banking in india
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Banking In India
07-Jul-15
• Vedas • Texts of Manu and Kautilya• East India Company – Bank of Hindustan 1770• Presidency Banks – Calcutta, Bombay, Madras• Imperial Bank – by amalgamating the three• Allahabad Bank – 1865• Alliance Bank 1875• Oudh Commercial Bank 1880• Punjab Bank 1894• People Bank 1901• Reserve Bank of India 1935 (nationalised in 1949)• 648 Commercial Banks in 1947• Banking Companies Act 1949
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Types of Banks• Scheduled Banks (Public Sector Banks)
– Nationalised Banks (19 July 1969)– State Bank of India 1 July 1955 (Travancore, Patiala, Hyderabad, Mysore, Bikner & Jaipur)
Indore, Saurashtra merged. – Regional rural Banks 1975– Private Sector Banks
• Non Scheduled Banks – 4 nos• Industrial Banks – IDBI, EXIM Bank..• SIDBI• Cooperative Banks• Local Area Banks• NABARD• IRCI (Ind Reconstruction Corporation) – IRBI• IIBI (Ind Invest. Bank of India)• National Housing Bank
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Banks for Economic Development• Stimulation of Savings• Capital formation• Agricultural Development• Support entrepreneurs • Small scale industries
– Monetization of debts– Open new branches
• International trade• Create more employment• Influence economic activities
– Variation of interest rate– Availability of credit
• Encouraging right kind of industries• Balanced Development
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Functions of Bank
• Primary Functions– Deposits– Loans and Advances– Credit Creation– Cheques / Plastic Cards– Fund Transfer (TT, DD, RTGS, Online
• Secondary Functions– Agency Services– General Utility Functions
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Types of Deposits
• Savings• Fixed• Current• Recurring• Home safe
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Types of Loans
• Loans• Overdraft• Cash Credit• Discounting• Money at Call / Short Notice• Consumer Credit• Miscellaneous Advances
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Banks as Agents
• Collection agents• Collection of dividends• Trustee / Executor• Standing Order executor• Sale / Purchase of Securities (D-Mat a/c)• Remittances• Deals foreign exchange• Bullion Trade• Agent for Government• As administrator07-Jul-15
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General Utility Services of Banks• Safe custody of valuable• Locker facility• Letter of Credit• Fund Transfer• Information provider• Referee / mediator• Share underwriting• Gift cheque issue• Foreign exchange• Travellers’ cheque• Credit Cards• Collection of Statistics
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Innovative Services
• ATMs / CDMs• Credit Cards• Tele Banking• E Banking• M Banking• RTGS (Real Time Gross Settlement) System• Bancassurance• Electronic Clearing Services07-Jul-15
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Central Bank (RBI)
• Monopoly of note issue• Banker, Agent and Advisor to Government• Custodian of Cash Reserve of Commercial
Banks• Custodian of Forex reserve• Lender of Last Resort• Clearing House Function• Credit Control
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Recent Trends
• Banking Regulation Act 1949• Creation of SBI – 1955• Nationalisation of Banks – Banking Law
Amendment Act – 1968• Lead Bank Scheme• Deposit Insurance• Credit Guarantee • Micro Finance• Financial Inclusion07-Jul-15