18537500 commercial bank

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PUBLIC SECTOR

State Bank ofIndia

AllahabadBank

PunjabNational Bank

Bank of Baroda Dena Bank

PRIVATESECTOR

HDFC Bank

ICICI Bank

ING VysyaBank

Axis Bank

Induslnd Bank

Karur VysyaBank

FOREIGN SECTOR

ABN AMRO

Deutsche Bank

HSBC Bank

Citibank

JP Morgan ChaseBank

StandardChartered Bank

Commercial Bank in India


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LIABILITIES OF BANK

DEPOSITS

DEMANDDEPOSIT

CURRENTDEPOSIT

SAVING CALL DEPOSIT

TERMDEPOSIT/FIXED

DEPOSIT


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OTHER LIABILITIES

Borrowings from RBI

Borrowings from other banks

Other non deposits resources such asborrowings from IDBI, NABARD , EXIM BANKand bills rediscounted with financialinstitutions.


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BANKING ASSET

ASSET

CASH IN HAND &BALANCES WITH

RBI

ASSET WITHBANKING

SYSTEM

INVESTMENT INGOVT. &

APPROVEDSECURITIES

BANK CREDIT


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INVESTMENT

GOVT OFINDIASECURITIES

OTHERAPPROVEDSECURITIES

SLRSECURITIES

NON-APPROVEDSECURITIES

NON SLRSECURITIES


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BANK CREDIT

CREDIT

LOANS

CASH CREDIT

OVERDRAFT

PURCHASE &DISCOUNTING

OFCOMMERCIAL

BANKS

INSTALLMENT

OR HIRE PURCHASE

CREDIT

DEMANDLOANS


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INVESTMENT POLICIES

Each bank is responsible for framing its own Internal InvestmentPolicy Guidelines (or, simply, Investment policy). The Asset LiabilityCommittee (ALCO) of a bank, comprising senior bank officials andheaded in most cases by the CEO, plays a key role in drafting the

investment policy of the bank. The investment policy and thechanges made therein from time to time have to obtain the bankBoard's approval for it. The aim of an Investment Policy of a bank isto create a broad framework within which investment decisions ofthe Bank could be taken. The actual decisions regarding investment

are to be taken by the Investment Committee set up by the Board.The Investment Policy outlines general instructions and safeguardsnecessary to ensure that operations in securities are conducted in

accordance with sound and acceptable business practices.


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The parameters on which the policy is based are return (target returnas determined in individual cases), duration (target duration of theportfolio), liquidity consideration and risk. Thus, while the Policyremains within the framework of the RBI guidelines with respect tobank investment, it also takes into consideration certain bank-specific

factors, viz., the bank's liquidity condition and its ability to take creditrisk, interest rate risk and market risk. The policy is determined for SLRand non-SLR securities, separately. The Investment Policy providesguidelines with respect to investment instruments, maturity mix ofinvestment portfolio, exposure ceilings, minimum rating of bonds/

debentures, trading policy, accounting standards, valuation ofsecurities and income recognition norms, audit review and reportingand provisions for Non-Performing Investments (NPI). It also outlinesfunctions of front office/ back office/ mid office, delegation of financialpowers as a part of expeditious decision-making process in treasuryoperations, handling of asset liability management (ALM)issues, etc.


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Several banks follow the practice of a strategy paper. Based on themarket environment envisaged by Asset Liability Committee (ALCO)in the Asset Liability Management (ALM) Policy, a Strategy Paper oninvestments and expected yield is usually prepared which is placed

before the CEO of the Bank. A review of the Strategy Paper may bedone at, say half yearly basis and put up to the CEO.


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EVOLVING TRENDS

TECHNOLOGY

OUTSOURCINGOF SERVICES

FINANCIALINCLUSION


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TECHNOLOGY

INTERNETBANKING

MOBILE BANKINGTRANSACTIONS

TECHNOLOGY

OUTSOURCING OFNON COREACTIVITIES

OUTSOURCINGOF SERVICES

NO FRILL ACCOUNT

USE OF BUSINESSFACILITATOR &CORRESPONDENTS

INFORMATION ANDCOMMUNICATIONTECHNOLOGY

MICRO CREDIT

SELF HELP GROUP

FINANCIALINCLUSION


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Banks have played a critical role in the economic development ofsome developed countries such as Japan and Germany and most ofthe emerging economies including India. Banks today are importantnot just from the point of view of economic growth, but also

financial stability. In emerging economies, banks are special forthree important reasons. First, they take a leading role in developingother financial intermediaries and markets. Second, due to theabsence of well-developed equity and bond markets, the corporatesector depends heavily on banks to meet its financing needs. Finally,in emerging markets such as India, banks cater to the needs of a vastnumber of savers from the household sector, who prefer assured

income and liquidity and safety of funds, because of theirinadequate capacity to manage financial risks.

Conclusion


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18537500 commercial bank

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