A Presentation ON

Submitted To:

Indian Banking SectorSubmitted By: Anand Tiwari Richa Singh Kaharwar Tosh Kumar Keshri

Dr. Sujata Parwani

WHAT IS BANK? A Bank is a financial institution whose primary

activity is to act as a payment agent for customer and to borrow and lend money.An institution where one can place and borrow

money and take care of financial affairs; A branch office of such an institution.The first modern bank was founded in Italy in

Genoa in 1406, its name bank of St. George.

FUNCTIONS OF BANKAccepting deposit from public/ others (deposit). Landing money to public (loans). Transferring money from one place to another

(remittance). Acting as trustees. Keeping valuable in safe custody Government business

TYPES OF BANKPublic sector Banks Private sector Banks Cooperative Banks Development Banks

PUBLIC SECTOR BANKSCentral Bank of India Corporation Bank State Bank of India Bank of India Dena Bank Indian Overseas Bank

PRIVATE SECTOR BANKSPrivate BankICICI Bank HDFC Bank Axis Bank

Foreign Banks Operating In IndiaHSBC Bank Citi Bank ABN Amro Bank Standard Chartered Bank

CO-OPERATIVE BANKSThe cooperative bank in India started functioning almost 100 years ago. The cooperative bank is important constituent of the financial system. They are setup to provide easy loan to farmer or other person to setup his business. They are non profitable bankCooperative bank in India finance rural area under: Farming Cattle Milk Hatchery Personal finance Some example Of Cooperative Bank in India are: IDBI Bank

DEVELOPMENT BANKSThese banks are mainly used for developing industry and countries. Some examples are:NABARD SIDBI

WHO CONTROLS OVER BANKS?

RESERVE BANK OF INDIA (RBI)History:Become operational on April 1, 1935 Nationalized in the year 1949

Major objectives:Regulate the issue of Bank note Maintain reserve with a view to securing

monetary stability To operate the credit and currency system of the country to its advantage

FUNCTIONS OF RBITraditional functions Promotional functions Supervisory functions

TRADITIONAL FUNCTIONSMonopoly of currency notes issue Banker of the Govt. (Both central and state) Fight against economic crisis and ensures

stability of Indian economy

Controller of Forex and credit Maintains the external value of domestic

currency

PROMOTIONAL FUNCTIONSExtension of the facilities for the small

scale industries

Innovating the new banking business

transaction

Extension of the facilities for the

provision of the agriculture credit through NABARD

SUPERVISORY FUNCTIONSGranting license to bank Periodical review of the commercial

bank

Control the non banking finance

corporation

HOW IT CONTROLS BANK & ECONOMYTOOLS: CRR (Cash Reserve Ratio): Repo Rate: 4.75% Reverse Repo Rate: 3.25% SLR (Statutory Liquidity Ratio): 25% Bank Rate: 6%

5%

OVERVIEW OF INDIAN BANKING SYSTEM

GLIMPSE OF BANKING SECTORPhase-1: Early phase from 1786 to 1986 of Indian banks

Phase-2: Nationalization of Indian bank and up to 1991 prior to

Indian banking sector reforms

Phase-3: New phase of Indian banking system with the advent of

Indian financial and banking sector reform after 1991

PHASE - 1General bank of India 1786(first bank) Reserve bank of India Slow growth and periodic failure The Banking Company Act 1949 People mostly save in postal deposits

PHASE - 2Nationalization of imperial bank of India and

formation of State Bank Of India (1955)

Nationalization of SBI and subsidiaries (1960) Insurance cover extended to deposits Creation of regional rural banks

PHASE - 3Entry of Foreign Banks Phone banking and net banking Shelter from external

macroeconomic shockSystem become more convenient

and swift

CHALLENGES FACED BY INDIAN BANKSLack of product expertiseTraditionally focused on limited range of products -Primarily for corporate clients Need for acquiring skills in -Retail, Structured finance

Lack of distribution expertiseReliance on branch channel and human intervention Relatively high unit cost of delivery given small transaction sizes

Limited uses of technology

Inefficient capital allocation Competition in marketPost office Insurance Financial institution Foreign banks

WAYS AHEADTechnological advancement Rural banking Improve risk management Developing a flexible model for rapid scale up

at optimal cost

FACTS & FIGURESIndian banking sector has 4th rank in all over the world. SBI has 8500+ ATMs all over the country ICICI bank has 4700+ ATMs all over the country RBI had printed 639948 lakhs crore notes till 6th Nov 2009 Acc. To business magazines survey the no. of ATMs grew

28% yearly.

In spite of it India has 23+ ATMs per million people China

has 55+ ATMs and South Korea has 1600+ ATMs per million peopleTransaction done through ATMs is around 70,000 crore in a

year

SBI has largest no. of branches in foreign also

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