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Banking in India
Banking in India originated in the last decades of the 18th century. The first banks were The
General Bank of India, which started in 1786, and Bank of Hindustan, which started in 1790;
both are now defunct. The oldest bank in existence in India is the State Bank of India, which
originated in the Bank of Calcutta in June 1806, which almost immediately became the Bank of
Bengal. This was one of the three presidency banks, the other two being the Bank of
Bombay and the Bank of Madras, all three of which were established under charters from the
British East India Company. For many years the Presidency banks acted as quasi-central banks,
as did their successors. The three banks merged in 1921 to form the Imperial Bank of India,
which, upon India's independence, became the State Bank of India.
History
Indian merchants in Calcutta established the Union Bank in 1839, but it failed in 1848 as a
consequence of the economic crisis of 1848-49. The Allahabad Bank, established in 1865 and
still functioning today, is the oldest Joint Stock bank in India.(Joint Stock Bank: A company that
issues stock and requires shareholders to be held liable for the company's debt) It was not the
first though. That honor belongs to the Bank of Upper India, which was established in 1863, and
which survived until 1913, when it failed, with some of its assets and liabilities being transferred
to the Alliance Bank of Simla.
When 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 Puducherry, then a French colony, followed. HSBC established itself
in Bengal in 1869. Calcutta was the most active trading port in India, mainly due to the trade of
the British Empire, and so became a banking center.
The first entirely Indian joint stock bank was the Oudh Commercial Bank, established in 1881
in Faizabad. It failed in 1958. The next was the Punjab National Bank, established in Lahore in
1895, which has survived to the present and is now one of the largest banks in India.
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Around the turn of the 20th Century, the Indian economy was passing through a relative period
of stability. Around five decades had elapsed since the Indian Mutiny, and the social, industrial
and other infrastructure had improved. Indians had established small banks, most of which
served particular ethnic and religious communities.
The presidency banks dominated banking in India but there were also some exchange banks and
a number of Indian joint stock banks. All these banks operated in different segments of the
economy. The exchange banks, mostly owned by Europeans, concentrated on financing foreign
trade. Indian joint stock banks were generally under capitalized and lacked the experience and
maturity to compete with the presidency and exchange banks. This segmentation let Lord Curzon
to observe, "In respect of banking it seems we are behind the times. We are like some old
fashioned sailing ship, divided by solid wooden bulkheads into separate and cumbersome
compartments."
The period between 1906 and 1911, saw the establishment of banks inspired by
the Swadeshi movement. The Swadeshi movement inspired local businessmen and political
figures to found banks of and for the Indian community. A number of banks established then
have survived to the present such as Bank of India, Corporation Bank, Indian Bank, Bank of
Baroda, Canara Bank and Central Bank of India.
The fervour of Swadeshi movement lead to establishing of many private banks in Dakshina
Kannada and Udupi district which were unified earlier and known by the name South Canara (
South Kanara ) district. Four nationalised banks started in this district and also a leading private
sector bank. Hence undivided Dakshina Kannada district is known as "Cradle of Indian
Banking".
During the First World War (1914-1918) through the end of the Second World War (1939-1945),
and two years thereafter until the independence of India were challenging for Indian banking.
The years of the First World War were turbulent, and it took its toll with banks simply collapsing
despite the Indian economy gaining indirect boost due to war-related economic activities. At
least 94 banks in India failed between 1913 and 1918 as indicated in the following table:
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YearsNumber of banks
that failed
Authorised capital
(Rs. Lakhs)
Paid-up Capital
(Rs. Lakhs)
1913 12 274 35
1914 42 710 109
1915 11 56 5
1916 13 231 4
1917 9 76 25
1918 7 209 1
Post-Independence
The partition of India in 1947 adversely impacted the economies of Punjab and West Bengal,
paralyzing banking activities for months. India's independence marked the end of a regime of
the Laissez-faire for the Indian banking. The Government of India initiated measures to play an
active role in the economic life of the nation, and the Industrial Policy Resolution adopted by the
government in 1948 envisaged a mixed economy. This resulted into greater involvement of the
state in different segments of the economy including banking and finance. The major steps to
regulate banking included:
The Reserve Bank of India, India's central banking authority, was nationalized on January 1,
1949 under the terms of the Reserve Bank of India (Transfer to Public Ownership) Act, 1948
(RBI, 2005b).[Reference www.rbi.org.in]
In 1949, the Banking Regulation Act was enacted which empowered the Reserve Bank of
India (RBI) "to regulate, control, and inspect the banks in India."
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The Banking Regulation Act also provided that no new bank or branch of an existing bank
could be opened without a license from the RBI, and no two banks could have common
directors.
Nationalization
Despite the provisions, control and regulations of Reserve Bank of India, banks in India except
the State Bank of India or SBI, continued to be owned and operated by private persons. By the
1960s, the Indian banking industry had become an important tool to facilitate the development of
the Indian economy. At the same time, it had emerged as a large employer, and a debate had
ensued about the nationalization of the banking industry. Indira Gandhi, then Prime Minister ofIndia, expressed the intention of the Government of India in the annual conference of the All
India Congress Meeting in a paper entitled "Stray thoughts on Bank Nationalisation." The
meeting received the paper with enthusiasm.
Thereafter, her move was swift and sudden. The Government of India issued an ordinance
and nationalised the 14 largest commercial banks with effect from the midnight of July 19,
1969. Jayaprakash Narayan, a national leader of India, described the step as a "masterstroke of
political sagacity." Within two weeks of the issue of the ordinance, the Parliament passed the
Banking Companies (Acquisition and Transfer of Undertaking) Bill, and it receivedthe presidential approval on 9 August 1969.
A second dose of nationalization of 6 more commercial banks followed in 1980. The stated
reason for the nationalization was to give the government more control of credit delivery. With
the second dose of nationalization, the Government of India controlled around 91% of the
banking business of India. Later on, in the year 1993, the government merged New Bank of
India with Punjab National Bank. It was the only merger between nationalized banks and
resulted in the reduction of the number of nationalised banks from 20 to 19. After this, until the
1990s, the nationalised banks grew at a pace of around 4%, closer to the average growth rate of
the Indian economy.
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Liberalization
In the early 1990s, the then Narsimha Rao government embarked on a policy of liberalization,
licensing a small number of private banks. These came to be known as New Generation tech-
savvy banks, and included Global Trust Bank (the first of such new generation banks to be setup), which later amalgamated with Oriental Bank of Commerce, Axis Bank(earlier as UTI
Bank), ICICI Bank and HDFC Bank. This move, along with the rapid growth in the economy of
India, revitalized the banking sector in India, which has seen rapid growth with strong
contribution from all the three sectors of banks, namely, government banks, private banks and
foreign banks.
The next stage for the Indian banking has been set up with the proposed relaxation in the norms
for Foreign Direct Investment, where all Foreign Investors in banks may be given voting rights
which could exceed the present cap of 10%,at present it has gone up to 74% with some
restrictions.
The new policy shook the Banking sector in India completely. Bankers, till this time, were used
to the 4-6-4 method (Borrow at 4%;Lend at 6%;Go home at 4) of functioning. The new wave
ushered in a modern outlook and tech-savvy methods of working for traditional banks.All this
led to the retail boom in India. People not just demanded more from their banks but also received
more.
Currently (2007), banking in India is generally fairly mature in terms of supply, product range
and reach-even though reach in rural India still remains a challenge for the private sector andforeign banks. In terms of quality of assets and capital adequacy, Indian banks are considered to
have clean, strong and transparent balance sheets relative to other banks in comparable
economies in its region. The Reserve Bank of India is an autonomous body, with minimal
pressure from the government. The stated policy of the Bank on the Indian Rupee is to manage
volatility but without any fixed exchange rate-and this has mostly been true.
With the growth in the Indian economy expected to be strong for quite some time-especially in
its services sector-the demand for banking services, especially retail banking, mortgages and
investment services are expected to be strong. One may also expect M&As, takeovers, and asset
sales.
In March 2006, the Reserve Bank of India allowed Warburg Pincus to increase its stake in Kotak
Mahindra Bank (a private sector bank) to 10%. This is the first time an investor has been allowed
to hold more than 5% in a private sector bank since the RBI announced norms in 2005 that any
stake exceeding 5% in the private sector banks would need to be vetted by them.
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In recent years critics have charged that the non-government owned banks are too aggressive in
their loan recovery efforts in connection with housing, vehicle and personal loans. There are
press reports that the banks' loan recovery efforts have driven defaulting borrowers to suicide.
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Introduction
The banking section will navigate through all the aspects of the Banking System in India. It will
discuss upon the matters with the birth of the banking concept in the country to new playersadding their names in the industry in coming few years.
The banker of all banks, Reserve Bank of India (RBI), the Indian Banks Association (IBA) andtop 20 banks like IDBI, HSBC, ICICI, ABN AMRO, etc. has been well defined under threeseparate heads with one page dedicated to each bank.
However, in the introduction part of the entire banking cosmos, the past has been well explainedunder three different heads namely:
y History of Banking in Indiay
Nationalization of Banks in Indiay Scheduled Commercial Banks in India
The first deals with the history part since the dawn of banking system in India. Government tookmajor step in the 1969 to put the banking sector into systems and it nationalized 14 private banksin the mentioned year. This has been elaborated in Nationalization Banks in India. The last butnot the least explains about the scheduled and unscheduled banks in India. Section 42 (6) (a) ofRBI Act 1934 lays down the condition of scheduled commercial banks. The description alongwith a list of scheduled commercial banks are given on this page.
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Banks In India
In India the banks are being segregated in different groups. Each group has their own benefitsand limitations in operating in India. Each has their own dedicated target market. Few of them
only work in rural sector while others in both rural as well as urban. Many even are only cateringin cities. Some are of Indian origin and some are foreign players.
All these details and many more is discussed over here. The banks and its relation with thecustomers, their mode of operation, the names of banks under different groups and other suchuseful informations are talked about.
One more section has been taken note of is the upcoming foreign banks in India. The RBI hasshown certain interest to involve more of foreign banks than the existing one recently. This stephas paved a way for few more foreign banks to start business in India.
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Banking services in India
With years, banks are also adding services to their customers. The Indian banking industry ispassing through a phase of customers market. The customers have more choices in choosing
their banks. A competition has been established within the banks operating in India.
With stiff competition and advancement of technology, the services provided by banks hasbecome more easy and convenient. The past days are witness to an hour wait before withdrawingcash from accounts or a cheque from north of the country being cleared in one month in thesouth.
This section of banking deals with the latest discovery in the banking instruments along with thepolished version of their old systems.
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Easy Banking
This section is fully dedicated to the Tech Banking. A decade before, it was tough to belief thatbanking secctor will be at a finger tip. Now its possible. A mobile hand set with a connection is
the only instrument needed to make a gateway to your banking transaction, the latest innovationof technology.
Apart from the Mobile Banking, including of SMS Banking, Net Banking and ATMs are themajor steps taken by the banks in India towards modernisation. With all these devises andsystems, there is a complete freedom to experience.
Check your account, transfer your fund, make payments and what more, do anything ofeverything what has been followed in physical banking since ages. But this time no standing forhours in front of cash counter and no time boundation in withdrawing your own money.
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Banking Services for NRIs in India
Almost all the Indian Banks provide services to the NRIs. There are different types of accountsfor them. They are:
y Non-Resident (Ordinary) Account - NRO A/cy Non-Resident (External) Rupee Account - NRE A/cy Non-Resident (Foreign Currency) Account - FCNR A/c
An Indian resident who is earning forign exchange can also maintain Foreign Currency accountin the country with an authorised dealer bank but only to the maximum limit of 50% of suchforeign exchange earnings under the Exchange Earners Foreign Currency Account (EEFC)Scheme.
Some of the FAQs given below will make it easy to understand the services provided by banks tothe NRIs.
FAQ for NRIs
a. What are the special features of each bank account?
b. Can Non Resident accounts be opened/ operated by the Power of Attorney holder inIndia, on behalf of the non-resident?
c. What happens to the status of these accounts when the non-resident holder becomes aperson, resident in India?
d. What are the various facilities available to NRIs/OCBs?
e. Are NRIs permitted to send remittances outside India out of the assets in India that areinherited by them?
f. Can a person of Indian origin acquire any immovable property in India by way ofinheritance?
g. Can NRIs and Overseas Corporate Bodies (OCBs) invest in India?
h. What is the extent and application of Foreign Exchange Management Act (FEMA)?
i. What is the penalty for contravention of FEMA?
j. Can a person of Indian origin resident outside India gift properties acquired earlier interms of the provisions of FERA/FEMA?
k. Can an NRI account be opened in the name of crew members of shipping companies?
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a. What are the special features ofeach bank account?
The special features are as under:
NRO A/c.: The funds, credited to this account, cannot be repatriated outside India in
foreign exchange, without prior permission of the Reserve Bank of India. Interest, earnedis eligible for repatriation outside India, net of Indian taxes. The remittance of interest(net of taxes) will be permitted by the authorised dealer who maintains the account, if theaccount holder makes an application to the authorised dealer, in the prescribed form. NoRBI permission is required for remittance of interest.
NRE A/c.: The funds, standing to the credit of this account, as well as interest earnedthereon, are remittable outside India in free foreign exchange, without permission of theRBI. The interest income is not subject to Indian Income-tax. Credits to the accountsshould be in the form of remittance in foreign exchange from outside India, as well asother funds, which are eligible to be remitted outside India, in free foreign exchange.
Funds, emanating from local sources, are not eligible to be credited to these accounts,unless these funds are otherwise remittable outside India, in terms of the existingExchange Control Regulations.
FCNR A/c.: These accounts can be opened in four foreign currencies:o Pounds Sterling;o US Dollars;o Japanese Yen;o Euro.
For the purpose of opening an account, remittance in foreign exchange, in the samecurrency, should be received in India. The accounts can be opened only as fixed deposits,with a minimum maturity of one year and, a maximum maturity of three years. Theprincipal, as well as interest, earned on these accounts, is remittable outside India, in thesame currency or, in other convertible currency, as desired by the account holder. Theinterest, earned on these deposits, is exempt from Indian Income-tax.
b. Can Non Resident accounts be opened/ operated by the Power of Attorney holder inIndia, on behalf of the non-resident?
The accounts cannot be opened by the Power of Attorney holder in India. However, thelatter can operate the accounts for the purpose of local payments to be made on behalf ofthe non-resident account holder. The Power of Attorney holder is not permitted to makegifts from these accounts and, is not allowed to make remittances outside India.
c. What happens to the status of these accounts when the non-resident holder becomesa person, resident in India?
The accounts are to be re-designed as resident accounts, when the non-resident accountholder becomes a person, resident in India. In the case of fixed deposits opened by theaccount holder, before becoming resident in India, the contracted rate of interest will be
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paid till maturity of the deposits. Similarly, FCNR deposits will be eligible to be held inrespective currencies till maturity of the deposits, even after the non-resident holderbecome a resident in India. He will, however, cease to get tax exemption on interest onthe erstwhile deposits (NRE/FCNR deposits), after he becomes resident in India. Incertain situations, it might be advisable for the account holder to convert the account to a
Resident Foreign Currency Account Deposit (RFC)
d. What are the various facilities available to NRIs/OCBs?
The facilities available to NRIs/OCBs for making investment in India are as follows:o opening and maintenance of bank accounts in India;
o investment in shares and securities of Indian companies, government securities,units of domestic mutual funds and ,deposits with Indian companies/firms;
o investment in immovable properties in India;
o investment in proprietorship/partnership concerns in India.
e. Are NRIs permitted to send remittances outside India out of the assets in India thatare inherited by them?
Yes. RBI will consider application from NRIs for remittance of assets, inherited by themin India. Such remittance may be permitted up to US$ 100,000 per year.
f. Can a person of Indian origin acquire any immovable property in India by way of
inheritance?
A person of Indian origin, resident outside India, may acquire any immovable property inIndia by way of inheritance from a person, resident outside India, who had acquired suchproperty in accordance with the provisions of foreign exchange law in force at the time ofacquisition by him or the provisions of Foreign Exchange Management (Acquisition andTransfer of Immovable Property in India) Regulations, 2000. Immovable property, byway of inheritance, can also be acquired by a person of Indian origin resident outsidefrom a person resident in India.
g. Can NRIs and Overseas Corporate Bodies (OCBs) invest in India?
The Government of India has adopted a liberal policy, with respect to investments byNRIs and OCBs in India. Such investments are allowed, both, through the RBI route andalso through the Government route, i.e., through the Foreign Investment PromotionBoard (FIPB) NRIs and OCBs are permitted to invest up to 100% equity in real estatedevelopment activity and civil aviation sectors. Investment, made by the NRIs and OCBs,are fully repatriable, except in the case of real estate, which has a 3 year lock-in period on
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original investment and, 16% cap on dividend repatriation. For those proposals that donot qualify under the automatic route, Government approval is granted through FIPB.
h. What is theextent and application ofForeign Exchange Management Act (FEMA)?
FEMA extends to the whole of India. It also applies to all branches, offices and agenciesoutside India, owned or controlled by a person, resident in India. It also applies to anycontravention, there under, committed in or, outside India, by any person to whom theAct applies.
i. What is the penalty for contravention ofFEMA?
Any person, contravening FEMA, shall be liable, upon adjudication, to a penalty up tothree times the sum involved in such contravention, where such amount is quantifiable, orup to Rupees Two hundred thousand, where the amount is not quantifiable. In addition,where such contravention is a continuing one, the person will be liable to further penalty,which may extend to Rupees Five thousand for every day after the first day, during which
the contravention continues.
j. Can a person of Indian origin resident outside India gift properties acquired earlierin terms of the provisions ofFERA/FEMA?
Yes. A person of Indian origin resident outside India may transfer residential orcommercial property in India by way of gift to a person resident in India or to a personresident outside India who is a citizen of India or to a person of Indian origin residentoutside India. A Person of Indian origin resident outside India may also transfer by wayof gift agriculture land/farm house/plantation property in India to a person resident inIndia who is a citizen of India.
k. Can an NRI account be opened in the name of crew members of shippingcompanies?
Yes, if their posting is not based in India and they derive their income from other countryin foreign currency.
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Proxy Banking in India
Indian villages were miles away from mutual funds, insurance and even equity trading. Thanksto Internet Kiosk and the ATM duo which has made it possible for rural India. This kiosk hasbeen set up by ICICI Bank in partnership with network n-Logue Communications in remotevillages of Southern part of the country. This is known as Proxi Banking. With the help of fibreoptic cables, this kiosk works on wireless in local loop technology.
Reasons for setting-up of Proxi Banking
y 58% of rural households still do not have bank accounts.
y Only 21% of rural households have access to credit from a formal source.
y 70% of marginal farmers do not have deposit account.
y 87% households have no formal credit.
y Only 1% rural househlods rely on a loan from a financial intermediary. The loans takebetween 24 to 33 weeks to get sanctioned.
y Consumers bribe officials to get loans approved which varies between 10 and 20 per centof the loan amount.
y Branch banking in rurals is a loss-making.
Benefits to rurals
y Small loans given for buying buffaloes.y Loans for setting up a tea shop.y Life and non-life insurance provided.y Weather insurance given to farmers.y Insurance policies sold to farmers like groundnut, castor, soya, paddy crop, etc.
The Proxy Banking is an innovative approach to rural lending and will add to the government'sexpanding base of kisan credit cards and the good old guidelines for agricultural lending.
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Fact Files of Banks in India
The first, the oldest, the largest, the biggest, get all such types of informations about Banking inIndia in this section.
The first bank in India to be given an ISO Certification Canara Bank
The first bank in Northern India to get ISO 9002 certification for their
selected branches
Punjab and Sind
Bank
The first Indian bank to have been started solely with Indian capital Punjab National
Bank
The first among the private sector banks in Kerala to become a scheduledbank in 1946 under the RBI Act
South Indian Bank
India's oldest, largest and most successful commercial bank, offering the
widest possible range of domestic, international and NRI products and
services, through its vast network in India and overseas
State Bank of India
India's second largest private sector bank and is now the largest scheduled
commercial bank in India
The Federal Bank
Limited
Bank which started as private shareholders banks, mostly Europeans
shareholders
Imperial Bank of
India
The first Indian bank to open a branch outside India in London in 1946
and the first to open a branch in continental Europe at Paris in 1974
Bank of India,
founded in 1906 in
Mumbai
The oldest Public Sector Bank in India having branches all over India and
serving the customers for the last 132 years
Allahabad Bank
The first Indian commercial bank which was wholly owned and managed
by Indians
Central Bank of
India
Bank of India was founded in 1906 in Mumbai. It became the first Indian bank to open a branchoutside India in London in 1946 and the first to open a branch in continental Europe at Paris in1974.
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List of banks in India
====Central bank ==== - Central bank and supreme monetary authority.
y 1. Nationalized banks (Public Sector)
y 2. Private Banks
y 3.Scheduled Urban Co-operative Banks
y 4. Non-Scheduled Urban Co-operative Banks
y 5. Indian Banks Abroad
y 6. Foreign banks
6.1 Foreign Banks with Representative Offices in India
1.Nationalized banks (Public Sector)
1. Allahabad Bank
2. Andhra Bank
3. Bank of Baroda
4. Bank of India
5. Bank of Maharashtra
6. Canara Bank
7. Central Bank of India
8. Corporation Bank
9. Dena Bank
10. IDBI Bank
11. Indian Bank
12. Indian Overseas Bank
13. Oriental Bank ofCommerce
14. Punjab National Bank
15. Punjab & Sind Bank
16. Syndicate Bank
17. Union Bank of India
18. UCO Bank
19. United Bank of India
20. Vijaya Bank
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====SBI & associates (Nationalized)=India|State Bank of India (SBI)]]
22. State Bank Bikaner & Jaipur
23. State Bank of Hyderabad
24. State Bank of Mysore
25. State Bank ofPatiala
26. State Bank of Travancore
State Bank of Indore - (merged with SBI in 2010)
State Bank of Saurashtra - (merged with SBI in 2008)
2. Private Banks
Axis Bank (Formerly UTI Bank)
HDFC
Bank
ICICI Bank(Siddhashila)
Kotak Mahindra Bank
Karnataka Bank
Yes Bank
IndusInd Bank
TheNainital Bank Ltd.
ING Vysya Bank
South Indian Bank
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3. Scheduled Urban Co-operative Banks
List of Scheduled Urban Co-operative Bank as on 31-3-2009 as per RBI[1]
Sapthagiri Coop. Bank Chittoor AP India
Bank Main Location
Rani Laxmibai urban Co-op Bank, Jhansi
Ahmedabad Mercantile Co-Op Bank Ltd. Ahmedabad
Kalupur Commercial Coop.Bank Ltd. Kalupur
Madhavpura Mercantile Co-Op Bank Ltd. Madhavpur
Mehsana Urban Co-Op Bank Ltd. Mehsana
Nutan Nagarik Sahakari Bank Ltd. Ahmedabad
Rajkot Nagarik Sahakari Bank Ltd. Rajkot
almora urban co-operative bank ltd. almora
South Indian Bank Tirichur
Sardar Bhiladwala Pardi Peoples Coop Bank Ltd. Bulsar
Surat Peoples Coop Bank Ltd. Surat
Amanath Co-operative Bank Ltd. Bangalore
Andhra Pradesh Mahesh Co-Op Urban Bank Ltd. Andhra Pradesh
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Charminar Coop.Urban Bank Ltd. Hyderabad
Vasavi Coop Urban Bank LImited. Hyderabad
Indian Mercantile Co-op Bank Ltd. Lucknow
Kallappanna Awade Ichalkaranji Janata Sahakari Bank Ltd. Ichalkaranji
Abhyudaya Co-operative Bank Ltd. Mumbai
Bangalore city cooperative bank. Bengaluru
Bassein Catholic Co-operative Bank Limited. Vasai
Bharat Co-operative Bank (Mumbai) Ltd. Mumbai
Bharati Sahakari Bank Limited. Pune
Bombay Mercantile Co-operative Bank Limited. Mumbai
Citizen Credit Co-operative Bank Ltd. Dadar
Cosmos Co-operative Urban Bank Ltd. Pune
Dombivli Nagari Sahakari Bank Ltd. Dombivli
Goa Urban Co-operative Bank Limited. Goa
Greater Bombay Co-operative Bank Limited. Mumbai
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Jalgaon Janata Sahakari Bank Ltd. Jalgaon
Janakalyan Sahakari Bank Ltd. Mumbai
Janalaxmi Co-operative Bank Ltd. Mumbai
Janata Sahakari Bank Ltd. Pune
The Karnataka State Co-Operative Apex Bank Ltd Bengaluru
Kalyan Janata Sahakari Bank Ltd. Kalyan
Karad Urban Co-operative Bank Ltd. Karad
Mahanagar Co-operative Bank Ltd. Mumbai
Mapusa Urban Co-operative Bank of Goa Ltd. Mapusa
Nagar Urban Co-operative Bank Ltd. Ahmednagar
Nasik Merchant's Co-operative Bank Ltd. Nasik
New India Co-operative Bank Ltd. Mumbai
NKGSB Co-operative Bank Ltd. Mumbai
Parsik Janata Sahakari Bank Ltd. Thane
Pravara Sahakari Bank Ltd. Ahmednagar
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Punjab & Maharashtra Co-operative Bank Ltd. Mumbai
Rupee Co-operative Bank Ltd. Pune
Sangli Urban Co-operative Bank Ltd. Sangli
Saraswat Co-operative Bank Ltd. Mumbai
Shamrao Vithal Co-operative Bank Ltd. Mumbai
Solapur Janata Sahakari Bank Ltd. Solapur
Thane Bharat Sahakari Bank Ltd. Thane
Thane Janata Sahakari Bank Ltd. Thane
The Kapol Co-operative Bank Ltd. Mumbai
Zoroastrian Co-operative Bank Ltd. Mumbai
Nagpur Nagrik Sahakari Bank Ltd. Nagpur
Shikshak Sahakari Bank Ltd. Nagpur
The Akola Janata Com.Co-operative Bank Ltd. Akola
The Akola Urban Co-operative Bank Ltd. Akola
The Khamgaon Urban Co-operative Bank Ltd. Khamgaon
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Cuttack Gramya Bank. Cuttack
Cuttack urban Co-operative Bank Ltd.
[ [Cuttack] ]
4. Non-Scheduled Urban Co-operative Banks
List ofNon-Scheduled Urban Co-operative Bank as on 31-3-2010 as per RBI[2]
Bank Main Location
Janaseva Sahakari Bank Ltd., Pune
Vishweshwar Sahakari Bank Ltd., Pune
Sadhna Sahakari Bank Ltd., Pune
Sanmitra Sahakari Bank Ltd., Pune
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5. Indian Banks Abroad
List of subsidiaries of Indian Banks abroad as onNovember 30, 2007
Name of the Bank Name of the Centre
SBI (Canada) Ltd. Toronto Vancouver,Mississauga
SBI (California) Ltd.Los Angeles, Artesia,San Jose (SiliconValley)
SBI Finance Inc. Delaware U.S.A.
SBI International (Mauritius) (Off-shore Bank)Mauritius
Bank of Baroda Uganda) Ltd. Uganda
Bank of Baroda(Kenya) Ltd. Kenya
Bank of Baroda (U.K.) Nominee Ltd. London, UK
BOB (Hong Kong)Ltd.(Converted into Restricted Licensed Bank)Hongkong
Bank of India Finance(Kenya) Ltd. Kenya
IOB Properties Pte Ltd. Singapore
Bank of Baroda(Botswana) Ltd. Gaborone Botswana
Bank of Baroda(Guyana)Inc. Georgetown Guyana (South America)
ICICI Bank UK Ltd London (UK)
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ICICI Bank Canada Ltd Toronto (Canada)
Bank of Baroda (Tanzania) Tanzania
Bank of Baroda (Dubai, Abu Dhabi, Ras Al Khaimah,Deira,Dammam, Salalah, Al Ain)
United Arab Emirates
Bank of Baroda Sultanate of Oman, Muscat,
Bank of Baroda Belgium, Brussels
ICICI Bank Eurasia LLC Russia
PT Bank Indomonex Indonesia
Indian Ocean International Bank Ltd. (IOIB) Mauritius, Port Louis
Punjab National Bank International Limited (PNBIL) United Kingdom, London
Bank of Baroda (Trinidad and Tobago) Limited Trinidad & Tobago
PT Bank Swadesi Tbk Indonesia
Bank of Baroda (Trinidad and Tobago) Limited Trinidad & Tobago
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7. Foreign banks
Banks with branches in India.[4]
ABN AMRO Bank N.V. - Royal Bank of Scotland
Abu Dhabi Commercial Bank Ltd
American Express Bank
Antwerp Diamond Bank
Arab Bangladesh Bank
Bank International Indonesia
Bank of America
Bank of Bahrain & Kuwait
Bank ofCeylon
Bank ofNova Scotia
Bank of Tokyo Mitsubishi UFJ
Barclays Bank
BNPParibas
Calyon Bank
ChinaTrust Commercial Bank
Citibank
DBS Bank
Deutsche Bank
HSBC (Hongkong & Shanghai Banking Corporation)
JPMorgan Chase Bank
Krung Thai Bank
Mashreq Bank
Mizuho Corporate Bank
Oman International Bank
Shinhan Bank
Socit Gnrale
Sonali Bank
Standard Chartered Bank
State Bank of Mauritius
UBS
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VTB[1]
7. (i) Foreign Banks with Representative Offices in India
American Banks
mayur coprative bank limited
Nationalised, Public and Private Banks of India
The page consists of the list of banks operating from india. The list contains both Private and Public sector banks.
Allahabad Bank Deutsche Bank Nedungadi Bank
Andhra Bank Dhanalakshmi Bank Punjab and Maharashtra Co-OperativeBank Ltd.
Bank of Baroda Export-Import Bank of IndiaPunjab National Bank
Bank of Madura Federal Bank Limited South Indian Bank
Bank of Maharashtra Global Trust Bank State Bank of Hyderabad
Bank of Punjab ICICI Bank State Bank of India
Canara Bank IDBI State Bank of Travancore
Catholic Syrian Bank Indian Bank Syndicate Bank
Centurion Bank
Indian Overseas Bank
Times BankCitibank IndusInd Bank Ltd. UCO Bank
Corporation Bank Lakshmi Vilas Bank Union Bank of India
Dena Bank Lord Krishna Bank Vysya Bank
Development CreditBank Ltd.
Mandvi Co-operative BankLtd.
Oriental Bank of Commerce
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Nationalisation of Banks in India
Introduction
After independence the Government of India adopted planned economic development for the
country. Accordingly, five year plans came into existence since 1951. This economic planning
basically aimed at social ownership of the means of production. However, commercial banks
were in the private sector those days. In 1950-51 there were 430 commercial banks. The
Government had some social objectives of planning. These commercial banks failed helping the
government in attaining these objectives. Thus, the government decided to nationalize 14 major
commercial banks on 19th July, 1969. All commercial banks with a deposit base over Rs.50
crores were nationalized. It was considered that banks were controlled by business houses and
thus failed in catering to the credit needs of poor sections such as cottage industry, village
industry, farmers, craft men, etc. The second dose of nationalization came in April 1980 whenbanks were nationalized.
Objectives Behind Nationalization of Banks in India
The nationalization of commercial banks took place with an aim to achieve following major
objectives.
1. Social Welfare: It was the need of the hour to direct the funds for the needy and required
sectors of the Indian economy. Sector such as agriculture, small and village industries were in
need of funds for their expansion and further economic development.
2. Controlling Private Monopolies: Prior to nationalization many banks were controlled by
private business houses and corporate families. It was necessary to check these monopolies in
order to ensure a smooth supply of credit to socially desirable sections.
3. Expansion of Banking: In a large country like India the numbers of banks existing those days
were certainly inadequate. It was necessary to spread banking across the country. It could be
done through expanding banking network (by opening new bank branches) in the un-banked
areas.
4. Reducing Regional Imbalance: In a country like India where we have a urban-rural divide; it
was necessary for banks to go in the rural areas where the banking facilities were not available.In order to reduce this regional imbalance nationalization was justified:
5. Priority Sector Lending: In India, the agriculture sector and its allied activities were the
largest contributor to the national income. Thus these were labeled as the priority sectors. But
unfortunately they were deprived of their due share in the credit. Nationalization was urgently
needed for catering funds to them.
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6. Developing Banking Habits: In India more than 70% population used to stay in rural areas. It
was necessary to develop the banking habit among such a large population.
De
me
rits, Limitations - Bank Nationalization in India
Though the nationalization of commercial banks was undertaken with tall objectives, in many
senses it failed in attaining them. In fact it converted many of the banking institutions in the loss
making entities. The reasons were obvious lethargic working, lack of accountability, lack of
profit motive, political interference, etc. Under this backdrop it is necessary to have a critical
look to the whole process of nationalization in the period after bank nationalization.
The major limitations of the bank nationalization in India are:-
1. Inadequate banking facilities: Even though banks have spread across the country; still many
parts of the country are unbanked. Especially in the backward states such as the Uttar Pradesh,Madhya Pradesh, Chhattisgarh and north-eastern states of India.
2. Limited resources mobilized and allocated: The resources mobilized after the
nationalization is not sufficient if we consider the needs of the Indian economy. Some times the
deposits mobilized are enough but the resource allocation is not as per the expansions.
3. Lowered efficiency and profits: After nationalization banks went in the government sector.
Many times political forces pressurized them. Banking was not done on a professional and
ethical grounds. It resulted into lower efficiency and poor profitability of banks.
4. Increased expenditure: Due to huge expansion in a branch network, large staff administrative
expenditure, trade union struggle, etc. banks expenditure increased to dangerous levels.
5. Political and Administrative Inference: Many public sector banks badly suffered due to the
political interference. It was seen in arranging loan meals. It ultimately resulted in huge non-
performing assets (NPAs) of these banks and inefficiency.
These are several limitations faced by the bank nationalization in India.
Apart from this there are certain other limitations as well, such as weak infrastructure, poor
competitiveness, etc.
But after Economic Reform of 1991, the Indian banking industry has entered into the new
horizons of competitiveness, efficiency and productivity. It has made Indian banks more vibrant
and professional organizations, removing the bad days of bank nationalization.