INTRODUCTION TO THE FINANCIAL SYSTEM HISTORY OF BANKING NATIONALIZATION OF BANKS SCOPE & SIGNIFICANCE OF BANKING IN INDIA TYPES OF BANKS

FUNCTIONS OF BANKS INCREASED SERVICE OFFERINGS IN BANKS ROLE OF BANKS IN

 INDUSTRIAL FINANCING/ CORPORATE FINANCING  MONEY MARKET  INTERNATIONAL TRADE

COMPETITORS TO BANKING SECTOR CONCLUSION LEARNING EXPERIENCE BIBLIOGRAPHY

FINANCI AL INSTRUM ENTS

FINANCI AL MARKET S

FINANCI AL INSTITUT IONS

FINANCI AL REGULA TORS

ORGANIZED SECTOR

UNORGANIZED SECTOR

INDIVIDUAL/ FAMILY-OWNED/ INDIGENOUS BANKERS & MONEY LENDERS/ PAWN BROKERS/ TRADERS/ CHIT FUNDS

1ST BANK -> GENERAL BANK OF INDIA NEXT -> BANK OF HINDUSTAN & BENGAL BANK EAST INDIA COMPANY
|PRESIDENCY BANK OF BENGAL (1809) BANKS} BANK OF BOMBAY (1840) BANK OF MADRAS (1843)

 IN 1920, THESE 3 BANKS AMALGAMATED

TO FORM IMPERIAL BANK OF INDIA

ALLAHABAD BANK, PNB, BANK OF INDIA, CENTRAL BANK OF INDIA, BANK OF BARODA, CANARA BANK, INDIAN

INDIAN BANKING SECTOR REFORMS WERE UNDERTAKEN BY GOVT. NEED FOR A CENTRAL AUTHORITY FOR BANKS WAS FELT RBI WAS ESTABLISHED IN THE YEAR 1935 UNDER THE RESERVE BANK OF INDIA ACT, 1934 BANKING COMPANIES ACT, 1949 1949 : RBI WAS NATIONALIZED & THUS, FULLY OWNED BY THE GOVERNMENT OF INDIA

1955 : NATIONALISATION OF STATE BANK OF INDIA (PREVIOUSLY KNOWN AS IMPERIAL BANK OF INDIA) 1959 : NATIONALISATION OF SBI SUBSIDIARIES. 1969 : NATIONALISATION OF 14 MAJOR BANKS. 1975 : CREATION OF REGIONAL RURAL BANKS. 1980 : NATIONALISATION OF SIX BANKS

DESPITE THE PROVISIONS, CONTROL AND REGULATIONS OF RESERVE BANK OF INDIA, BANKS IN INDIA EXCEPT THE STATE BANK OF INDIA, CONTINUED TO BE OWNED AND OPERATED BY PRIVATE PERSONS THE GOVERNMENT OF INDIA ISSUED AN ORDINANCE AND NATIONALISED THE 14 LARGEST COMMERCIAL BANKS WITH EFFECT FROM THE MIDNIGHT OF JULY 19, 6 1969.

REDUCE CONTROL & MONOPOLIES IN PRIVATE HANDS PROVISION OF CREDIT TO AGRICULTURE, SSI TURNED DOWN-> PRE NATIONALIZATION NO INTEREST IN ESTABLISHING OFFICES IN SEMI-URBAN & RURAL AREAS PRE NATIONALIZATION

THE STATED REASON FOR THE NATIONALIZATION WAS TO GIVE THE GOVERNMENT MORE CONTROL OF CREDIT

ENCOURAGES SAVINGS INTERMEDIARY PAYMENT FACILITATED BY CHEQUES INSTEAD OF CURRENCY. PROVIDES LOANS AND ADVANCES FACILITATES IMPORT EXPORT TRANSACTIONS. NATIONAL DEVELOPMENT STANDARD OF LIVING
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Central Bank [RBI]

Specialized Banks

Commercial Banks

Co-operative Banks

Developmental Banks

ESTABLISHED ON APRIL 1, 1935 IN ACCORDANCE WITH THE PROVISIONS OF THE RESERVE BANK OF INDIA ACT, 1934 MAIN FUNCTIONS
 MONETARY AUTHORITY  REGULATOR AND SUPERVISOR OF THE FINANCIAL    

SYSTEM MANAGER OF FOREIGN EXCHANGE ISSUER OF CURRENCY DEVELOPMENTAL ROLE RELATED FUNCTIONS
BANKER TO THE GOVERNMENT BANKER TO BANKS

BFS BOARD FOR FINANCIAL SUPERVISION

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RBI

SCHEDULE D BANKS

SBI & ITS ASS OCIA TES

OTH ER NATI ONA LIZE D BAN KS

FOR EIGN BAN KS

PRIV ATE SECT OR BAN KS

COOPE RATI VE BAN KS

REGI ONA L RUR AL BAN KS 11

Commercial Banks

COMMERCIAL BANKS ARE BANKING INSTITUTIONS THAT ACCEPT DEPOSITS AND GRANT SHORT-TERM LOANS AND ADVANCES TO THEIR CUSTOMERS GIVE MEDIUM-TERM AND LONG-TERM Public sector LOAN TO BUSINESS ENTERPRISES & Banks Private (IN ALSO TO INDIVIDUALSSector CASE OF Banks HOME LOANS) Foreign Banks
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THESE BANKS DO NOT ACCEPT DEPOSITS FROM PUBLIC THEY ARE ONLY SET UP BY THE CENTRAL BANK IN ORDER TO PROVIDE MEDIUM AND LONG TERM FINANCE. THIS FINANCE IS EXTENDED TO THE COMPANIES WHO ALL ARE IN THE |DEVELOPMENT} PHASE OFSTAT THEIR ACTIVITIES E INDIA

LEVEL
IDBI IFCI ICICI IRBI SIDBI

LEVEL
SFC s SIDC/SIIC

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WHEN A CO-OPERATIVE SOCIETY ENGAGES ITSELF IN BANKING BUSINESS IT IS CALLED A CO-OPERATIVE BANK THE SOCIETY HAS TO OBTAIN A LICENCE FROM THE RESERVE BANK OF INDIA BEFORE STARTING BANKING BUSINESS AS REGARDS BANKING BUSINESS, THE SOCIETY MUST FOLLOW THE GUIDELINES SET AND ISSUED BY THE RESERVE BANK OF INDIA 14

THERE ARE SOME BANKS, WHICH CATER TO THE REQUIREMENTS AND PROVIDE OVERALL SUPPORT FOR SETTING UP BUSINESS IN SPECIFIC AREAS OF ACTIVITY. EXIM BANK, SIDBI AND NABARD ARE EXAMPLES OF SUCH BANKS. THEY ENGAGE THEMSELVES IN SOME SPECIFIC AREA OR ACTIVITY AND THUS, ARE CALLED SPECIALISED BANKS. 15

PUBLIC SECTOR BANKS

TSTATE BANK GROUP; ALLAHABAD BANK; BANK OF BARODA; CANARA BANK; CENTRAL BANK OF INDIA; PNB; SYNDICATE BANK; UCO BANK; INDIAN OVERSEAS BANK; ORIENTAL BANK OF COMMERCE; DENA BANK; UNION BANK OF INDIA; UNITED BANK OF INDIA; CORPORATION BANK; PUNJAB & SIND BANK; BANK OF INDIA; INDIAN BANK; VIJAYA BANK T CATHOLIC SYRIAN BANK; CITY UNION BANK; DHANALAXMI BANK; FEDERAL BANK; JAMMU& KASHMIR BANK; KARNATAKA BANK; KARUR VYASA BANK; NAINITAL BANK; LAKSHMI VILAS BANK; SOUTH INDIAN BANK; AXIS BANK; HDFC BANK; ICICI BANK; INDUSIND BANK; ING VYSYA BANK; KOTAK MAHINDRA BANK; YES BANK T ABN AMRO BANK; AMERICAN EXPRESS BANK; HSBC; DEUTSCHE BANK; STANDARD CHARTED BANK; ETC.

PRIVATE SECTOR BANKS

FOREIGN BANKS

CO-OPERATIVE BANKS

T ADARSH CO-OPERATIVE BANK LTD; SADHNA SAHAKARI BANK LTD; ETC.

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PRIMARY FUNCTIONS
 BORROWING ACTIVITIES ACCEPTING

DEPOSITS FROM PUBLIC.  LENDING ACTIVITIES INDIVIDUALS, AGRICULTURE, SMALL ENTERPRISES, EDUCATIONAL LOANS, HOUSING LOANS

AGENCY FUNCTIONS
 COLLECTION OF CHEQUES, DIVIDEND

WARRANTS, TRANSFER OF FUNDS, REMITTANCES BY MAIL  ISSUE OF TRAVELLERS CHEQUES, CREDIT

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ATMS ONLINE BANKING TELE-BANKING MOBILE BANKING

 BILL PAYMENTS  FUND TRANSFERS  CHECK BALANCES  BALANCE ENQUIRY  LAST THREE

SMS BANKING

TRANSACTIONS  CHEQUE PAYMENT STATUS  CHEQUE BOOK REQUEST  STATEMENT REQUEST

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SIDBI IDBI IFCI NABARD ICICI

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RBI IS THE CONTROLLING AUTHORITY BOTH PUBLIC & PRIVATE SECTOR BANKS ARE ALLOWED TO PARTICIPATE IN THIS MARKET MONEY MARKET DENOTES INTER-BANK MARKET WHERE THE BANKS BORROW AND LEND AMONG THEMSELVES TO MEET THE SHORT TERM CREDIT AND DEPOSIT NEEDS OF THE ECONOMY. RATE OF INTEREST IN MM IS AN 20

 BANKERS

DRAFT CREDIT

LETTER OF WIRE

TRANSFERS
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POST OFFICE INSURANCE SECTOR FOREIGN BANKS

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INDIAN BANKING SECTOR PLAYS VITAL ROLE IN THE DEVELOPMENT OF THE NATION IT IS ONE OF THE HIGHEST GENERATORS OF EMPLOYMENT IT PLAYS A VITAL ROLE IN THE DEVELOPMENT OF INDUSTRIES (SMALL, MEDIUM & LARGE SCALE), AGRICULTURE & ALL OTHER PRIORITY SECTORS. IN SHORT, IT IS INEVITABLE !

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