Introduction

A bank is a financial institution that provides banking and other financial services
to their customers. A bank is generally understood as an institution which provides
fundamental banking services such as accepting deposits and providing loans.
There are also non-banking institutions that provide certain banking services
without meeting the legal definition of a bank. Banks are a subset of the financial
services industry.

A banking system also referred as a system provided by the bank which offers cash
management services for customers, reporting the transactions of their accounts
and
portfolios, through out the day. The banking system in India, should not only be
hassle free but it should be able to meet the new challenges posed by the
technology and any other external and internal factors. For the past three decades,
Indias banking system has several outstanding achievements to its credit. The
Banks are the main participants of the financial system in India. The Banking
sector offers several facilities and opportunities to their customers. All the banks
safeguards the money and valuables and provide loans, credit, and payment
services, such as checking accounts, money orders, and cashiers cheques.

The banks also offer investment and insurance products. As a variety of models for
cooperation and integration among finance industries have emerged, some of the
traditional distinctions between banks, insurance companies, and securities firms
have
diminished. In spite of these changes, banks continue to maintain and perform their
primary roleaccepting deposits and lending funds from these deposits.

Before the establishment of banks, the financial activities were handled by money
lenders
and individuals. At that time the interest rates were very high. Again there were no
security of public savings and no uniformity regarding loans. So as to overcome
such
problems the organized banking sector was established, which was fully regulated
by the
government. The organized banking sector works within the financial system to
provide
loans, accept deposits and provide other services to their customers. The following
functions of the bank explain the need of the bank and its importance:
To provide the security to the savings of customers.
To control the supply of money and credit
To encourage public confidence in the working of the financial system, increase
savings speedily and efficiently.
To avoid focus of financial powers in the hands of a few individuals and
institutions.
To set equal norms and conditions (i.e. rate of interest, period of lending etc) to
all
types of customers


The first bank in India, called The General Bank of India was established in the
year
1786. The East India Company established The Bank of Bengal/Calcutta (1809),
Bank of
Bombay (1840) and Bank of Madras (1843). The next bank was Bank of
Hindustan
which was established in 1870. These three individual units (Bank of Calcutta,
Bank of
Bombay, and Bank of Madras) were called as Presidency Banks. Allahabad Bank
which
was established in 1865, was for the first time completely run by Indians. Punjab
National Bank Ltd. was set up in 1894 with head quarters at Lahore. Between 1906
and
1913, Bank of India, Central Bank of India, Bank of Baroda, Canara Bank, Indian
Bank,
and Bank of Mysore were set up. In 1921, all presidency banks were amalgamated
to
22
form the Imperial Bank of India which was run by European Shareholders. After
that the
Reserve Bank of India was established in April 1935.
At the time of first phase the growth of banking sector was very slow. Between
1913 and
1948 there were approximately 1100 small banks in India. To streamline the
functioning
and activities of commercial banks, the Government of India came up with the
Banking
Companies Act, 1949 which was later changed to Banking Regulation Act 1949 as
per
amending Act of 1965 (Act No.23 of 1965). Reserve Bank of India was vested
with
extensive powers for the supervision of banking in India as a Central Banking
Authority.
After independence, Government has taken most important steps in regard of
Indian
Banking Sector reforms. In 1955, the Imperial Bank of India was nationalized and
was
given the name "State Bank of India", to act as the principal agent of RBI and to
handle
banking transactions all over the country. It was established under State Bank of
India
Act, 1955. Seven banks forming subsidiary of State Bank of India was nationalized
in
1960. On 19th July, 1969, major process of nationalization was carried out. At the
same
time 14 major Indian commercial banks of the country were nationalized. In 1980,
another six banks were nationalized, and thus raising the number of nationalized
banks to
20. Seven more banks were nationalized with deposits over 200 Crores. Till the
year
1980 approximately 80% of the banking segment in India was under governments
ownership. On the suggestions of Narsimhan Committee, the Banking Regulation
Act
was amended in 1993 and thus the gates for the new private sector banks were
opened.
The following are the major steps taken by the Government of India to Regulate
Banking
institutions in the country:-
1949 : Enactment of Banking Regulation Act.
1955 : Nationalisation of State Bank of India.
1959 : Nationalization of SBI subsidiaries.
1961 : Insurance cover extended to deposits.
1969 : Nationalisation of 14 major Banks.
1971 : Creation of credit guarantee corporation.
1975 : Creation of regional rural banks.
1980 : Nationalisation of seven banks with deposits over 200 Crores
Defination
As per Section 5(d) of Banking Regulation Act, 1949 , company means any
company as defined in Section 3 of the Companies Act, 1956 and includes a
foreign company within the meaning of Section 591 of that Act.

As per section 51 of Banking Regulation Act, 1949 , certain provisions of the
Banking Regulation Act are also applicable to the State Bank of India , any
corresponding As per Section 5(c) of Banking Regulation Act, 1949 a "Banking
Company" means any company which transacts the business of banking in India.

Explanation: Any company which is engaged in the manufacture of goods or
carries on any trade and which accepts the deposits of money from public merely
for the purpose of financing its business as such manufacturer or trader shall not be
deemed to transact the business of banking within the meaning of this clause."

As per Section 5(b) of Banking Regulation Act, 1949 , banking means the
accepting, for the purpose of lending or investment, of deposits of money from the
public, repayable on demand or otherwise, and withdrawable by cheque, draft,
order or otherwise.
new bank, a regional rural bank and any subsidiary bank. "Corresponding new
bank" has been defined under clause(ee)of section 2 of the DICGC Act to mean a
corresponding new bank constituted under the Banking Companies (Acquisition
and Transfer of Undertakings ) Acts of 1970 or 1980.
Private Bank Accounts in India
There are many Private bank accounts that can be located throughout many of the
banks in India. This includes current accounts, deposit accounts and also savings
accounts for the customers of these types of banks.

The information that is below explains in detail about Private Bank Accounts in
India and the various services that can be found. It also explains the procedure of
how you go about opening one of these accounts and the benefits that are included
with them.
Looking At Private Bank Accounts in India:
Some of the most popular accounts are current accounts, savings accounts, loans
and credit cards services. In the majority of cases you would need to be in
employment or self employed to be able to take advantage of these such services.
These services can be found from such banks like HDFC Bank, ABN AMRO
Bank, Bank of Baroda. These do indeed come with some very attractive bonuses
which includes free cash withdrawals, wide network of branches that can be found
throughout India and much more. HDFC Bank has an easy to appraoch savings
account where you can check your balance through Netbanking.

These also offer some very good deals on credit cards as well. You will generally
need to be either in employment or self employed.

The ABN AMRO Bank also offers some good services which includes bank
accounts, credit card facilities and forex solutions for their customers.

The Bank of Baroda has some very good private banking solutions for their
customers which includes credit cards, debits cards and forex operations to name a
few although applicants for these accounts will need to be in full time employment
and be earning in excess of around RS.1,50,000.
Documents you will need for Private Bank Accounts in India.
All applicants are going to need to be able to supply income proof like a wage slip,
IT etc. They will also need to submit address proof which includes gas or
electricity bills, photograph, PAN card and also the last three months bank
statements should also be submitted along with your application forms for the
relevant services that you require.
You will be sent a statement usually to the bank account holders address every
month depending on what service you choose with these such banks. These will
tell you about all of the transactions taken place during that month and it will also
tell you about when a payment needs to be made.
These banks also have their own official websites where you can download
application forms for the service that you require from Private Bank Accounts in
India.

You can also contact by telephone which can be found on the websites for any
concerns or enquiries that you may have.
Introduction of pvt sector bank
India has a well-developed banking
system. Indian entrepreneurs and
visionaries founded most of the banks in
India in the pre-independence era to
provide financial assistance to traders,
agriculturists and budding Indian
industrialists. Indian banks have played a
significant role in the development of
Indian economy by inculcating the habit of
saving in Indians and by lending finance to
Indian industry. Indian banks can be
broadly classified into nationalised banks/
public sector banks and private banks.
All the banks in India were earlierprivate banks. They were founded in the
pre-independence era to cater to the
banking needs of the people. But after
nationalisation of banks in 1969 public
sector banks came to occupy dominant
role in the banking structure. Private
sector banking in India received a flip in
1994 when Reserve Bank of India
encouraged setting up of private banks as
part of its policy of liberalisation of the
Indian Banking Industry.
Features & Benefits of private banking


No minimum balance required

Interest at the applicable savings account rate

Free International Debit card with ATM cash withdrawal limit of up to Rs.
15,000 and Rs. 25,000 (non-cash) at shopping avenues.

Free issuance of Demand Drafts up to Rs. 25,000 per instrument, payable at
branches within the HDFC Banking network.

Free Net Banking, Phone Banking, Mobile Banking

Free Sweep-in facility

Free inter-city/branch banking.

Safe Deposit Lockers (subject to availability)

Quarterly statements

Free personalised cheque book

Preferential rates on loan products offered by the bank

Preferential rates on forex transactions

Private sector banks in India
All those banks where greater parts of stake or equityare held by the private
shareholders and not by government are called as the private sector banks. These
are the major players in the banking sector as well as in expansion of the business
activities India. The present private sector banks equipped with all kinds of
contemporary innovations, monetary tools and techniques to handle the
complexities are a result of the evolutionary process over two centuries. They
have a highly developed organisational structure and are professionally managed.
Thus they have grown faster and stronger since past few years.
History and evolution
Private sector banks have been functioning in India since the very beginning of
the banking system. Initially, during 1921, the private banks like bank of Bengal,
bank of Bombay and bank of madras were in service, which all together formed
Imperial Bank of India.
Reserve Bank of India(RBI) came in picture in 1935 and became the centre of
every other bank taking away all the responsibilities and functions of Imperial
bank. Between 1969 and 1980 there was rapid increase in the number of branches
of the private banks. In April 1980, they accounted for nearly 17.5 percent of
bank branches in India. In 1980, after 6 more banks were nationalised, about 10
percent of the bank branches were those of private sector banks. The share of the
private bank branches stayed nearly same between 1980 and 2000.
Then from early 1990s, RBI's liberalisation policy came in picture and with this
the government gave licences to a few private banks, which came to be known as
new private sector banks.
There are two categories of the private sector banks- old and new.
The old private sector banks have been operating since a long time and may be
referred to those banks, which are in operation from before 1991 and all those
banks that have commenced there business after 1991 are called as new private
sector banks.

Housing Development Finance Corporation Limited was the 1st private bank in
India to receive license from RBI as a part of the RBIs liberalization policy of
the banking sector, to setup a bank in the private sector banks in India.
Old private sector banks
The banks, which were not nationalized at the time of bank nationalization that
took place during 1969 and 1980 are known to be the old private sector banks.
These were not nationalized, because of their small size and regional focus.
Most of the old private sector banks are closely held by certain communities their
operations are mostly restricted to the areas in and around their place of origin.
Their Board of directors mainly consist of locally prominent personalities from
trade and business circles.
One of the positive points of these banks is that, they lean heavily on service and
technology and as such, they are likely to attract more business in days to come
with the restructuring of the industry round the corner.
List of the old private sector banks in India
New private sector banks
The banks, which came in operation after 1991, with the introduction of
economic reforms and financial sector reforms are called as new private sector
banks. Banking regulation act was then amended in 1993, which permitted the
entry of new private sector banks in the Indian banking sector. However, there
were certain criteria set for the establishment of the new private sector banks.
Some of those criteria being:
1. The bank should have a minimum net worth of Rs. 100 crores.
2. The promoters holding should be a minimum of 25% of the paid up
capital.
3. Within 3 years of the starting of the operations, the bank should offer
shares to public.
List of the new private sector banks in India
Name of the Bank Year of establishment
1. Bank of Rajasthan 1943
2. Catholic Syrian Bank 1920
3. City Union Bank 1904
4. Dhanlaxmi Bank 1927
5. Federal Bank 1931
6. ING Vysya Bank 1930
7. Jammu and Kashmir Bank 1938
8. Karnataka Bank 1924
9. Karur Vysya Bank 1916
10. Lakshmi Vilas Bank 1926
11. Nainital Bank 1912
12. Ratnakar Bank 1943
13. SBI Commercial and international Bank 1955
14. South Indian Bank 1905
15. Tamilnad Mercantile Bank Limited 1921
16. United Western Bank 1936
Name of the bank year of establishment
1. Axis Bank (earlier UTI Bank) 1995
2. Bank of Punjab 1989
3. Centurian Bank of Punjab 1994
4. Development Credit Bank 1995
5. HDFC Bank 1994
6. ICICI Bank 1996
7. IndusInd Bank 1994
8. Kotak Mahindra Bank 1985
9. Yes Bank2005