Professional Documents
Culture Documents
Jaikumar Laxminarayan
14th August 2006
What is Banking
• Banking Regulation Act, 1949, section 5 (b) -
“Accepting for the purpose of lending or investment, of deposits of
money from the public, repayable on demand or otherwise, and
withdrawable by cheque, draft order or otherwise”
• Customers Perspective -
Return, Safety, Convenience, Record of Transactions
• Customers Perspective -
Meeting the requirement for funds
• Banks Perspective -
– Earn a profit to service the share capital
– Deploy funds mobilised through Liability products
– Earn a return to service the Liability Products
– Participate in building the economy - social banking etc *
• Capital
• Retained Earnings
Credit - Deposit Ratio
• Deposits - Its Nature
• Refinance
• Credit Control by Central Bank (RBI)
• Demand for Credit & Seasonal Variations
• Risk Taking Capacity / Risk Perceptions of the Bank ***
Financial Ratios
Lending Norms
Margin Requirements
• Safety
• Price Stability
• Easy Marketability
• Convenience
• Easy Valuation
• No Additional Responsibility
• Easy to Ascertain the Title to Property *
• Lien
• Pledge
• Hypothecation
• Mortgage
• Assignment *