Changing View of Banking Sector In India

Presented By:Ashish Singhal

 HISTORY
PHASE I:- The General Bank of India was set up in the year 1786.
Next came Bank of Hindustan and Bengal Bank. The East of India Company established Bank of Bengal (1809), Bank of Bombay (1840) and bank of madras (1843) as independent units and called it Presidency Banks.

PHASE II:- Nationalization of Imperial Bank of India with extensive

banking facilities on a large scale specially in rural and semi-urban areas. It formed State Bank of India to act as the principal agent of RBI and to handle banking transaction of the Union and State Governments all over the country. Seven banks forming subsidiary of State Bank of India was nationalized in 1960 on 19th July, 1969, major process of nationalization was carried out. 14 major commercial banks in the country was nationalized.

PHASE III:- This phase has introduced many more products and
facilities in he banking sector in its reforms measure. In 1991, under the chairmanship of M Narasimhama, a committee was set up by his name which worked for the liberalization of banking practices.

 WHAT IS BANKING
Bank is an institution which trades in money, an establishment for the deposits, custody and issue of money, as also for making loans and discounts and facilitating the transmission of remittances from one place to another.

Saving Bank : Running account for saving with restriction in

number of withdrawal.

Current Account : Running account without restriction on

number of withdrawals.

Term Deposits : Deposits of an amount for a fixed period

where interest is paid monthly/Quarterly.

Special Term Deposit : Deposit of an amount for a fixed

period where interest is compounded (capitalized) and paid on maturity.

Recurring Deposit : Regular (Monthly) deposits of a fixed

amount for a fixed period.

ESSENTIALS OF SOUND BANKING SYSTEM

Stability:

Liquidity: Bank failures Liquidity means damage the the capacity to whole economy promptly meet by destroying the demands of the general Depositors. confidence of This can be the people in done only by such situations. Bank must keeping such therefore cash or near maintain liquidity cash.
and refrain from riskless lending or investment.

Flexiblity: Both the deposit and credit systems should be kept so flexible that they can meet the varying psychological requirements and business needs of the customers.

Dispersal: Banking facilities should not get concentrated in a small region but get dispersed over the whole country to enable equitable regional growth.

Profitablity: The responsibility to share holders and optional business choices in raising resources and extending credit facility.

A Decade of change and evolution

Pre-reform
Extensive Regulation Focus on Industrial Sector Highly segmented Public Sector dominance

The 1990s
Liberalization Globalization Structural Change service

Today Resilient industry Buoyant services sector

Indian economy

Financial Sector

Opening up of various sub-sectors Private sector participation

Diversified financial group Globally benchmarked

The Banking Sector Today

Depth
Countrywide coverage Large number of players Increasingly sophisticated financial markets

Diversification
Emergence of integrated players Diversifying capital deployment Leveraging synergies

Technology

Regulation
Robust regulatory system aligned to international standards Efficient monetary management

Increasingly use of technology in operations Poised to expand and deepen technology usage

New CTS Cheque Book

In a circular to banks, RBI said, Residual non-CTS2010 Standard cheque that get presented in the clearing system beyond this extended period (March 2013) will continue to be accepted for clearing but will be cleared at less frequent intervals. What is CTS?

CTS standard cheque are aimed at enhancing customer safety and facilitating easier processing. Under the CTS system, the physical movement of cheque between banks will be eliminated. In addition to the electronic image, certain relevant information is also transmitted, such as date of presentation, presenting bank details, data on the MICR band.

White Label ATM (WLA)

White Label ATM (WLA) operator is a non-bank entity which can set up, own and operate an automated teller machine (ATM) as extended delivery channels. The Reserve bank of India has given in-principle approval to seven companies to roll out White Label ATMs on April, 2013. Seven companies have been given authorization (to set up WLAs) while five were given in December last year, taking the total to 12. As soon as they get their act together, they will be in operation, said Vijay Chugh, Chief General Manager, Reserve Bank of India, at the sidelines of a conference hosted by Discover Financial Services and National Payments Corporation of India.

Enhance Security in Pass Book

The Reserve Bank directed all banks to offer the pass book facility, without any charges, to all customers with savings account. "It has come to our notice that some banks are not issuing pass books to their savings banks account holders (individuals) and only issue a computer generated account statement even when the customer desires pass book facility. Banks may note that the above prohibition and relaxation shall also extend to drafts, pay orders and bankers.

Plastic Money: Rs. 10 notes in polymer on trial basis

Government will introduce one billion pieces of Rs 10 bank notes made of plastic on a field trial basis in five cities. It has been decided by the government and the RBI (Reserve Bank of India) to introduce one billion pieces of Rs. 10 notes in polymer/plastic on a field trial basis. The minister said the field trail will be conducted in five cities - Kochi, Mysore, Jaipur, Bhubaneswar and Shimla with varied geographical locations and climatic conditions.

Government's Direct cash transfer scheme

About Direct cash transfer scheme:-

It is a poverty reduction measure in which government subsidies and other benefits are given directly to the poor in cash rather than in the form of subsidies.
What are its benefits? It can help the government reach out to identified beneficiaries and can plug leakages. Currently, ration shop owners divert subsidized PDS grains or kerosene to open market and make fast buck. Such Leakages could stop. The scheme will also enhance efficiency of welfare schemes.

How is it implemented? The money is directly transferred into bank accounts of beneficiaries. LPG and kerosene subsidies, pension payments, scholarships and employment guarantee scheme payments as well as benefits under other government welfare programs will be made directly to beneficiaries. The money can then be used to buy services from the market. For ex. if subsidy on LPG or kerosene is abolished and the government still wants to give the subsidy to the poor, the subsidy portion will be transferred as cash into the banks of the intended beneficiaries.

CURRENT STATUS AND DEVELOPMENT OF THE INDIAN BANKING SECTOR

The Indian economys liberalization in the early 1990s has resulted in the conception of various private sector Banks. This has sparked a boom in the countrys banking sector in the past two decades4.
The revenue of Indian banks grew four-fold from US$ 11.8 billion to US$ 46.9 billion, The profit after tax rose nearly nine-fold from US$ 1.4 billion to US$ 12 billion over 2001-105. This growth was driven primarily by two factors:I. The influx of Foreign Direct Investment (FDI) of up to 74 per cent with certain restrictions4. II. The conservative policies of the Reserve Bank of India (RBI), which have shielded Indian banks from recession and global economic turmoil.

Technological innovation in Banking sector:Satellite Banking

Plastic Money Phone Banking

Mobile Banking

ATM
Computerization Virtual bankingdont visit the branch
Development of Distribution Channels

Insurance Product

Conclusion:From the above we can conclude that, As the bank is providing many schemes in Rural and Urban sectors and increasing smoothness in transactions. Government also help to provide more security to the consumers. And also provide Direct cash transfer scheme to the Rural consumers. The working procedure which has been existed in the bank is really nice in the nature. The staff which is working in the bank is very co-operative in natures and they are working at their best level and providing best kind of services to its customers. As the employees are taking part in the decision making process so they are not having any complaint with the management.

THANK YOU