A bank is a financial institution and a financial intermediary that accepts deposits and channels those deposits into lending

activities, either directly or through capital market. A bank connects customers with capital deficits to customers with capital surpluses.

 PHASE

Early phase from 1786 to 1969 of Indian banks.

PHASE

Nationalization of Indian Banks and up to 1991 prior to Indian banking sector Reforms.
PHASE

New phase of Indian Banking system with the advent of Indian Financial & Banking Sector Reforms after 1991.

ACCEPTING DEPOSITS ISSUAL OF DEMAND DRAFTS GRANTING LOANS & ADVANCES UNDERTAKING SAFE CUSTODY OF VALUABLES,IMPORTANT DOCUMENTS & SECURITIES BY PROVIDING SAFE DEPOSIT VAULTS OR LOCKERS

DOCUMENTATION IS MAINTAINED THROUGH LEDGERS ONLY. MINIMUM BALANCE FOR OPENING AN ACCOUNT WAS MORE DURING THIS PERIOD. CREDITS WERE GRANTED AT VERY HIGH RATE OF INTEREST. TOKEN SYSTEM FOR WITHDRAWAL OF CASH FROM THE ACCOUNT.

 POSSIBILITY

OF HUMAN ERRORS . TIME CONSTRAINT. CUSTOMER RELATIONSHIP WAS LIMITED. OVER DRAFT WAS NOT AVAILABLE. PROCESSING FEES WAS CHARGED FOR ALL THE TRANSACTIONS . PASSING OF CHEQUES WAS DELAYED. LIMITED USE OF TECHNOLOGY.

WHY TECHNOLOGY IN BANKS ?

TO TRANSFORM FINANCIAL SERVICES INDUSTRY IN THE NETWORKED WORLD:

-INCREASED OPERATION EFFICIENCY,PROFITABILITY & PRODUCTIVITY - SUPERIOR CUSTOMER SERVICE - PROVIDE SERVICES / PRODUCTS ACROSS A RANGE OF CHANNELS - TO BE FUTURISTIC AND HAVE TIME VALUE IN ALL ITS DEALINGS WITH CUSTOMERS -IMPROVED MANAGEMENT/ACCOUNTABILITY -BETTER CROSS SELLING ABILITY -MINIMAL TRANSACTION COST -IMPROVED FINANCIAL ANALYSIS CAPABILITIES.

 CORE

BANKING SOLUTIONS(CBS) Pooling data at central server

CUSTOMER

RELATIONSHIP MANAGEMENT(CRM)

FUND TRANSFER(EFT) ELECTRONIC CLEARING SYSTEM(ECS) ANY BRANCH BANKING RISK MANAGEMENT ATMS CARD MANAGEMENT MOBILE BANKING
ELECTRONIC

 HACKING

PHISHING
PHARMING SKIMING TROJAN

Indian marched towards the establishment of public sector banking through the progressive nationalization of commercial banks. There were three phases of bank nationalization: - Nationalization of Imperial Bank of India in1955 and its seven associate banks in 195960. -Nationalization of the 14 major commercial banks in 1969. -Nationalization of 6 more commercial banks in 1980. On July 1, 1955 the government of India nationalised the Imperial Bank of India and converted it into the State Bank of India A such over 90 percent of the banking activity in the country is brought under into the public sector. Nationalization of banks implied a bold and major economic step in the process of banking reforms in the country.

Established - April 1, 1935

Ownership- originally privately, Nationalized 1949

Central Office Governor sits and policies are formulated initially established in Calcutta; permanently moved to Mumbai in 1937 Preamble

"... to regulate the issue of Bank Notes and keeping of reserves with a view to securing monetary stability in India and generally to operate the currency and credit system of the country to its advantage
12

Regulator and supervisor of financial system Monetary Authority Banker to the Government Monopoly of Note Issue (other than Rupee One notes and coins and subsidiary coins) Manager of Foreign Exchange Developmental role Related Functions

13

1)

Central Bank
A bank which is entrusted with the functions of guiding and regulating the banking system of a country is known as its Central bank.

2)

Commercial Banks
Commercial banks are of three types
(i) Public Sector Banks (ii) Private Sectors Banks

(iii) Foreign Banks

Business often requires medium and long-term capital for purchase of machinery and equipment, for using latest technology, or for expansion and modernization. Such financial assistance is provided by Development banks.

4)

Co-operative Banks
There are three types of co-operative banks operating in our country. (i) Primary Credit Societies (ii) Central Co-operative Banks (iii) State Co-operative Banks

There are some banks, which cater to the requirements and provide overall support for setting are examples of such banks. They engage themselves in some specific area or activity and thus, are called Specialised banks. Let us know about them. (i) Export Import Bank of India (EXIM Bank) (ii) Small Industries Development Bank of India (SIDBI) (iii) National Bank for Agricultural and Rural Development (NABARD)

Publicly owned banks handle more than 80% of the banking business in India and the rest is in the hands of private sector banks. However, banking in both the government and private sector is being revolutionized by this latest phenomenon called globalization. Globalization- Its Challenges for Indian Banks

The benefits of globalization have been well documented and are being increasingly recognized, but at the same time it has thrown many challenges for Indian banks. It affects the banking industry in one or more of the following ways:
1.

2.
3. 4. 5. 6. 7.

8. 9.

10.

Greater and intensive competition Focus on efficiency, productivity and cost reduction .Superior risk management system and practices Strengthening service quality, delivery and cross selling of products/services Product innovation as an integral part of the retail banking revolution Up gradation of technological infrastructure Competency building and investment in human capital as a catalyst for transformation Consolidation within the financial system Opportunity to increase size and scale to gain dominance in the local market and penetrate into the global markets Transparency, disclosure and market discipline. It is, therefore, imperative for Indian banks to address all the above issues, if they aspire to play a role in the global arena

In banking sector, major transformations have taken place since 1991; and re-energized. De-regulation: Not fully de-regulated; penetration to masses achieved through reforms so far. But majority banking reforms are not adequate. Products available in a small country like Qatar not offered by Indian Banking sector.

Defective structure Money lenders Indigenous bankers Non-banking agencies Inadequacies of banking system Insufficient banking solutions Insufficient mobilization of resources Insufficient banking operations in rural areas Weak performance Small profits Deterioration in efficiency Poor customer service

1.

Reforming the structure Expanding banking facilities Improving the efficiency Improving customer service

2.

3.

4.

to evolve into a strong, sound and globally competitive financial system

to provide integrated services to customers from all segments

to leverage on technology and human resources, adopting the best

accounting and ethical practices and fulfilling corporate and social responsibilities towards all stakeholders.

Ranking- 11th to 4th among 207 countries given in the

World Development Report in terms of (GDP).

FDI-to contribute 35% (21% now) in capital formation

International trade-below 1%(present) to 6% Contribution of GDP- 15% (present) to 35% Annual growth(GDP)- 8.5% to 9% Urbanization- 30% to 40%