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BANKS IN INDIA
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Establishment of RBI
The reserve bank of India was established
on April 1,1935 in accordance with the provisions of
the reserve bank of India Act, 1934.
The central office of the reserve bank was
initially in Calcutta but was permanently moved to
Mumbai in 1937. the central office is where the
governor sits and where policies are formulated.
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Objectives of RBI
To maintain the internal value of the nationscurrency.
To preserve the external value of the currency
To secure reasonable price stability.
To promote economic growth with risinglevels of employment, out and real income
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Functions of a RBI
Monetary policy functions Currency issue and management Maintaining value of currency Anchor economic growth expectation Monetary regulation and management
Regulation of interest rates Financial sector regulation and supervision Exchange management and control Credit control Liquidity management Clearing and settlement Development of financial market Policy oriented research Collection of data and publication of reports Institution building
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Role of the Reserve Bank of India
Banker to the government
Banker to the banks
Banks supervision Monetary regulation and management
Foreign exchange and management
Promotional functions
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Supervisory/regulatory function of RBI
Licensing of banks
Approval of capital, reserves and liquid assets ofbanks
Branch licensing policy
Inspection of banks
Control over management
Audit
Credit information service Deposit insurance
Training and banking education
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RBI organization structure
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CommercialBanks
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Definition of Commercial Banks An institution which accepts deposits, makes business loans,
and offers related services. Commercial banks also allow for a variety of deposit accounts,
such as current, savings, and time deposit. These institutions are run to make a profit and owned by a group
of individuals. Commercial banks offer services to individuals; they are primarily
concerned with receiving deposits and lending to businesses.
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Sl. No Name of Banks Year of Incorporation
1 Allahabad Bank 1865
2 Andhra Bank 1923
3 Bank of Baroda 1908
4 Bank of India 1906
5 Bank of Maharashtra 1935
6 Canara Bank 1906
7 Corporation Bank 1906
8 Dena Bank 1938
9 Indian Bank 1907
10 Oriental Bank of Commerce 1943
11 Punjab National Bank 189512 Syndicate Bank 1925
13 UCO Bank 1943
14 Union Bank of India 1919
15 United Bank of India 1950
16 Vijaya Bank 1931
Nationalized Commercial Banks
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Functions of Commercial Bank
Primary Functions
Accepting Deposits :
Current Deposits
Saving Deposits
Fixed deposits
Recurring Deposits
Miscellaneous Deposits.
Granting Loans and Advances :
Short-term Loans
Cash Credit
OverdraftDiscounting of Bills.
Long-term Loans
Demand Loan
Term Loan.
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Secondary Functions :
Agency Services :
Collection and payment of cheques and bills on behalf of the customer;
Collection of dividends, interest and rent, etc. on behalf of the customer, if so
instructed by them;
Payment of rent, interest, insurance premium, etc. on behalf of customers,
if so instructed; Acting as agents or correspondents on behalf of customers for other banks and
financial institutions at home and abroad.
General utility Services :
Issuing letters of credit and travellers' cheques; Underwriting of shares, debentures, etc.;
Safe-keeping of valuables in safe deposit locker;
Supplying trade information and statistical data useful to customers;
Acting as a referee regarding the financial status of customers;
Undertaking foreign exchange business
Continue
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Recent Development in Commercial Banking
Interest rate deregulation
Electronic Clearing Services (ECS) Electronic Funds Transfer (EFT)
The opening of new clearing houses, interconnection of clearing
houses through the Indian Financial Network (INFINET)
The development of a Real-Time Gross Settlement (RTGS) System
Centralized Funds Management System (CFMS)
E-banking
E-payment
Automated teller machines(ATM)
Negotiated Dealing System (NDS)
The Structured Financial Messaging System (SFMS).
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What is Foreign Bank ????
A foreign bank is a bank that was established in adifferent country and is also serving customers ofanother country.
Foreign banks operate in India, just the way thelocal banks do.
They are bound by all the rules and regulationsthat are applicable to banks based out of India
and they are governed by the Reserve Bank ofIndia that controls/governs all banks operating inIndia.
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Some of the foreign banks that operatein India are:
Citibank
HSBC
Standard Chartered
Barclays
Etc.
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Foreign Branch Bank
Banks often open a foreign branch in order to provide more services
to their multinational corporation customers.
However, operating a foreign branch bank may
be considerably complicated because of the dual banking regulations
that the foreign branch needs to follow.
For example :-
suppose the Bank of America opens a foreign branch bank in Canada.
The branch would be legally obligated to follow both Canadian and
American banking regulations.
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Characteristics Of Foreign Banks
They tend to increase the efficiency of the local bankingsystem, bring in more sophisticated financial servicesand have the ability to nurse weak banks back tohealth.
It plays a great role in boosting Indian economy andalso lends to those who needs it.
It also bought latest techniques to serve the customersin the most effective manner and known forintroducing several banking practices.
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Contd..
Foreign banks are also known for uprooting the
unemployment in India by offering lots of job
opportunities .
It offers good packages and tantalizes the sense of
youngsters by offerings several other job facilities.
Besides, it also contributed its tremendous effort to
improve Indian foreign exchange market.
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CO-OPERATIVE BANKS
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Definition
A co-operative bank is a financial entity whichbelongs to its members, who are at the same timethe owners and the customers of their bank. Co-operative banks are often created by persons
belonging to the same local or professionalcommunity or sharing a common interest. Co-operative banks generally provide their memberswith a wide range of banking and financial
services (loans, deposits, banking accounts). InIndia co-operative banks are regulated with theRBI and governed by Banking Regulations Act1949 and Co-operative Societies Act, 1965.
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E bli h
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Establishments
Co-operative bank performs all the main banking functions of depositmobilisation, supply of credit and provision of remittance facilities.
Co-operative Banks belong to the money market as well as to the capitalmarket.
Co-operative Banks provide limited banking products and arefunctionally specialists in agriculture related products. However, co-operative banks now provide housing loans also.
UCBs provide working capital loans and term loan as well.
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The chief functions of Co-operative banks are :
To attract deposit from non-agriculturist.
To use excess funds of some societies
temporarily to make up for shortage in
another.
To supervise and guide affiliated societies.
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Finance Function:
Cooperative banks in India finance rural areas under:
Farming
Cattle
Milk
Personal
Finance
Cooperative banks in India finance urban areas under:
Self-employment
Industries
Small scale units Home finance
Consumer finance
Personal finance
T f ti b k
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Types of co-operative banks
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SCHEDULED BANKS
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Cl ifi ti
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Classification
SCHEDULED BANKS
PUBLIC SECTORSCHEDULED BANKS
PRIVATE SECTORSCHEDULED BANKS
SCHEDULEDFOREIGN BANKS
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Functions
Transfer of funds
Acceptance of deposits
Offering those deposits as loans for variouspurpose
Purchase of houses, equipments, capitalinvestment purposes etc.
The Indian Government presently hires the
scheduled banks banks for various purposes liketax collection and refunds, payment of pensionsetc.
C O i
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Campus Overview
907/A Uvarshad,
Gandhinagar
Highway, Ahmedabad
382422.
Ahmedabad Kolkata
Infinity Benchmark, 10th
Floor, Plot G1,
Block EP & GP,
Sector V, Salt-Lake,
Kolkata 700091.
Mumbai
Goldline Business Centre
Linkway Estate,
Next to Chincholi Fire
Brigade, Malad (West),
Mumbai 400 064.
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Thank you