MANAGEMENT AND ORGANISATIONAL SET-UP OF COMMERCIAL BANKS

MANAGEMENT OF COMMERCIAL BANKSA Banking company, like any other

company or corporate body, is an artificial person existing only in the eyes of law. It has separate legal entity with no physical existence of its own.

“Management is that process by which managers create, direct, maintain and operate purposive organisations through systematic, coordinated and cooperative human efforts”.

OBJECTIVES OF BANK MANAGEMENT

Maximum

of profitability

Social Responsibili

ty

To meet challenge of competitors

To improve the customer

services

Introduction

of new schemes

Introduction

of Technology

Manpower Planni

ng

Improvement of productivity

Improvement in the

system of inspection

Functions of bank management

Planning

Organising

staffing

directing

coordinating

controlling

FUNCTIONAL AREAS OF BANK MANAGEMENT

Deposit Mobilisation

Financial Management

Credit Management

Profit Evaluation

Liquidity Management

Investment Management

Marketing Management

Portfolio Management

ORGANISATIONAL SET-UP OF COMMERCIAL BANKS“Organizational set up is defined as a

system in which individuals and groups operating at different levels perform the tasks assigned to them within the frame work of delegated authority and responsibility which are rationally coordinated to achieve the desired organisational goals”.

An organisational set up consists of people who carry out differentiated tasks which are coordinated to contribute to organization's goals.

Features of Organisational set-up Commercial Banks

2. Regional or Zonal Offices

3.Hierarchical Management

a) Top Management

b) Middle Management

c) Branch Management

Banking Commission Recommendation on Restructuring Organisational Set-up of Nationalised Banks

Government of India appointed the Banking Commission in Febrauary 1969 under the Chairmanship of Sh R.G.Saraiya to study the organisational structure of the nationalised banks and to make suggestions to remodel the organisational structure to suit the needs of Indian society. The following important recommendations are given by the Banking Commission:

Continued….1. The organisational structure of all the

nationalised banks should be on the lines of that of the State Bank of India.

2. The Commission recommended the constitution of regional boards with statutory powers and responsibilities as in case of SBI

3. The head office of nationalised banks should be main concerned with planning and budgeting of setting up of goals for zonal offices in performing their functions.

4. There should be functional departments at head office level of nationalised bank dealing with budgeting and profit planning, economic research management development, public relations, organisation and methods, legal matters alongwith general departments like control over branches, central accounts.

5. The main function of top executive must be relation to policy formulation.

6. A zonal office should be there to control and guide the 200 to 300 branches.

7. The branch manager should be relieved from day-to-day activities to enable him to devote sufficient time to plan, coordination, control, training, public contacts and business development.

8. There should be separate departments for deposits, collections, remittances, safe deposit vaults, advisory services, accounts, cash clearing, advances etc.

Organising Principles of SBI

Targeted Business

Units

Senior Management

Forums

Lean and integrative corporate

centre

Business Group at Corporate Level I. Corporate Banking Group- The

group consists of three Strategic Business Units. These are:

Corporate Account Group

Relationship

managers

Chief operating officers

Project finance

Project Appraisal

unit

Marketing & Relationship management

leasing

credit

marketing

II. National Banking Group- The National Banking Group serves large and medium sized corporate sector, small industrial agricultural and institutional customers. The 13 Local Head Offices are constituted the Strategic Business Units under this group. Each LHO having two network of branches namely.

a) Development and Personal Bankingb) Commercial Banking Network

III. International Banking GroupInternational banking for Indian

CustomersInternational banking for Foreign

branchesIV. Associates and Subsidiaries

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