the provision Extension of the facilities for the provision
of the agricultural credit through NABARD of the agricultural credit through NABARD
Supervisory functions Supervisory functions
Granting licence to Banks. Granting licence to Banks.
Periodical review of the work of the Periodical review of the work of the
commerciaI banks. commerciaI banks.
Control the non Control the non- -banking finance banking finance
corporation. corporation.
O IT CONTROLS BANK & O IT CONTROLS BANK &
ECONOMY ECONOMY
TOOLS: TOOLS:- -
CRR( CAS RESERVE RATIO): 5.5% CRR( CAS RESERVE RATIO): 5.5%
REPO RATES(RR):7.5% REPO RATES(RR):7.5%
REVERSE REPO RATE(RRR): 6.0% REVERSE REPO RATE(RRR): 6.0%
STATUTORY LIQUIDTY RATIO (SLR):24% STATUTORY LIQUIDTY RATIO (SLR):24%
BANK RATE: 6.0% BANK RATE: 6.0%
Overview of Indian Banking Sector Overview of Indian Banking Sector
A GIimpse of Banking sector A GIimpse of Banking sector
Phase Phase- -1 1
Early phase from 1786 to 1969 of ndian Banks Early phase from 1786 to 1969 of ndian Banks
Phase Phase- -2 2
Nationalization of ndian Banks and up to 1991 Nationalization of ndian Banks and up to 1991
prior to ndian banking sector Reforms prior to ndian banking sector Reforms
Phase Phase- -3 3
New phase of ndian Banking System with the New phase of ndian Banking System with the
advent of ndian Financial & Banking Sector advent of ndian Financial & Banking Sector
Reforms after 1991 Reforms after 1991
Phase Phase- -1 1
GENERAL BANK OF NDA 1786(FRST BANK) GENERAL BANK OF NDA 1786(FRST BANK)
RESERVE BANK OF NDA 1935 RESERVE BANK OF NDA 1935
SLOW GROWTH AND PERODC FALURE SLOW GROWTH AND PERODC FALURE
THE BANKNG COMPANY ACT 1949 THE BANKNG COMPANY ACT 1949
PEOPLE PEOPLE Mostly Mostly SAVE N POSTAL DEPOSTS SAVE N POSTAL DEPOSTS
Phase Phase- -2 2
Nationalization of imperial bank of ndia and Nationalization of imperial bank of ndia and
formation of sate bank of ndia(1955) formation of sate bank of ndia(1955)
Nationalization of SB and Subsidiaries(1960) Nationalization of SB and Subsidiaries(1960)
nsurance cover extended to deposits nsurance cover extended to deposits
Creation of credit guarantee corporation Creation of credit guarantee corporation
Creation of regional rural banks Creation of regional rural banks
Phase Phase- -3 3
Entry of Foreign Banks Entry of Foreign Banks
Phone Banking and Net Phone Banking and Net- -Banking Banking
Shelter from external macroeconomic shock Shelter from external macroeconomic shock
System become more convenient and swift System become more convenient and swift
ChaIIenges faced by Indian ChaIIenges faced by Indian
banks banks
Lack of product expertise Lack of product expertise
Traditionally focused on limited range of products Traditionally focused on limited range of products
Primarily for corporate clients Primarily for corporate clients
Need for acquiring skills in Need for acquiring skills in
Retail, structured finance Retail, structured finance
Lack of distribution expertise Lack of distribution expertise
Reliance on branch channel and human intervention Reliance on branch channel and human intervention
Relatively high unit cost of delivery given small Relatively high unit cost of delivery given small
transaction sizes transaction sizes
Limited use of technology Limited use of technology
Across both customer Across both customer- -facing and facing and
internal functions internal functions
Continued Continued
nefficient capital allocation nefficient capital allocation
Competition in market Competition in market
Post office Post office
nsurance nsurance
Financial nstitution Financial nstitution
Foreign Banks Foreign Banks
ays Ahead ays Ahead
Technological Advancement Technological Advancement
Rural Banking Rural Banking
mproving Risk Management mproving Risk Management
Developing a flexible model for rapid Developing a flexible model for rapid
scale scale- -up at optimal cost up at optimal cost
FACTS AND FGURES FACTS AND FGURES
ndian banking sector has 6 ndian banking sector has 6
th th
rank in all over the world. rank in all over the world.
SB has 6500+ ATMs all over the country. SB has 6500+ ATMs all over the country.
CC bank has 3500+ ATMs all over the country. CC bank has 3500+ ATMs all over the country.
RB had printed 6,39,948 lakhs crore notes till 6 RB had printed 6,39,948 lakhs crore notes till 6
TH TH
Nov Nov
2008. 2008.
N ndore SB has 45+ ATMs . N ndore SB has 45+ ATMs .
SB provides the facility and it is tie with 9200+ banks to SB provides the facility and it is tie with 9200+ banks to
use their ATMs. use their ATMs.
Acc. To business magazine survey the no. of ATMs grew Acc. To business magazine survey the no. of ATMs grew
28% yearly. 28% yearly.
nspite of it ndia has 23+ ATMs per million people, nspite of it ndia has 23+ ATMs per million people,
China has 55+ ATMs and South Korea has 1600+ ATMs China has 55+ ATMs and South Korea has 1600+ ATMs
per million people. per million people.
Transaction done through ATMs is around 70,000 crore Transaction done through ATMs is around 70,000 crore
in a year. in a year.
CC bank has largest no. branches in foreign also. CC bank has largest no. branches in foreign also.
Queries Queries
TANK YOU TANK YOU