growth in banking sector-(154)

7/28/2019 Growth in Banking Sector-(154)

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Prepared byDivya Sharma

15412303910


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Indias banking sector is booming at a great pace.Indian banking sector has 6th rank in all over the

world.

Most of the banks paid their focus on the retailsector and provide internet banking, phone banking

and mobile banking services to their customers andhave cornered one of the largest segments of the

India's banking sector by targeting the India's growingmiddle income class.


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Cont.SBI has 6500+ ATMs all over the country.

ICICI bank has 3500+ ATMs all over the country.

RBI had printed 9,39,948 lakh crore notes till 6th november2011.

Acc. To business magazine survey, the no. of ATMs grew28% yearly.

Inspite of it India has 23+ ATMs per million people.

Transactions done through ATMs is around 70,000 crore ina year.


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BANK????

A bank is a financial institution whose primaryactivity is to act as payment agent for customersand to borrow and lend money.

An institution where one can place and borrowmoney and take care of financial affairs


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Functions of Banks

Accepting deposits from public/others.

Lending money to public.

Transferring money from one place to another.

Acting as trustees.

Keeping valuables in safe custody.


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Types of BanksPublic sector banks

Private sector banks

Co-operative banks

Development banks/financial institutions


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Public sector Banks in India

Central bank of IndiaCorporation bank

Dena bank

Bank of India

Indian overseas bank

Oriental bank of commercePunjab & sind bank


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Private sector Banks

ICICI bankIDBI bank

Axis bank

Foreign banks operating in India

HSBC bank

Citi bank

ABN-AMRO bank

Standard chartered bank


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Co-operative Banks The Co operative banks in India started functioning almost

100years ago. The Cooperative bank is an importantconstituent of the Indian Financial System. They are setupto provide easy loans to farmers or other persons to set uphis business. They are non profitable banks. Cooperativebanks in India finance rural areas under

FarmingCattleMilkHatcheryPersonal finance

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


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Development Banks/financial

institutionsThese banks are mainly used for developing industries

and countries.

Some examples are:

Federal bank

HDFC bank

HSBC

ICICI bank

Indian overseas bank

ING Vysya bank


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A glimpse of Banking sectorPhase 1

Early phase from 1786 to 1969 of Indian Banks

GENERAL BANK OF INDIA 1786(FIRST BANK)

RESERVE BANK OF INDIA 1935

SLOW GROWTH AND PERIODIC FAILURE

THE BANKING COMPANY ACT 1949

PEOPLE Mostly SAVE IN POSTAL DEPOSITSS

Ph 2


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

Indian banking sector Reforms

Nationalization of imperial bank of India andformation of state bank of India(1955)

Nationalization of SBI and Subsidiaries(1960)

Insurance cover extended to deposits

Creation of credit guarantee corporation

Creation of regional rural banks


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Phase 3

New phase of Indian Banking System with the advent ofIndian Financial & Banking Sector Reforms after 1991

Entry of Foreign Banks

Phone Banking and Net-Banking

Shelter from external macroeconomic shock

System become more convenient and swift


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Major reforms initiatives

Some of the major reform initiatives in the last decadethat have changed the face of the Indian banking are:-

Interest Rate Deregulation-Interest

Government equity in banks

New private sector banks

New areas have been opened up for bank financing


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Effect of New Technologies on

Banks The Indian banking sector has seen an acceleration

with the introduction of technological transformationlike

ATMs, telephone banking,

online banking,

web based products,

e-cheques, credit cards,

debit cards.


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Guidelines for FDI in Banking

In the private banking sector of India, FDI is allowedup to a maximum limit of 74 % of the paid-up capitalof the bank.

Foreign Direct Investment and Portfolio Investment in

the public or nationalized banks in India are subjectedto a limit of 20 % in totality.

This ceiling is also applicable to the investments in theState Bank of India and its associate banks.

FDI limits in the banking sector of India wereincreased with the aim to bring in more FDI inflows inthe country along with the incorporation of advancedtechnology and management practices.

P I i B i


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Pro ems ace y In ian Ban ingsector

FDI in Indian banking sector resolves the followingproblems often faced by various banks in the country:

Inefficiency in management

Instability in financial matters

Innovativeness in financial products or schemes

Technical developments happening across variousforeign markets

Non-performing areas or properties

Poor marketing strategies

Changing financial market conditions


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Benefits of FDI in Banking Sector

in India

Transfer of technology from overseas countries to thedomestic market

Ensure better and improved risk management in thebanking sector

Assures better capitalization

Offers financial stability in the banking sector in India


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growth in banking sector-(154)

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