banking sector of india presentation

8/14/2019 Banking Sector of india Presentation

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INTRODUCTIONINTRODUCTION


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BANKING SECTORBANKING SECTOROF INDIAOF INDIA


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WHAT IS BANK?WHAT IS BANK?A banker or bank is a financial institutionA banker or bank is a financial institution

whose primary activity is to act as a paymentwhose primary activity is to act as a paymentagent for customers and to borrow and lendagent for customers and to borrow and lendmoney.money.

An institution where one can place andAn institution where one can place andborrow money and take care of financial affairs;borrow money and take care of financial affairs;A branch office of such an institution.A branch office of such an institution.

The first modern bank was founded in ItalyThe first modern bank was founded in Italyin Genoa in 1406, its name was (Bank of St.in Genoa in 1406, its name was (Bank of St.George).George).


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FUNCTIONS OFFUNCTIONS OF

BANKSBANKSAccepting Deposits from public/othersAccepting Deposits from public/others(Deposits).(Deposits).

Lending money to public (Loans).Lending money to public (Loans).Transferring money from one place toTransferring money from one place to

another (Remittances).another (Remittances).Acting as trustees.Acting as trustees.Keeping valuables in safe custody.Keeping valuables in safe custody.

Government business.Government business.


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ACTING AS A TRUSTEESACTING AS A TRUSTEESBanks also act as trustees for various purposes. For example,Banks also act as trustees for various purposes. For example,whenever a company wishes to issue secured DEBENTURES, itwhenever a company wishes to issue secured DEBENTURES, ithas to appoint a financial intermediary as trustee who takeshas to appoint a financial intermediary as trustee who takescharge of the security for the debenture and looks after thecharge of the security for the debenture and looks after theinterests of the debenture holders. Such entity necessarily haveinterests of the debenture holders. Such entity necessarily haveto have expertise in financial matters and also be of sufficientto have expertise in financial matters and also be of sufficientstanding in the market/society to generate confidence in thestanding in the market/society to generate confidence in theminds of potential subscribers to the debenture. While Banks areminds of potential subscribers to the debenture. While Banks are

the natural choice for the customers, Banks must possess thethe natural choice for the customers, Banks must possess thefollowing to be effective and retain that:following to be effective and retain that:

A track record of sufficient length.A track record of sufficient length.Facilities for safe keeping.Facilities for safe keeping.

Legal skills to take necessary steps for the trusteeshipLegal skills to take necessary steps for the trusteeship ..


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DEBENTURESDEBENTURES

It is define as certicate of agreements of It is define as certicate of agreements of loans which is given under the companiesloans which is given under the companies

stemps and ensure fixed returns on thestemps and ensure fixed returns on thebasis of interest rate and the principalbasis of interest rate and the principalamount whenever debenture mature.amount whenever debenture mature.TYPES OF DEBENTURES-TYPES OF DEBENTURES-

1.NCD1.NCD2.PCD2.PCD3.OCD3.OCD4.FCD4.FCD


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TYPES OF BANKSTYPES OF BANKSPublic sector BanksPublic sector Banks

Private sector BanksPrivate sector Banks

Co-operative BanksCo-operative Banks

Development Bank/Financial institutionsDevelopment Bank/Financial institutions


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Public sector BanksPublic sector BanksSome Public Sector Banks in IndiaSome Public Sector Banks in India ::

Central Bank of IndiaCentral Bank of India

Corporation BankCorporation BankDena BankDena BankBank of IndiaBank of India

Indian Overseas BankIndian Overseas BankOriental Bank of CommerceOriental Bank of CommercePunjab & Sind BankPunjab & Sind Bank


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Private sectors BanksPrivate sectors BanksOld generation private banksOld generation private banks

New generation private banksNew generation private banks

ICICI BankICICI Bank

IDBI BankIDBI Bank Axis bankAxis bank

Foreign banks operating in IndiaForeign banks operating in India

HSBC BANKHSBC BANK

CITI BANKCITI BANK

ABN-AMRO BANKABN-AMRO BANK

STANDARD CHARTED BANKSTANDARD CHARTED BANK


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Upcoming foreign bank in IndiaUpcoming foreign bank in India

RBS(ROYAL BANK OF SCOTLAND GROUP)RBS(ROYAL BANK OF SCOTLAND GROUP)INDUSTRIAL AND COMMERCIAL BANK OFINDUSTRIAL AND COMMERCIAL BANK OFCHINACHINA

Scheduled co-operative banksScheduled co-operative banks

Non-scheduled bankNon-scheduled bank


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CO-OPERATIVECO-OPERATIVE

BANKSBANKSThe Co operative banks in India started functioning almost 100The Co operative banks in India started functioning almost 100years ago. The Cooperative bank is an important constituent of theyears ago. The Cooperative bank is an important constituent of theIndian Financial System.They are setup to provide easy loans toIndian Financial System.They are setup to provide easy loans tofarmers or other persons to set up his buisness.farmers or other persons to set up his buisness.They are non profitable banks.They are non profitable banks.Cooperative banks in India finance rural areas under Coo perative banks in India finance rural areas under ::

FarmingFarmingCattleCattleMilkMilkHatcheryHatcheryPersonal financePersonal finance

Some example of co-operative banks in India-Some exam ple of co-operative banks in India-IDBI BANK(INDUSTRIAL DEVELOPMENT BANK OF INDIA)IDBI BANK(INDUSTRIAL DEVELOPMENT BANK OF INDIA)IFCI BANK(INDUSTRIAL FINANCE COOPERATION OF INDIA)IFCI BANK(INDUSTRIAL FINANCE COOPERATION OF INDIA)

APEX BANKAPEX BANK


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Banks/FinancialBanks/Financial

InstitutionsInstitutionsThese banks are mainly used for devolopingThese banks are mainly used for devolopingindustries and countriesindustries and countries

Some Examples-Some Examples-Federal BankFederal BankHDFC BankHDFC BankHSBCHSBCICICIICICIBank Indian Overseas BankBank Indian Overseas BankING Vysya BankING Vysya Bank


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WHO CONTROLS OVER BANKSWHO CONTROLS OVER BANKS ??


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The Reserve Bank of IndiaThe Reserve Bank of India (RBI)(RBI)

HistoryHistor y :-:-

Become operational on April 1,1935Become operational on April 1,1935Nationalized in the Year 1949.Nationalized in the Year 1949.

Major objectives:-Ma jor objectives:-

Regulate the issue of banknote.Regulate the issue of banknote.

Maintain reserves with a view to securing monetaryMaintain reserves with a view to securing monetarystability.stability.To operate the credit and currency system of the country toTo operate the credit and currency system of the country toits advantage.its advantage.


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Functions of RBIFunctions of RBI

The fuctions are classified into three heads:-The fuctions are classified into three heads:-

Traditional functionsTraditional functions

Promotional functionsPromotional functions

Supervisory functionsSupervisory functions


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Traditional functionsTraditional functionsMonopoly of currency notes issueMonopoly of currency notes issue

Banker to the Government (both the centralBanker to the Government (both the centraland state)and state)Fight against economic crisis and ensuresFight against economic crisis and ensuresstability of Indian economy.stability of Indian economy.Controller of ForEx and creditController of ForEx and creditMaintaining the external value of domesticMaintaining the external value of domestic

currencycurrency


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Promotional functionsPromotional functions

Extension of the facilities for theExtension of the facilities for the smallsmallscale industriesscale industries Innovating the new banking businessInnovating the new banking businesstransactions.transactions.Extension of the facilities for the provisionExtension of the facilities for the provisionof the agricultural credit through NABARDof the agricultural credit through NABARD


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Supervisory functionsS upervisory functions

Granting licence to Banks.Granting licence to Banks.Periodical review of the work of thePeriodical review of the work of the

commercial banks.commercial banks. Control the non-banking financeControl the non-banking financecorporation.corporation.


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HOW IT CONTROLS BANK &HOW IT CONTROLS BANK &ECONOMYECONOMY

TOOLS:-TOOLS:-CRR( CASH RESERVE RATIO): 5.5%CRR( CASH RESERVE RATIO): 5.5%

REPO RATES(RR):7.5%REPO RATES(RR):7.5%

REVERSE REPO RATE(RRR): 6.0%REVERSE REPO RATE(RRR): 6.0%

STATUTORY LIQUIDTY RATIO (SLR):24%STATUTORY LIQUIDTY RATIO (SLR):24%

BANK RATE: 6.0%BANK RATE: 6.0%


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Overview of Indian Banking Sector Overview of Indian B anking Sector


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A Glimpse of Banking sector A Gl impse of Banking sector

Phase-1Phase-1Early phase from 1786 to 1969 of Indian BanksEarly phase from 1786 to 1969 of Indian Banks

Phase-2Phase-2Nationalization of Indian Banks and up to 1991Nationalization of Indian Banks and up to 1991

prior to Indian banking sector Reformsprior to Indian banking sector Reforms

Phase-3Phase-3New phase of Indian Banking System with theNew phase of Indian Banking System with theadvent of Indian Financial & Banking Sector advent of Indian Financial & Banking Sector Reforms after 1991Reforms after 1991


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Phase-1Phase-1

GENERAL BANK OF INDIA 1786(FIRST BANK)GENERAL BANK OF INDIA 1786(FIRST BANK)

RESERVE BANK OF INDIA 1935RESERVE BANK OF INDIA 1935

SLOW GROWTH AND PERIODIC FAILURESLOW GROWTH AND PERIODIC FAILURE

THE BANKING COMPANY ACT 1949THE BANKING COMPANY ACT 1949

PEOPLEPEOPLE MostlyMostly SAVE IN POSTAL DEPOSITSSAVE IN POSTAL DEPOSITS


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Phase-2Phase-2

Nationalization of imperial bank of India andNationalization of imperial bank of India andformation of sate bank of India(1955)formation of sate bank of India(1955)

Nationalization of SBI and Subsidiaries(1960)Nationalization of SBI and Subsidiaries(1960)

Insurance cover extended to depositsInsurance cover extended to deposits

Creation of credit guarantee corporationCreation of credit guarantee corporation

Creation of regional rural banksCreation of regional rural banks


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Phase-3Phase-3

Entry of Foreign BanksEntry of Foreign Banks

Phone Banking and Net-BankingPhone Banking and Net-Banking

Shelter from external macroeconomic shockShelter from external macroeconomic shock

System become more convenient and swiftSystem become more convenient and swift


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Challenges faced by IndianChallen ges faced by Indianbanksbanks

Lack of product expertiseLack of product expertiseTraditionally focused on limited range of productsTraditionally focused on limited range of products

Primarily for corporate clientsPrimarily for corporate clients

Need for acquiring skills inNeed for acquiring skills inRetail, structured financeRetail, structured finance

Lack of distribution expertiseLack of distribution expertiseReliance on branch channel and human interventionReliance on branch channel and human interventionRelatively high unit cost of delivery given smallRelatively high unit cost of delivery given smalltransaction sizestransaction sizes

Limited use of technologyLimited use of technologyAcross both customer-facing andAcross both customer-facing andinternal functionsinternal functions


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ContinuedContinued

Inefficient capital allocationInefficient capital allocation

Competition in marketCompetition in marketPost officePost officeInsuranceInsurance

Financial InstitutionFinancial InstitutionForeign BanksForeign Banks


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Ways AheadWa ys Ahead

Technological AdvancementTechnological Advancement

Rural BankingRural Banking

Improving Risk ManagementImproving Risk Management

Developing a flexible model for rapidDeveloping a flexible model for rapidscale-up at optimal costscale-up at optimal cost


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FACTS AND FIGURESFACTS AND FIGURESIndian banking sector has 6Indian banking sector has 6 thth rank in all over the world.rank in all over the world.

SBI has 6500+ ATMs all over the country.SBI has 6500+ ATMs all over the country.ICICI bank has 3500+ ATMs all over the country.ICICI bank has 3500+ ATMs all over the country.RBI had printed 6,39,948 lakhs crore notes till 6RBI had printed 6,39,948 lakhs crore notes till 6 THTH NovNov2008.2008.IN Indore SBI has 45+ ATMs .IN Indore SBI has 45+ ATMs .SBI provides the facility and it is tie with 9200+ banks toSBI provides the facility and it is tie with 9200+ banks to

use their ATMs.use their ATMs.Acc. To business magazine survey the no. of ATMs grewAcc. To business magazine survey the no. of ATMs grew28% yearly.28% yearly.Inspite of it India has 23+ ATMs per million people,Inspite of it India has 23+ ATMs per million people,China has 55+ ATMs and South Korea has 1600+ ATMsChina has 55+ ATMs and South Korea has 1600+ ATMsper million people.per million people.Transaction done through ATMs is around 70,000 croreTransaction done through ATMs is around 70,000 crore

in a year.in a year.ICICI bank has largest no. branches in foreign also.ICICI bank has largest no. branches in foreign also.


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QueriesQueries ??


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THANK YOUTHANK YOU

banking sector of india presentation

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