INDEXCHAPTER 1. CONTENT INTRODUCTION Origin of the word bank Nationalisation of Banks in India History of IOB 2. FUNCTIONS OF IOB Opening of various account Non-Resident Accounts Honoring and Stopping cheques Money laundering 3. SERVICES OF IOB Automatic Teller Machine (ATM) Internet Banking Mobile Banking Identification of Fake Notes 4. 5. RATIO ANALYSIS LOANS & ADVANCES Advances-General Instruction Retail Credit Interest Rates CONCLUSION BIBLIOGRAPHY 75 76 49 60 36 13 Pg.no. 3
Origin & Definition of Bank:Origin of the word bank: Most of the authors are of the opinion that word bank has been derived from Italian word banco or banca or French word beque, meaning a bench, other writers opine that the origin of the word bank is the German word bank, which means a heap of anything or joint stock fund.
Meaning and Definition of Bank: You know people earn money to meet their day-to-day expenses on food, clothing, education of children, housing, etc. They also need money to meet future expenses on marriage, higher education of children, house building and other social functions. These are heavy expenses, which can be met if some money is saved out of the present income. Saving of money is also necessary for old age and ill health when it may not be possible for people to work and earn their living. The necessity of saving money was felt by people even in olden days. They used to hoard money in their homes. With this practice, savings were available for use whenever needed, but it also involved the risk of loss by theft, robbery and other accidents. Thus, people were in need of a place where money could be saved safely and would be available when required. Banks are such places where people can deposit their savings with the assurance that they will be able to withdraw money from the deposits whenever required. People who wish to borrow money for business and other purposes can also get loans from the banks at reasonable rate of interest. Bank is a lawful organisation, which accepts deposits that can be withdrawn on demand. It also lends money to individuals and business houses that need it. Banks also render many other useful services like collection of bills, payment of foreign bills, safe-keeping of jewellery and other valuable items, certifying the creditworthiness of business, and so on.
Banks accept deposits from the general public as well as from the business community. Anyone who saves money for future can deposit his savings in a bank. Businessmen have income from sales out of which they have to make payment for expenses. They can keep their earnings from sales safely deposited in banks to meet their expenses from time to time. Banks give two assurances to the depositors a. Safety of deposit, and b. Withdrawal of deposit, whenever needed On deposits, banks give interest, which adds to the original amount of deposit. It is a great incentive to the depositor. It promotes saving habits among the public. On the basis of deposits banks also grant loans and advances to farmers, traders and businessmen for productive purposes. Thereby banks contribute to the economic development of the country and well-being of the people in general. Banks also charge interest on loans. The rate of interest is generally higher than the rate of interest allowed on deposits. Banks also charge fees for the various other services, which they render to the business community and public in general. Interest received on loans and fees charged for services which exceed the interest allowed on deposits are the main sources of income for banks from which they meet their administrative expenses. The activities carried on by banks are called banking activity. Banking as an activity involves acceptance of deposits and lending or investment of money. It facilitates business activities by providing money and certain services that help in exchange of goods and services. Therefore, banking is an important auxiliary to trade. It not only provides money for the production of goods and services but also facilitates their exchange between the buyer and seller. You may be aware that there are laws which regulate the banking activities in our country. Depositing money in banks and borrowing from banks are legal transactions. Banks are also under the control of government. Hence they enjoy the trust and confidence of people. Also banks depend a great deal on public confidence. Without public confidence banks cannot survive.5
Nationalisation of BanksNationalisation of Banks in India: After independence the Government of India (GOI) adopted planned economic development for the country (India). Accordingly, five year plans came into existence since 1951. This economic planning basically aimed at social ownership of the means of production. However, commercial banks were in the private sector those days. In 195051 there were 430 commercial banks. The Government of India had some social objectives of planning. These commercial banks failed helping the government in attaining these objectives. Thus, the government decided to nationalize 14 major commercial banks on 19th July, 1969. All commercial banks with a deposit base over Rs.50 crores were nationalized. It was considered that banks were controlled by business houses and thus failed in catering to the credit needs of poor sections such as cottage industry, village industry, farmers, craft men, etc. The second dose of nationalisation came in April 1980 when banks were nationalized. The following list contains a list of different types of banks in India. Central Bank: Reserve Bank of India (RBI)
Public Sector Banks (Nationalised banks): State Bank of India (SBI) State Bank of Bikaner & Jaipur State Bank of Hyderabad State Bank of Indore State Bank of Mysore State Bank of Patiala State Bank of Saurashtra State Bank of Travancore6
Bank of India Canara Bank Central Bank of India Corporation bank Indian Bank Indian overseas bank Syndicate Bank UCO Bank Allahabad Bank Andhra Bank Bank of Baroda Bank of Maharashtra Dena Bank Oriental Bank of Commerce Punjab & Sind Bank Union Bank of India United Bank of India Vijaya Bank IDBI Bank
Private Sector Banks: HDFC Bank ICICI Bank Federal Bank ING Vysya Bank Axis Bank Yes Bank7
Bank of Rajasthan Bharat Overseas Bank Catholic Syrian Bank Centurion Bank of Punjab City Union Bank Development Credit Bank Dhanalakshmi Bank Ganesh Bank of Kurundwad IndusInd Bank Jammu & Kashmir Bank Karnataka Bank Limited Karur Vysya Bank Kotak Mahindra Bank Lakshmi Vilas Bank Nainital Bank Ratnakar Bank SBI Commercial and International Bank South Indian Bank Amazing Mercantile Bank Punjab National Bank Rupee Bank Saraswat Bank Tamilnad Mercantile Bank Thane Janata Sahakari Bank Bassein Catholic Bank
Foreign Banks: ABN AMRO BNP Paribas8
Citibank India HSBC (Hongkong & Shanghai Banking Corporation) JPMorgan Chase Bank Bank of America Standard Chartered Bank Barclays Bank Deutsche Bank Royal Bank of Scotland Abu Dhabi Commercial Bank Ltd American Express Bank Antwerp Diamond Bank Arab Bangladesh Bank Bank International Indonesia Bank of Bahrain & Kuwait Bank of Ceylon Bank of Nova Scotia Bank of Tokyo Mitsubishi UFJ Calyon Bank ChinaTrust Commercial Bank Cho Hung Bank DBS Bank Krung Thai Bank Mashreq Bank Mizuho Corporate Bank Oman International Bank Societe Generale State Bank of Mauritius Scotia Taib Bank9
History of IOBHow it began: Indian Overseas Bank (IOB) was founded on February 10th 1937, by
Shri.M.Ct.M.Chidambaram Chettyar, a pioneer in many fields - Banking, Insurance and Industry with the twin objectives of specialising in foreign exchange business and overseas banking. IOB had the unique distinction of commencing business on 10th February 1937 (on the inaugural day itself) in three branches simultaneously - at Karaikudi and Chennai in India and Rangoon in Burma (presently Myanmar) followed by a branch in Penang. At the dawn of Independence IOB had 38 branches in India and 7 branches abroad. Deposits stood at Rs.6.64 Crs and Advances at Rs.3.23 Crs at that time. Pre-nationalisation era (1947- 69): During the period, IOB expanded its domestic activities and enlarged its international banking operations. As early as in 1957, the Bank established a training centre which has now grown into a Staff College at Chennai with 9 training centres all over the country. IOB was the first Bank to venture into consumer credit. It introduced the popular Personal Loan scheme during this period. In 1964, the Bank made a beginning in computerisation in the areas of inter-branch reconciliation and provident fund accounts. In 1968, IOB established a full-fledged department to cater exclusively to the needs of the Agriculture sector. At the time of Nationalisation (1969): IOB was one of the 14 major banks that was nationalised in 1969. On the eve of Nationalisation in 1969, IOB had 195 branches in India with aggregate deposits of Rs. 67.70 Crs. and advances of Rs. 44.90 Crs.10
Post - Nationalisation era (1969-1992): In 1973, IOB had to wind up its five Malaysian branches as the Banking law in Malaysia prohibited operation of foreign Government owned banks. This led to creation of United Asian Bank Berhad in which IOB had 16.67% of the paid up capital. In the same year Bharat Overseas Bank Ltd was created in India with 30% equity participation from IOB to take over IOBs branch at Bangkok in Thailand. In 1977, IOB opened its branch in Seoul and the Bank opened a Foreign Currency Banking Unit in the free trade zone in Colombo in 1979. The Bank has sponsored 3 Regional Rural Banks viz. Puri Gramya Bank, Pandyan Grama Bank, Dhenkanal Gramya Bank. The Bank setup a separate Computer Policy and Planning Department (CPPD) to implement the programme of computerisation, to develop software packages on its own and t