Workshop on Modern Banking

Presentation by: B.V.Raghunandan,

Faculty of Commerce, SVS College, Bantwal.

Venue: St. Agnes College,

Mangalore.

December20, 2006

Chapter I:Introduction

Meaning & Definition

-Accepting Deposits

-Lending or Investment

-Nature of Repayment

-Nature of Withdrawal

Significance of Banks

Savings Mobilisation

Remittance of Funds

Development of Bill Market

Well Developed Money market

Development of Capital Market

Public Finance

Financing the Nation

Risk Free Investment

Corporate Services

Social Banking

Evolution of Banking in IndiaPresidency Banks: Bank of Bengal in 1809,Bank of Bombay in 1840 & Bank of Madras in 1843Imperial Bank of India -1921Reserve Bank of India-1935State bank of India-1955Nationalisation of 14 Banks-1969Second Dose of Nationalisation –1980Narasimham Committee Reforms-1990sICICI Merger- 2003

Composition of Indian Banking System

Reserve Bank of India

Commercial Banks

Development Banks

Regional Rural Banks

Co-operative Banks

NABARD

Land Development Banks

Exim Banks

Reserve Bank of IndiaEstablished in 1935

Central Board of Directors with 20 members

1local Board for each of the four regions

Traditional central banking functions

Regulatory functions

Promotional functions

Commercial Banks

Public Sector Banks: 1+7+14+6=28

Private Sector Banks: Indian,foreign & New Generation Banks

Scheduled & Non-Scheduled banks

Development Banks

IFCI Ltd in 1948

ICICI Ltd in 1955

18 SFCs

Industrial Investment Bank of India (IRCI in 1971 and reincorporated in 1997

IDBI in 1964

Regional Rural Banks

Product of 20 point programme of the govt.

Scheduled Banks & Non-Scheduled Banks

Treated as cooperative societies

Sponsored by a public sector bank

196 RRBs covering 451 districts spread over 23 states having 14,552 branches

Area Restriction

Co-operative Banks

Three Tier Structure

Different Economic Groups

Most of the Functions of Commercial Banks

NABARDSet-up in 1982Took over ARCRefinanceInspection of RRBsRouting Branch Expansion applications of RRBsAsscn with World Bank & others

Linking SHGs and NGOs

Kisan Credit Card Scheme in collab with RBI,Comm. Banks, Coop Banks

Micro-Finance Initiative

Land Development Banks

Long-term finance to agriculture

Co-operative institutions

Mortgage is created on the land

50% of the market value of the land given as loan

Severe criticisms

Foreign Exchange Banks

Collection of Foreign Bills

Accepting Foreign Bills

Issue of letter of credit

Dealing in Foreign Currencies

Discounting foreign bills

Providing International trade Information to exporters & importers