Banking sector of india

Presented by:-Rakesh Babu-122

Rishav Dugar-128Rishu Narsariya-130

Shinu Simon-147Shruti Treasa-150

Sneha Bhudwar-158

BANKING SECTOR OF INDIA

General Bank of India – 1st bank of India(1786)

Reserve Bank of India -was established on 1 April 1935 during the British Raj in accordance with the provisions of the Reserve Bank of India Act, 1934

Slow growth and periodic failure

In 1949, the Banking Regulation Act was enacted which empowered the Reserve Bank of India (RBI) "to regulate, control, and inspect the banks in India.”

PHASE I (1951-1965)

1955:-Nationalization of Imperial Bank of India and

formation of State Bank of India. 1960:-Nationalization of SBI and subsidiaries

1962:- Deposit Insurance corporation was established

with aim to provide insurance cover to depositors, thereby protecting deposits of common man. 

1969:-‘Transitory period’- social banking

and nationalization(14 banks)

PHASE II (1965-1981)

The Government of India First 14 Nationalised banks:1. Bank of India2. Union Bank of India3. Bank of Baroda4. Bank of Maharashtra5. Punjab National Bank6. Indian Bank7. Indian Overseas Bank8. Central Bank of India9. Canara Bank10. Syndicate Bank11. United Commercial Bank12. Allahabad Bank13. United Bank of India14. Dena Bank

Creation of credit guarantee Corporation

Creation of regional Rural Banks(1975):-The Govt of India set up Regional Rural

Banks (RRBs) on October 2, 1975. The banks provide credit to the weaker sections of

the rural areas-small farmers, agricultural labourers, artisans and small entrepreneurs.

Initially, five RRBs were set up on October 2,1975.Capital share -50% by the central government,

15% by the state government and 35% by the scheduled bank.

Total authorized capital-  1 crore which has since been raised to  5 Crore.

1980 : Nationalisation of seven banks with deposits

over 200 crores.

1990 :- the nationalised banks grew at a pace of

around 4%, closer to the average growth rate of the Indian economy.

PHASE III(1981-1990)

1991 :-the Indian rupee was devalued.

The currency lost 18% relative to the us dollar.

Narsimahmam Committee advised restructuring the financial sector by a temporal reduced reserve ratio as well as the statutory liquidity ratio.

PHASE IV(1991-present)

Licensing a small number of private banks(New Generation tech-savvy banks) . eg :axis bank, Global Trust Bank.

This turning point should reinforce the market and was often called neo liberal.

all Foreign Direct Investment at that time was 10% (at present it has gone up to 74% with some restrictions).

POLICY OF LIBERALIZATION

System become more convenient and swift.

The country is flooded with foreign banks and their ATM stations. Efforts are being put to give a satisfactory service to customer. eg online banking.

Time is given more importance than money.

This move, along with the rapid growth in the economy of India , revitalized the banking sector in India

EFFECTS OF NEW POLICY

Phase I Slow growth rate

Phase II nationalization of 14 indian banks

Phase III the trend continues---7 more banks nationalized no such significant changes with a constant

growth rate

In A Nutshell !!

Phase IV New phase of Indian Banking System with

the advent of Indian Financial & Banking Sector Reforms after 1991.

Continued..

Focus only on corporate clientsLack of skill expertise in retail and structured

financeLack of distribution systemLimited use of technologyInefficient capital allocationCompetition in market

Challenges during the phases

FDI in banking sector can solve various problems of the overall banking sector. Such as

a) Innovative Financial Products.b) Technical Developments in the Foreign

Marketsc) Problem of Inefficient Management d) Non-performing Assets e) Financial Instability f) Poor Capitalization g) Changing Financial Market Conditions

FDI'S impact on Banking Sector

Technological Advancement

Improving Risk Management

Rural Banking

Developing a flexible model for rapid scale--up at optimal cost.

Ways ahead

Indian banking sector has 6th rank in all over the world rank.

SBI has 6500+ ATMs all over the country.ICICI bank has 3500+ ATMs all over the

country.RBI had printed 6,39,948 lakhs crore notes

till 6THNov 2008.SBI provides the facility and it is tie with

9200+ banks to use their ATM.Transaction done through ATMs is around

70,000 crore in a year

Benchmarks..

Thank you…!!