A Presentation

ON

Indian Banking
Sector
Submitted To: Submitted By:
Dr. Sujata Parwani Anand Tiwari
Richa Singh Kaharwar
Tosh Kumar Keshri
 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 BANK
Accepting 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 BANK
Public sector Banks

Private sector Banks

Cooperative Banks

Development Banks
 PUBLIC SECTOR BANKS

Central Bank of India

Corporation Bank
State Bank of India
Bank of India
Dena Bank
Indian Overseas Bank
 PRIVATE SECTOR BANKS

Private Bank
ICICI Bank
HDFC Bank
Axis Bank

Foreign Banks Operating In India

HSBC Bank
Citi Bank
ABN Amro Bank
Standard Chartered Bank
 CO-OPERATIVE BANKS
The 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
bank

Cooperative bank in India finance rural area under:

Farming
Cattle
Milk
Hatchery
Personal finance

Some example Of Cooperative Bank in India are:

IDBI Bank
 DEVELOPMENT BANKS

These 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 RBI

Traditional functions

Promotional functions

Supervisory functions
 TRADITIONAL FUNCTIONS
Monopoly 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 FUNCTIONS

Extension 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 FUNCTIONS

Granting license to bank

Periodical review of the commercial

bank

Control the non banking finance

corporation
 HOW IT CONTROLS BANK & ECONOMY

TOOLS:

 CRR (Cash Reserve Ratio): 5%

 Repo Rate: 4.75%

 Reverse Repo Rate: 3.25%

 SLR (Statutory Liquidity Ratio): 25%

 Bank Rate: 6%
OVERVIEW OF INDIAN
BANKING SYSTEM
 GLIMPSE OF BANKING SECTOR

Phase-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 - 1
General 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 - 2
Nationalization 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 - 3

Entry of Foreign Banks

Phone banking and net banking

Shelter from external

macroeconomic shock

System become more convenient

and swift
 CHALLENGES FACED BY INDIAN BANKS

Lack of product expertise

Traditionally focused on limited range of products
-Primarily for corporate clients
Need for acquiring skills in
-Retail, Structured finance

Lack of distribution expertise

Reliance 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 market
Post office
Insurance
Financial institution
Foreign banks
 WAYS AHEAD

Technological advancement

Rural banking

Improve risk management

Developing a flexible model for rapid scale up

at optimal
cost
 FACTS & FIGURES
Indian banking sector has 4th rank in all over the world.

SBI has 8500+ ATM’s all over the country

ICICI bank has 4700+ ATM’s all over the country

RBI had printed 639948 lakhs crore notes till 6th Nov 2009

Acc. To business magazines survey the no. of ATM’s grew

28% yearly.

In spite of it India has 23+ ATM’s per million people China
has 55+
ATM’s and South Korea has 1600+ ATM’s per million people

Transaction done through ATM’s is around 70,000 crore in a

year

SBI has largest no. of branches in foreign also

QUERIES?
THANK YOU