Submitted to: Prof.

MARYA WANI

Presented by:

As per Section 5(b) of Banking Regulation Act, 1949 , banking means the accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise, and can withdraw by cheque, draft, order or otherwise

Origin

18th century
First banks

General bank(1786)
Oldest bank

Bank of Hindusthan(1790)

State bank of India(SBI)

Originated in the Bank of Calcutta in June 1806 Bank of Bombay, Bank of Madras and Bank of Bengal merged in 1921 to form Imperial bank In 1955 Imperial bank was transformed into State Bank of India.

1949

The Reserve Bank of India was nationalized on January 1, 1949

1949

In 1949, the Banking Regulation Act was introduced which empowered the RBI to regulate, control, and inspect all the Indian banks .
The Banking Regulation Act :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.

1949

Banks in India except the State Bank of India continued to be owned and operated by private persons till 1969 Indira Gandhi in the annual conference of the All India Congress Meeting put forward a paper entitled "Stray thoughts on Bank Nationalisation." The Government of India issued an ordinance on July 19, 1969 Bill got the presidential approval on 9 August 1969. A second stage of nationalization started in 1980

In 1991 the Narasimha Rao government brought the policy of liberalization Licensed a small number of private banks.

Relaxation in the norms for Foreign Direct Investment, privatization

Foreign direct investment growth

US$132million

US$33billion 2005

US$197billion 2011

1991

Cities have risen in prominence NOIDA Gurgaon Pune Bangaluru

GDP of India has risen rapidly since 1991

The entire organized banking system comprises of scheduled and non-scheduled banks

Largely, this segment comprises of the scheduled banks, with the unscheduled ones forming a very small component.

Banking needs of the financially excluded population is catered to by other unorganized entities distinct from banks, such as, moneylenders, pawnbrokers and indigenous bankers.

A scheduled bank is a bank that is listed under the second schedule of the RBI Act, 1934.
In order to be included under this schedule of the RBI Act, banks have to fulfill certain conditions such as having a paid up capital and reserves of at least 0.5 million and satisfying the Reserve Bank that its affairs are not being conducted in a manner prejudicial to the interests of its depositors. Scheduled banks are further classified into commercial and cooperative banks.

Scheduled commercial banks (SCBs) account for a major proportion of the business of the scheduled banks. SCBs in India are categorized into the five groups based on their ownership and/or their nature of operations. Nationalized banks and SBI and associates , together form the public sector banks group and control around 70% of the total credit and deposits businesses in India.

Private sector banks include the old private sector banks and the new generation private sector banks- which were incorporated according to the revised guidelines issued by the RBI regarding the entry of private sector banks in 1993.

Foreign banks are present in the country either through complete branch/subsidiary route presence or through their representative offices. At end-June 2009, 32 foreign banks were operating in India with 293 branches. Besides, 43 foreign banks were also operating in India through representative offices.
Abn Amro Abu Dhabi Commercial Bank Bank International Indonesia Bank of America Bank of Ceylon

Regional Rural Banks (RRBs) were set up in September 1975 in order to develop the rural economy by providing banking services in such areas by combining the cooperative specialty of local orientation and the sound resource base which is the characteristic of commercial banks. Regional Rural Banks (RRB)are Regulated by the Rural Planning and Credit Department of Government of India and supervised by NABARD.
(1) Madhya Bharat Gramin Bank (Madhya Pradesh, India (2) Assam Gramin Vikash Bank (Assam, India) (3) Durg Rajnandgaon Gramin Bank( Chhattisgarh, India) (4) Himachal Gramin Bank (Himachal Pradesh, India) (5) South Malabar Gramin Bank (Kerala, India)

 Scheduled cooperative banks in India can be broadly classified into urban credit cooperative institutions and rural cooperative credit institutions. Rural cooperative banks undertake long term as well as short term lending. Credit cooperatives in most states have a three tier structure (primary, district and state level).
1.Ahmedabad Mercantile Co-Op Bank Ltd. 2.Amanath Co-operative Bank Ltd. Bangalore

Non-scheduled banks also function in the Indian banking space, in the form of Local Area Banks (LAB).

Local area banks are banks that are set up under the scheme announced by the government of India in 1996, for the establishment of new private banks of a local nature; with jurisdiction over a maximum of three contiguous districts.

Reserve Bank Of India (RBI)

RBIs subsidiaries Body

Scheduled /non scheduled commercial Bank

Public

Private

Higher authority of Indian banking industry

Regulation and credit control

Acting as government financial advisor Bank of the banks

Retail banking:

It includes exposures to

individuals or small businesses. The retail portfolio of banks accounted for around 21.3% of the total loans and advances of SCBs as at endMarch 2009. The largest players in retail banking in India are ICICI Bank, SBI, PNB, BOI, HDFC and Canara Bank.

Wholesale banking:

Wholesale banking includes high ticket exposures primarily to corporate.

Treasury Operations: Treasury operations include investments in debt market (sovereign and corporate), equity market, mutual funds, derivatives, and trading and forex operations. These functions can be proprietary activities, or can be undertaken on customers account. Treasury operations are important for managing the funding of the bank. Other Banking Businesses: This is considered as

a residual category which includes all those businesses of banks that do not fall under any of the aforesaid categories. This category includes Para banking activities like hire purchase activities, leasing business, merchant banking, factoring activities etc.

BANK RATE

CRR

Repo Rates

Reverse Repo Rates

SLR

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