CHAPTER NO.1

BANKING IN INDIA

BANKING IN INDIA

Banking in India originated in the last decades of the 18th century. The

first banks were The General Bank of India, which started in 1786, and

Bank of Hindustan, which started in 1790; both are now defunct. The

oldest bank in existence in India is the State Bank of India, which

originated in the Bank of Calcutta in June 1806, which almost

immediately became the Bank of Bengal. This was one of the three

presidency banks, the other two being the Bank of Bombay and the Bank

of Madras, all three of which were established under charters from the

British East India Company. For many years the Presidency banks acted

as quasi-central banks, as did their successors. The three banks merged in

1921 to form the Imperial Bank of India, which, upon India's

independence, became the State Bank of India.

Banking in India originated in the first decade of 18th century with The

General Bank of India coming into existence in 1786. This was followed

by Bank of Hindustan. Both these banks are now defunct. The oldest

bank in existence in India is the State Bank of India being established as

"The Bank of Bengal" in Calcutta in June 1806. A couple of decades

later, foreign banks like Credit Lyonnais started their Calcutta operations

in the 1850s. At that point of time, Calcutta was the most active trading

port, mainly due to the trade of the British Empire, and due to which

banking activity took roots there and prospered. The first fully Indian

owned bank was the Allahabad Bank, which was established in 1865.

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By the 1900s, the market expanded with the establishment of banks such

as Punjab National Bank, in 1895 in Lahore and Bank of India, in 1906,

in Mumbai - both of which were founded under private ownership. The

Reserve Bank of India formally took on the responsibility of regulating

the Indian banking sector from 1935. After India's independence in 1947,

the Reserve Bank was nationalized and given broader powers.

HISTORY

Indian merchants in Calcutta established the Union Bank in 1839, but it

failed in 1848 as a consequence of the economic crisis of 1848-49. The

Allahabad Bank, established in 1865 and still functioning today, is the

oldest Joint Stock bank in India.(Joint Stock Bank: A company that issues

stock and requires shareholders to be held liable for the company's debt)

It was not the first though. That honor belongs to the Bank of Upper

India, which was established in 1863, and which survived until 1913,

when it failed, with some of its assets and liabilities being transferred to

the Alliance Bank of Simla.When the American Civil War stopped the

supply of cotton to Lancashire from the Confederate States, promoters

opened banks to finance trading in Indian cotton. With large exposure to

speculative ventures, most of the banks opened in India during that period

failed. The depositors lost money and lost interest in keeping deposits

with banks. Subsequently, banking in India remained the exclusive

domain of Europeans for next several decades until the beginning of the

20th century.

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Foreign banks too started to arrive, particularly in Calcutta, in the 1860s.

The Comptoire d'Escompte de Paris opened a branch in Calcutta in 1860,

and another in Bombay in 1862; branches in Madras and Puducherry,

then a French colony, followed. HSBC established itself in Bengal in

1869. Calcutta was the most active trading port in India, mainly due to

the trade of the British Empire, and so became a banking center.

The first entirely Indian joint stock bank was the Oudh Commercial

Bank, established in 1881 in Faizabad. It failed in 1958. The next was the

Punjab National Bank, established in Lahore in 1895, which has survived

to the present and is now one of the largest banks in India.

Around the turn of the 20th Century, the Indian economy was passing

through a relative period of stability. Around five decades had elapsed

since the Indian Mutiny, and the social, industrial and other infrastructure

had improved. Indians had established small banks, most of which served

particular ethnic and religious communities.

The presidency banks dominated banking in India but there were also

some exchange banks and a number of Indian joint stock banks. All these

banks operated in different segments of the economy.

The exchange banks, mostly owned by Europeans, concentrated on

financing foreign trade. Indian joint stock banks were generally under

capitalized and lacked the experience and maturity to compete with the

presidency and exchange banks.

This segmentation let Lord Curzon to observe, "In respect of banking it

seems we are behind the times. We are like some old fashioned sailing

ship, divided by solid wooden bulkheads into separate and cumbersome

compartments." The period between 1906 and 1911, saw the

establishment of banks inspired by the Swadeshi movement.

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The Swadeshi movement inspired local businessmen and political figures

to found banks of and for the Indian community. A number of banks

established then have survived to the present such as Bank of India,

Corporation Bank, Indian Bank, Bank of Baroda, Canara Bank and

Central Bank of India. The fervour of Swadeshi movement lead to

establishing of many private banks in Dakshina Kannada and Udupi

district which were unified earlier and known by the name South Canara (

South Kanara ) district. Four nationalised banks started in this district and

also a leading private sector bank. Hence undivided Dakshina Kannada

district is known as "Cradle of Indian Banking". During the First World

War (1914-1918) through the end of the Second World War (1939-1945),

and two years thereafter until the independence of India were challenging

for Indian banking. The years of the First World War were turbulent, and

it took its toll with banks simply collapsing despite the Indian economy

gaining indirect boost due to war-related economic activities. At least 94

banks in India failed between 1913 and 1918 as indicated in the following

table:

Years Number of banks

t hat failed

Authorised capital

(Rs. Lakhs)

Paid-up Capital

(Rs. Lakhs)

1913 12 274 35

1914 42 710 109

1915 11 56 5

1916 13 231 4

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1917 9 76 25

1918 7 209 1

NATIONALIZATION

By the 1960s, the Indian banking industry has become an important tool

to facilitate the development of the Indian economy. At the same time, it

has emerged as a large employer, and a debate has ensued about the

possibility to nationalize the banking industry. Indira Gandhi, the-then

Prime Minister of India expressed the intention of the GOI in the annual

conference of the All India Congress Meeting in a paper entitled "Stray

thoughts on Bank Nationalization." The paper was received with positive

enthusiasm. Thereafter, her move was swift and sudden, and the GOI

issued an ordinance and nationalized the 14 largest commercial banks

with effect from the midnight of July 19, 1969. Jayaprakash Narayan, a

national leader of India, described the step as a "masterstroke of political

sagacity."

Within two weeks of the issue of the ordinance, the Parliament passed the

Banking Companies (Acquition and Transfer of Undertaking) Bill, and it

received the presidential approval on 9th August, 1969. A second dose of

nationalization of 6 more commercial banks followed in 1980. The stated

reason for the nationalization was to give the government more control of

credit delivery. With the second dose of nationalization, the GOI

controlled around 91% of the banking business of India.

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After this, until the 1990s, the nationalized banks grew at a pace of

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

LIBERALIZATION

In the early 1990s the then Narasimham Rao government embarked on a

policy of liberalization and gave licenses to a small number of private

banks, which came to be known as New Generation tech-savvy banks,

which included banks such as UTI Bank (now re-named as Axis Bank)

(the first of such new generation banks to be set up), ICICI Bank and

HDFC Bank. This move, along with the rapid growth in the economy of

India, kick started the banking sector in India, which has seen rapid

growth with strong contribution from all the three sectors of banks,

namely, government banks, private banks and foreign banks.

The next stage for the Indian banking has been setup with the proposed

relaxation in the norms for Foreign Direct Investment, where all Foreign

Investors in banks may be given voting rights which could exceed the

present cap of 10%,at present it has gone up to 49% with some

restrictions.

The new policy shook the Banking sector in India completely. Bankers,

till this time, were used to the 4-6-4 method (Borrow at 4%;Lend at

6%;Go home at 4) of functioning. The new wave ushered in a modern

outlook and tech-savvy methods of working for traditional banks.All this

led to the retail boom in India. People not just demanded more from their

banks but also received more.

Current Situation

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Currently (2007), banking in India is generally fairly mature in terms of

supply, product range and reach-even though reach in rural India still

remains a challenge for the private sector and foreign banks. In terms of

quality of assets and capital adequacy, Indian banks are considered to

have clean, strong and transparent balance sheets relative to other banks

in comparable economies in its region. The Reserve Bank of India is an

autonomous body, with minimal pressure from the government. The

stated policy of the Bank on the Indian Rupee is to manage volatility but

without any fixed exchange rate-and this has mostly been true.

With the growth in the Indian economy expected to be strong for quite

some time-especially in its services sector-the demand for banking

services, especially retail banking, mortgages and investment services are

expected to be strong. One may also expect M&As, takeovers, and asset

sales.

In March 2006, the Reserve Bank of India allowed Warburg Pincus to

increase its stake in Kotak Mahindra Bank (a private sector bank) to 10%.

This is the first time an investor has been allowed to hold more than 5%

in a private sector bank since the RBI announced norms in 2005 that any

stake exceeding 5% in the private sector banks would need to be vetted

by them.

Currently, India has 88 scheduled commercial banks (SCBs) - 28 public

sector banks (that is with the Government of India holding a stake), 29

private banks (these do not have government stake; they may be publicly

listed and traded on stock exchanges) and 31 foreign banks. They have a

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combined network of over 53,000 branches and 17,000 ATMs. According

to a report by ICRA Limited, a rating agency, the public sector banks

hold over 75 percent of total assets of the banking industry, with the

private and foreign banks holding 18.2% and 6.5% respectively.

DEFINATION OF BANK

Banking is one of the key drivers of the U.S. economy. Banking provides

a safe place to save excess cash, known as deposits. It also supplies

liquidity to the economy by loaning this money out to help businesses

grow and to allow consumers to purchase homes, cars and consumer

products. Banks primarily make money by charging higher interest rates

on their loans than they pay for deposits.

The Federal Reserve is the nation's central bank. As such, it creates the

supply of money by lending it to the banking system, requiring the level

of reserves banks must keep on hand, and by regulating the prime interest

rate banks charge.

There are several types of banks. Commercial banks are the most

common, and include global banks such as Bank of America and

Citigroup. Community banks are smaller and focus on local service.

Online banks operate over the Internet.

Savings and loans target mortgages. Credit unions are usually restricted

to employees of companies or schools. Shariah banking was developed to

conform to the Islamic prohibition against interest rates.

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In recent years, banking has become very complicated as banks have

ventured into sophisticated investment and insurance products. This level

of sophistication led to the banking credit crisis of 2008.

Examples: The economy could not function without banking.

TYPES OF BANK

All types of Banks in India are regulated and the activities monitored by a

standard bank called the Reserve Bank of India that stands at the apex of

the banking structure. It is also called the Central Bank, as major banking

decisions are taken at this level. The other types of banks in India are

placed below this bank in the hierarchy.

The major types of banks in India are as follows:

Public sector banks in India - All government owned banks fall in this

variety. Besides the Reserve Bank of India, the State Bank of India and

its associate banks and about 20 nationalized banks, all comprises of the

public sector banks. Many of the regional rural banks that are funded by

the government banks can also be clubbed in this genre.

Private sector banks in India - A new wave in the banking industry

came about with the private sector banks in India. With policies on

liberalization being generously taken up, these private banks were

established in the country that also contributed heavily towards the

growth of the economy and also offering numerous services to its

customers. Some of the most popular banks in this genre are: Axis Bank,

Bank of Rajasthan, Catholic Syrian Bank, Federal Bank, HDFC Bank,

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ICICI Bank, ING Vysya Bank, Kotak Mahindra Bank and SBI

Commercial and International Bank. The Foreign Banks in India like

HSBC, Citibank, and Standard Chartered bank etc can also be clubbed

here.

Cooperative banks in India - With the aim to specifically cater to the

rural population, the cooperative banks in India were set up through the

country. Issues like agricultural credit and the likes are taken care of by

these banks.

MAIN TYPES OF BANK

The extent of ownership determines the type of banks that you see in

India. Decades ago, nationalized banks dominated the banking sector in

India. In 1969, the major nationalization of banks was spearheaded by

none other than Prime Minister Indira Gandhi. The purpose was to spread

awareness to rural areas and make cheap finance options available to the

poor and needy farmers. That year, 14 major commercial banks were

nationalized.

Today, the banking scenario has changed considerably. The following are

the main types of banks in India:

Privately Owned: These banks operate on a purely profit basis. Also

called central banks and new generation banks, these are controlled by the

state governments of their respective countries. While they are known to

offer quick, easy and convenient options for customers, they are not

considered as reliable and committed to growing the wealth of their

customers as nationalized banks.

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Publicly Owned:These banks are operated and controlled by the

government. These banks actively maintain a huge number of operations

that constitute the country’s liquidity in the banking sector. They are

considered safe, reliable and committed to the customers and the process

established by the Reserve Bank of India. These banks handle a number

of tasks pertaining to the banking sector. Publicly owned banks also

determine the interest rates that other banks in the country offer.

Other Categories of Banks

The following categories include larger banks that have broader and

multiple divisions:

Retail banks: These banks deal with consumers and small business

owners directly. The major products offered by them include savings and

current accounts, credit cards, and loans, such as mortgages. These also

cater to high net worth clients offering them wealth management

services.These can be further divided into

Offshore banks: Most of these are private banks that operate in spheres

of reduced taxes.

Community banks: These banks operate on a local basis and serve

people and markets that have usually been devoid of banking services.

Postal savings banks: These banks operate in collaboration with the

nation’s national postal systems.

Building societies: Typically owned by their clients, these banks offer a

broad range of retail banking services.

Ethical banks: These banks only acknowledge investments that are

socially and environmentally useful.

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Business banks: These banks serve medium scale businesses and

organizations.

Corporate banks: These banks typically deal with major business

entities.

Investment banks: These banks help clients in mergers and acquisitions

and other services related to financial markets. Some investment banks

conduct underwriting services only. Some investment banks are merchant

banks that perform traditional banking activities related to trade-finance.

All types of banks function well based on the extent of trust they are able

to communicate with their customers. Their customers, in turn,

recommend them to others and avail more services offered by these

banks, expecting complete safety of their dealings.

SCHEDULED BANK

Amendment in Schedule VI of the Companies Act by Notification No.

GSR 78 dated 4th January, 1963, requires that amounts in respect of

balances with “Scheduled Banks” should be disclosed separately from

other Banks.

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“Scheduled Bank” is defined by Section 5(1) (m) of the Banking

Companies Act, 1949 as “a bank for the time being included in the

Second Schedule to the Reserve Bank of India Act, 1934”. Classification

in this respect in regard to accounts with banks situated in foreign

countries presents difficulties, in that no such distinction exists in respect

of foreign branches of the Banks, which may again be Indian or foreign.

Which of the following bank accounts should be grouped as bank

balances with Scheduled Banks?

(a) Foreign branches of Banks incorporated in India, the names of which

Banks are included in the aforementioned Schedule e.g., Decca branch of

X Bank Ltd.

(b) Foreign branches of Banks incorporated outside India, Indian

branches of which banks only are included in the aforementioned

Schedule—e.g., Dacca branch of Y Bank of Pakistan Ltd. This was only

Calcutta Branch in India.

(c) Foreign branches of Banks incorporated outside India which have no

Indian branches and as such no names in this respect are included in the

aforementioned Schedule, say, Z Bank Ltd.

Opinion June 4, 1969

A ‘Scheduled Bank’ is defined in Section 2(e) of the Reserve Bank of

India Act, 1934, and therefore in the Committee’s view any deposit with

such a bank including deposits with branches situated abroad of such a

bank should be treated as deposits with a Scheduled Bank Accordingly, in

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the opinion of the Committee the replies to the questions raised are as

follows:

(a) Deposits with the foreign branch of an Indian bank which is a

scheduled bank should be treated as a deposit with a scheduled bank.

(b) Deposit with the foreign branches of foreign banks who have offices

in India and who are considered to be scheduled banks should also be

treated as deposits with scheduled banks.

(c) Deposits with foreign branches of banks having no offices in India

cannot be considered as deposits with the scheduled banks, as, in any

event, their names will not appear in the schedule to the Reserve Bank of

India Act.

NON SCHEDULED BANK

"Non-scheduled bank in India" means a banking company as defined in

clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949),

which is not a scheduled bank". The banks which are not under the

purview of second schedule of RBI Act

The bank which are not registered in the list of central bank under its

charter are known as non-scheduled bank. They are not bound to perform

banking service according to the policies & instruction of central bank e.g

Bank of Punjab was a Non scheduled bank.

These banks do not fulfill the requirement qualification of a scheduled

bank as prescribed by central bank. They also do not enjoy the public

confidence. In many countries, many non-scheduled bank are also

working.

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Non scheduled banks are those banks which are not registered under

scheduled of RBI act, 1934. In India, only Jammu & Kashmir bank is not

scheduled bank.

May 1997, there is no non-scheduled commercial bank exists in India.

IMPORTANCE OF BANK

In this way they become very effective partners in the process of

economic development. Today, modern banks are very useful for the

utilization of the resources of the country. The banks are mobilizing the

savings of the people for the investment purposes. The savings are

encouraged and saving rate increases. If there would be no banks then a

great portion of a capital of the country would remain idle.

A bank as a matter of fact is just like a heart in the economic structure

and the Capital provided by it is like blood in it. As long as blood is in

circulation the organs will remain sound and healthy. If the blood is not

supplied to any organ then that part would become useless. So if the

finance is not provided to Agriculture sector or industrial sector, it will be

destroyed. Loan facility provided by banks works as an incentive to the

producer to increase the production.

Nobody wants to credit you money if you don't have a depository

account. You get superior interest rates when you have a good times past

of barrowing money and paying it back. Good credit is an advantage.

No credit or bad credit is a Liability. No matter which that makes life

easier is ok with me.

Without bank, there would be no investment. We would all run out of

money and back to bargain. By the time you earned enough to buy

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banquet you would not have an adequate amount to pay for a bed to sleep

in.

Banking is why we are able to do all the things we do. We hate the

bankers because we believe that they do nothing for us. If you are given

$10,000US at the beginning of the year and compensated everyday you

work. Without banking you would not have enough money to make it

through one year in the average American city. Please commit to

memory, you will have to run quarters and get your money from beneath

the mattress when ever you find amazing you wish to buy. The time loss

alone would harm most lives Banking is now an essential part of our

economic system. Modern trade and commerce would almost be

impossible without the availability of suitable banking services. First of

all, banking promotes savings. All manner of people, from the ordinary

labourers and workers to the rich land owners and businessmen, can keep

their money safely in banks and saving centers.

Secondly, banking promotes investments.

Banks easily invest the money they get in industry , agriculture and trade.

They either invest it directly or advance loans to other invensters.

Thirdly ,it is most through banks that foreign trade is carried on. Whether

we export or import, it is through banks that money is transferred from

one country to another. For example, bills of exchange and letters of

credit are the regular ways banks use to transfer money.

The important of bank system is the facilities for the of companies and

production and necessary for economically system, also controlled for the

money circle and inflation.

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Banking is financial institution that accepts deposit and channels those

deposits into lending activities Importance of banking in an econony

cannot but be emphasized. Banking plays the role of an intermediary ie

movement of resources from places of surplus to places of deficit. Via

this role resources are evenly distributed in the economy

Bank plays an important role in promoting economic development of a

country. Bank provides necessary funds for executive program in the

process of economic development. They collect savings of large masses

of people scattered throughout the country, which is the absence of bank

world have remained idle and unproductive. These amounts are collected,

pooled together and made available to commerce and industry for meting

the requirement. This provides finance for successfully carrying on

various stages of production as well as distribution. Bank stimulate the

habit of savings amount people by the security and interest they offer

with these savings which are deposited by people are in position to utilize

the deposited amount more productively.

The bank increased the transaction capacity of the customers by

advancing loans when they require for additional funds to finance their

expanded program of transaction. In short, the economic development of

a particular country depends on the sound banking system.

CHAPTER NO.2

PUBLIC SECTOR BANK

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INTRODUCTION

A Public Sector bank is one in which, the Government of India holds a

majority stake. It is as good as the government running the bank.

Since the public decide on who runs the government, these banks that are

fully/partially owned by the government are called public sector banks.

The term public sector banks is used commonly in India. This refers to

banks that have their shares listed in the stock exchanges NSE and BSE

and also the government of India holds majority stake in these banks.

They can also be termed as government owned banks.

A Public sector bank is a bank that is owned by the government. The

government owns and controls the banks operations. The chairman,

managing director and other senior officials of the bank are answerable to

the ruling government regarding their functions and operations.

The first nationalized or public sector bank of India was State Bank of

India. It was nationalized in the year 1955. Subsequently many banks

were nationalized in the year 1969 and some more in 1980. SBI is also

the largest bank in India.

Institutional credit support plays a catalytic role in accelerating the pace

of economic development of a country. In the context of developing

economy of India, bank finance plays a crucial role in pushing the

agricultural economy on to the progressive pathway and helping develop

rural India.

Indian banking, appreciably, over the years, has emerged from being a

purveyor of credit to be an engine of economic development. A historic

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review of the State Bank of India, a giant among the public sector

commercial banks, and the subsequently in nationalized commercial

banks, reveals the emerging promising trends in the deposit mobilization,

deployment of credit with developmental dimension added to it,

prioritization of sectoral financing and social responsibility assumed by

the banks. Along with promising trends in the progressive march of the

public sector banks, certain disturbing trends are notice. Hence, the vital

importance of making an in-depth study of the changing trends in the

Indian public sector commercial banks so that policy sector commercial

banks so that policy corrections can be made for enabling them play a

more effective developmental role in the context of resurgent national

economy of India. Institutional credit support plays a catalytic role in

accelerating the pace of economic development of a country. Indian

banking, appreciably, over the years, has emerged from being a purveyor

of credit to be an engine of economic development. A historic review of

the State Bank of India, a giant among the public sector commercial

banks, and the subsequently in nationalized commercial banks, reveals

the emerging promising trends in the deposit mobilization, deployment of

credit with developmental dimension added to it, prioritization of sectoral

financing and social responsibility assumed by the banks. Along with

promising trends in the progressive march of the public sector banks,

certain disturbing trends are notice. Hence, the vital importance of

making an in-depth study of the changing trends in the Indian public

sector commercial banks so that policy sector commercial banks so that

policy corrections can be made for enabling them play a more effective

developmental role in the context of resurgent national economy of India.

Public Sector Banks working without top officials

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As many as seven public sectors banks are working without Executive

Directors at present. The Union government is also in no hurry to

complete the process of appointment of the seven Executive Directors

who have already been selected through the process of interviews

conducted on January 9, 2007. The Prime Minister Man Mohan Singh has

also given his consent for the appointment of seven Eds. Now, this is

being said that some of the selected candidates have strong support in

political circle and now they want to change their postings want to change

their postings. Due to the new requests with such strong political backing,

the banking department is delaying the process of final appointments.

According to the report, Dena Bank, United Bank of India and Allahabad

Bank are still working without any ED. A CMD of a public sector bank

said that unavailability of top officers affects the working of a bank.

Private sector banks such as ICICI Bank and Axis Bank have shown

improvement in past some years because of the same top management for

a longer period. In the year 2007, as many as 17 EDs will retire and the

banking department had started the selection process for the same posts

way back in September 2006. Among the 90 General Managers in PSU

banks, who have showed interests in the post of ED, 17 were selected

after the interviews conducted on January 8 and 9 this year. Out of 17

candidates, eight were posted on June 6 and for remaining nominees, the

process was initiated on June 22, 2007. On October 11, the PM had also

given the consent to the posting. Still the process of final posting has not

yet completed because some candidates actually wanted to shift their

postings. The report further said that if the government accepts requests

of some selected candidates to change their postings, the process would

take another two months to complete the process.

HISTORY

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Without a sound and effective banking system in India it cannot have a

healthy economy. The banking system of India should not only be hassle

free but it should be able to meet new challenges posed by the technology

and any other external and internal factors. For the past three decades

India's banking system has several outstanding achievements to its credit.

The most striking is its extensive reach. It is no longer confined to only

metropolitans or cosmopolitans in India. In fact, Indian banking system

has reached even to the remote corners of the country. This is one of the

main reasons of India's growth process. The government's regular policy

for Indian bank since 1969 has paid rich dividends with the

nationalization of 14 major private banks of India. Not long ago, an

account holder had to wait for hours at the bank counters for getting a

draft or for withdrawing his own money. Today, he has a choice. Gone

are days when the most efficient bank transferred money from one branch

to other in two days. Now it is simple as instant messaging or dial a pizza.

Money have become the order of the day. The first bank in India, though

conservative, was established in 1786. From 1786 till today, the journey

of Indian Banking System can be segregated into three distinct phases.

They are as mentioned below:

● Early phase from 1786 to 1969 of Indian Banks

● Nationalization of Indian Banks and up to 1991 prior to Indian banking

sector Reforms.

● new phase of Indian Banking System with the advent of Indian

Financial & Banking Sector Reforms after 1991.

To make this write-up more explanatory, I prefix the scenario as Phase I,

Phase II and Phase III.

Phase I

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The General Bank of India was set up in the year 1786. Next came Bank

of Hindustan and Bengal Bank. The East India Company established

Bank of Bengal (1809), Bank of Bombay (1840) and Bank of Madras

(1843) as independent units and called it Presidency Banks. These three

banks were amalgamated in 1920 and Imperial Bank of India was

established which started as private shareholders banks, mostly

Europeans shareholders. In 1865 Allahabad Bank was established and

first time exclusively by Indians, Punjab National Bank Ltd. was set up in

1894 with headquarters at Lahore. Between 1906 and 1913, Bank of

India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank,

and Bank of Mysore were set up. Reserve Bank of India came in 1935.

During the first phase the growth was very slow and banks also

experienced periodic failures between 1913 and 1948. There were

approximately 1100 banks, mostly small. To streamline the functioning

and activities of commercial banks, the Government of India came up

with The Banking Companies Act, 1949 which was later changed to

Banking Regulation Act 1949 as per amending Act of 1965 (Act No. 23

of 1965). Reserve Bank of India was vested with extensive powers for the

supervision of banking in India as the Central Banking Authority.

During those days public has lesser confidence in the banks. As an

aftermath deposit mobilization was slow. Abreast of it the savings bank

facility provided by the Postal department was comparatively safer.

Moreover, funds were largely given to traders.

Phase II

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Government took major steps in this Indian Banking Sector Reform after

independence. In 1955, it nationalized Imperial Bank of India with

extensive banking facilities on a large scale especially in rural and semi-

urban areas. It formed State Bank of India to act as the principal agent of

RBI and to handle banking transactions of the Union and State

Governments all over the country.

Seven banks forming subsidiary of State Bank of India was nationalized

in 1960 on 19th July, 1969, major process of nationalization was carried

out. It was the effort of the then Prime Minister of India, Mrs. Indira

Gandhi. 14 major commercial banks in the country was nationalized.

Second phase of nationalization Indian Banking Sector Reform was

carried out in 1980 with seven more banks. This step brought 80% of the

banking segment in India under Government ownership.

The following are the steps taken by the Government of India to Regulate

Banking Institutions in the Country:

● 1949: Enactment of Banking Regulation Act.

● 1955: Nationalization of State Bank of India.

● 1959: Nationalization of SBI subsidiaries.

● 1961: Insurance cover extended to deposits.

● 1969: Nationalization of 14 major banks.

● 1971: Creation of credit guarantee corporation.

● 1975: Creation of regional rural banks.

● 1980: Nationalization of seven banks with deposits over 200 crore.

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After the nationalization of banks, the branches of the public sector bank

India rose to approximately 800% in deposits and advances took a huge

jump by 11,000%. Banking in the sunshine of Government ownership

gave the public implicit faith and immense confidence about the

sustainability of these institutions.

Phase III

This phase has introduced many more products and facilities in the

banking sector in its reforms measure. In 1991, under the chairmanship of

M Narasimham, a committee was set up by his name which worked for

the liberalization of banking practices. The country is flooded with

foreign banks and their ATM stations. Efforts are being put to give a

satisfactory service to customers. Phone banking and net banking is

introduced. The entire system became more convenient and swift. Time is

given more importance than money. The financial system of India has

shown a great deal of resilience. It is sheltered from any crisis triggered

by any external macroeconomics shock as other East Asian Countries

suffered. This is all due to a flexible exchange rate regime, the foreign

reserves are high, the capital account is not yet fully convertible, and

banks and their customers have limited foreign exchange exposure.

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CHAPTER NO.3

CAREER IN PUBLIC SECTOR BANK

INTRODUCTION

Banks are considered the backbone of a country’s economy. It’s truer for

a developing country like India. Indian Banking system is very strong. In

the global financial turmoil that happened sometime ago, our country was

least affected because of soundness of Indian Banking and Financial

system. In fact many countries of the world are trying to learn lessons

from our disciplined system of Banking. Banks in India are not only

strong but are also growing fast. According to studies. Banking sector is

one of the fastest growing sectors in the country. This growth has brought

many opportunities.

Indian Banking Scenario

Regulation of banking system in India started with Banking Regulation

Act, 1949. Banks in India used to be in private hands. In 1969, 14 big

private banks were nationalized bringing them under the ownership of

government. After 11 years, in 1980, six more banks were nationalized.

Of these 20 banks, one New Bank of India got merged in Punjab National

Bank. Now in all there are 27 public sector banks in the country

consisting of 19 nationalized banks and 8 banks from State Bank group

(State Bank of India and its associates). In the last two decades Public

Sector Banks in India have witnessed a transition from traditional

banking to modern technology driven banking. Exposure to competition

has made these banks re-engineer and re-structure their processes,

systems and product line.

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After economic liberalization these banks have been given enough

freedom to do so. However, for various matters these are required to

follow guidelines issued by Ministry of Finance, Reserve Bank of India

and Indian Banks Association. Post nationalization, the Banks were asked

to open more branches in rural areas. Large number of people was

recruited to man these newly opened branches. Expanded network gave a

new identity to these banks and millions of new customers came to the

fold of Banking. The business of Banking moved from class banking to

mass banking.

Manpower requirements

Public sector banks in India employ more than 7 lakh people at present.

Of these a large number of people will be retiring in next 5-6 years. To

fill this gap and to take up the growing business the Banks are on a

recruiting spree as can be seen in media and from vacancy

announcements. Only this year about 40,000 vacancies have been created

in public sector banks due to retirements, resignations and expansion of

business. Earlier recruitments in public sector banks were made through

Banking Service Recruitment Boards. Each board was taking care of

manpower requirements of 3-5 banks in a certain geographical area. Now

the boards have been abolished and each public sector bank may

announce its own recruitment process for the number of people required

from time to time. Earlier officers were recruited only in Junior

Management Grade. Now public sector banks are offering direct

employment in middle and senior management cadres as well. Thus for

both fresher and experienced people career opportunities are available in

public sector banks. To meet their manpower requirements these banks

are presently recruiting in large numbers both in clerical and officer

cadre.

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Clerical Positions

A clerk is mostly a front staff in a bank. Depending on the requirement

clerks are placed at different counters of the banks e.g. savings, deposit,

current deposit, term deposit, retail loans, cash credit, agricultural loans,

credit cards, government business, cash receipt or payment etc. Maximum

customer interface in banks occurs at these counters managed by clerical

staff.

Eligibility for Clerks

The minimum age for applying for the position of a clerk in nationalized

or private sector banks is 18 years. The maximum age limit is 28 years.

There is no uniformity with regard to educational qualification for

eligibility. This becomes clear from the recently advertised positions of

clerks in different banks. In one bank graduates with minimum 40%

marks are considered eligible while another bank is accepting candidates

with 60% marks in aggregate in 12th standard. Those having a university

degree (in any class) could also apply. This bank has put another

condition of having secured minimum 60% marks in mathematics at

SSC/10th standard. As most of the recruitments in clerical cadre in public

sector banks are made state-wise, the candidate applying for the post in a

particular State is expected to be proficient in the language of the State.

Proficiency means knowing to read, write, speak and understand the

language.

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Examination pattern for clerks

Eligible candidates are asked to appear in a written examination. This

written examination is objective in nature consisting of four papers viz

1. Test of reasoning ability and numerical aptitude

2. Test of clerical aptitude

3. Test of English language

4. Test of General awareness

The structure of written examination may differ from bank to bank. To

qualify in the written test the candidate should pass in each of the

objective test separately with required minimum qualifying marks. It is

also necessary that the candidate obtains a certain percentage of marks to

be eligible for moving to next stage of selection. From those who get the

qualifying marks as above, the bank calls a fixed number of people to

appear in the interview process. The number of people called for

interview is in a certain proportion of available vacancies. This interview

is a simple process in which question about candidates’ academic and

cultural background, career goals etc. are asked. Effort is also made to

know about his aptitude for the job and customer orientation etc. Most of

the people applying for a clerks position in the bank are fresh from

college. They should be ready to answer questions about their choice of

subjects, streams etc. From people who are employed or have work

experience, questions may be asked about the job or assignments they

have been handling. In case of interview also minimum qualifying marks

are prescribed. The final merit list is drawn by adding up marks obtained

by the candidate in the written test and interview.

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Career Prospects

Finally selected candidates can look forward to a fruitful career in the

bank, they join. All public sector banks provide training to new

employees for equipping them to take up their assignments. Induction

training which happens immediately or soon after joining is the first

training programmes they attend. Subsequently they are offered training

in various banking disciplines. Public sector banks are few organisation

which offer promotion from one cadre to another. Thus those who join as

clerks may be promoted as officers, as per banks norms. For bright

candidates, in some banks, this promotion from a clerk to officer is

possible in a period as short as one year.

Recruitments in Officers cadre

Vacancies in officer’s cadre in public sector banks are filled from within

the organization after promotion of clerks and also by direct recruitment.

To meet the shortage of manpower in officers’ cadre, now a day the

public sector banks are required to recruit large number of officers. Most

of the vacancies for which recruitments are made are in Junior

Management Graduate Scale I, which is the entry level position for

joining a public sector bank as an officer. This entry level position is

known as that of probationary officer or management trainee. Bank

probationary officers can come from any discipline or field of study,

although there is a misconception that only people from commerce or

finance background are eligible. A finance or commerce background may

help the candidate adjust to the banking environments faster than others

but banks recruit talents from diverse backgrounds of science, literature

etc.

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The minimum age to apply for entry level officers position is 21 years

while maximum age may be 26 years or above as decided by individual

banks. As regards qualification, the candidate should at least be a

graduate from a UGC recognized university. In some banks only first

class graduates are considered eligible. For some other banks the

minimum percentage of marks required is 55 percent. Those with post

graduate qualification may get some relaxation in qualifying percentage

of marks, in few cases. There have also been instances of banks

preferring to recruit people with post graduate degree or diploma in

management. Particular recruitment advertisement should be carefully

studied to know the eligibility criteria. The test for probationary officers

consists of the following objective papers:

1. General Awareness

2. Data Interpretation and Logical reasoning

3. Verbal Reasoning

4. English

Some banks prefer to include a descriptive paper also in the test process.

In this paper the candidate is required to write essay and attempt

composition. Minimum qualifying marks are prescribed for both

objective and subjective papers. Candidates are called for interview on

the basis of marks obtained in written examination. Interview for officer’s

position is expected to be more comprehensive. Here along with general

questions, the interview panel may try to judge the candidates

understanding of nation's economy, issues before the economy etc. One

should always be ready to answer questions like ‘why you want to choose

banking as a career?’, ‘what are your expectation from the job’ etc.

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Recruitment in higher scales

With some experience one can expect to join a public sector bank in a

higher scale. Most of the vacancies in higher scales exist in Middle

Management Grade II or III. Of course the candidate should fulfill the

eligibility criteria as regards to age and qualification. The experience

required for higher scales keeps changing from bank to bank; it may be

one year or more. Professionally qualified people (with qualifications like

MBA, CA etc) stand better chance in this regard.

Campus Recruitments

Since last 3-4 years public sector banks have started recruiting from

campus. This campus recruitment covers only a small part of their

manpower needs but it has opened a new window of opportunity to

students wanting to make a career in banks. From campuses banks are

taking MBAs from different disciplines, agriculture graduates, chartered

accountants etc.

Career Progression

There is a well defined career progression path in each public sector

bank. Performance and potential are key elements which determine this

career progression. Most senior officials in public sector banks started

their career as clerk or scale I officer only. In tune with the time banks

have reviewed their promotion policy and now for bright, hardworking

and knowledgeable employees it takes less time to move to higher scales.

In many banks a person who joined as an officer may reach to the

position of Genera Manager in 14 years. After that one can aspire for the

position of executive director or chairman of a bank.

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These are very high positions, nomination to which is decided by the

Government and not by the individual banks. Many public sector banks

have a network of foreign branches. Thus joining a public sector bank

gives you the opportunity of working abroad also. Transferability in a

bank job provides you the chance of seeing different parts of the country.

Career Options in HR

These include Recruiting, Training and Development, HRIS,

Administration and Benefits Management. Essentially, an HR manager

builds a company’s culture, handles employee relations, maintains

benefits and payroll, recruits new hires among several other

responsibilities entrusted to him/her. With a growing trend in the market

today and the importance being given to HR, there is an increased need

for HR professionals with relevant knowledge and skills.

Career progression of Officers

● Junior Management Grade – Scale I: Officer

● Middle Management Grade – Scale II: Manager

● Middle Management Grade – Scale III: Senior Manager

● Senior Management Grade – Scale IV: Chief Manager

● Senior Management Grade Scale V: Assistant General Manager

● Top Management Grade Scale VI: Deputy General Manager

● Top Management Grade Scale VII: General Manager

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List of Public Sector Banks in India

● Allahabad Bank

● Andhra Bank

● Bank of Baroda

● Bank of India

● Canara Bank

● Central Bank of India

● Corporation Bank

● Dena Bank

● IDBI Bank

● Indian Bank

● Oriental Bank of Commerce

● Punjab National Bank

● State Bank of India

● State Bank of Mysore

● State Bank of Hyderabad

● State Bank of Bikaner and

Jaipur

● State Bank of Indore

● State Bank of Patiala

● State Bank of Saurashtra

● State Bank of Travancore

● Syndicate Bank

● UCO Bank

● Union Bank of India

● Vijaya Bank

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CHAPTER NO.4

EMPLOYEE TRAINING & TRAINING PROGRAMS

INTRODUCTION

Trainers, consultants, and others involved in training and development

say that 9/11 changed the culture in government agencies dramatically.

Training—long considered to be just another business-as-usual activity in

many agencies—suddenly became critical. Regardless of population,

cities of all sizes share similar responsibilities, notably police and fire

protection, emergency services, and utilities. But while cities have

common functions, their commitment to training employees varies

widely. Similar to the private sector, where commitment from top

executives is necessary to drive programs forward, city managers and

other top government executives set the tone. Consequently, training and

development experts are helping government agencies develop ways to

recruit and retain high-caliber employees, and groom them for leadership

positions. In addition, they are implementing ways to transfer the

knowledge from departing workers to their successors.

Employee Training & HR Development

You are a DIY person and you want to find out everything about starting

and operating a business. There are so many resources out there and you

are overwhelmed by the amount of information you need to absorb.

Besides, which sources are reliable? After you swim through a sea of

“useful” tips, how do you put them into action? The quality of employees

and their development through training and education are major factors in

determining long-term profitability of a small business.

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If you hire and keep good employees, it is good policy to invest in the

development of their skills, so they can increase their productivity.

Training often is considered for new employees only. This is a mistake

because ongoing training for current employees helps them adjust to

rapidly changing job requirements. We offer seminars and workshops to

help you start, or improve your business operations. We focus on issues

that impact small business operators from high level business plan

writing to daily operational issues such as customer retention. Attendance

is limited to 10 – 15 people each. Employee training workshops are also

offered.

The model below traces the steps necessary in the training process:

● Organizational Objectives

● Needs Assessment

● Is There a Gap?

● Training Objectives

● Select the Trainees

● Select the Training Methods and Mode

● Choose a Means of Evaluating

● Administer Training

● Evaluate the Training

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Our Training Methods include:

On-the-job training is delivered to employees while they perform their

regular jobs. Off-the-job techniques include lectures, special study, films,

television conferences or discussions, case studies, role playing,

simulation, programmed instruction and laboratory training.

Orientations are for new employees.

Your business should have a clearly defined strategy and set of objectives

that direct and drive all the decisions made especially for training

decisions. Firms that plan their training process are more successful than

those that do not. Most business owners want to succeed, but do not

engage in training design that promise to improve their chances of

success. This is where we come in to help you achieve your goals, and

make your employees reach their potential.

Training Programs include:

● Communication skills training

● Computer and technical skills training

● Management and leadership training

● Diversity training

● Conflict management

● Workplace wellness

● Supervisor skills development

In addition to the above training programs, we also offer customized

training programs specific to your industry. We have partners in all

industries and can bring in experts to make sure you get the best results.

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1) COMMUNICATION SKILL TRAINING

Various types and forms of the Group Communication Skills Training are

used all over the world for those who are trying to improve their

communication (social, interpersonal, negotiating etc.) skills. Thousands

of books and articles devoted to these topics are published every year.

The training scheme based on the holistic Social Pedagogical Concept

developed by the Prussian educational thinker Friedrich Diesterweg in the

middle of the 19th century and on the Technology of Instruction Theory

created by the Russian psychologist Piotr Galperin in the middle of the

20th century and developed by their followers is widely spread in Europe

and used by social workers and psychologists for children and for adults

to improve their communication skills.. The concept of transforming

personal behavior from impulsive to reflexive level forms the basis of

active social psychological education. It is accomplished through

objectifying and assimilating to a wider spectrum of daily life models,

patterns and communication. As soon as a person realizes the

inconsistencies that his everyday impulsive social behavior has brought,

he or she becomes conducive to change learning new behavioral models,

patterns, approaches, and ways. These models and patterns form the basis

for new mental actions that ensure better communications in daily

activities than previously for the student. After learning these new models

and patterns of social behavior, they are gradually assimilated and

adapted into a person's consciousness and transferred back to his or her

unconscious impulsive level. Such transformations are accomplished

under the direction and influence of the referent group and trainer.

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Forms of Communication Skills Training

Among Communication Skills Training (CST) programs there are:

• partner style communications programs,

• conflict control programs,

• conducting business discussions programs, and

• public presentation programs, along with others.

Methods, means and techniques of CST

The basic means of Group CST are conducting role-playing games,

discussions and exercises in groups of two and three. Each participant

makes his or her own analysis of the group member's behavior and

provides feedback to the others. Both verbal reactions and the playback of

video or audio records of nonverbal reactions (e.g. motions, gestures,

poses, mimics, and eye contact, voice and speech patterns) are used as the

means of feedback. Such techniques are utilized for the following

applications:

• Establishing personal contact,

• Active listening,

• Reducing emotional tensions with the partner,

• Defending one's opinion, position, or point of view,

• Discussing organization and administration,

• Public presentations.

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The main methods that are used for objectification and creating positive

behavioral change are: Group analysis of the participant's behavior in the

role-playing games with hidden motive and/or conflict embedded in it;

analysis of discussions with distributed roles, which minimizes self

interest and leads to the development of joint solutions; and analysis of

public presentations. Analysis of playbacks of recorded role-playing

games, discussions, and presentations.

2) COMPUTER & TECHNICAL SKILL TRAINING

Computer skills refer to the ability to use the software and hardware of a

computer. Being "computer functional" is usually what is meant by one

with computer skills; computer literacy is only really evident in advanced

computer skills. They include:

Basic computer skills

• Knowing how to switch on the computer

• Being able to use a mouse to interact with elements on the screen

• Being able to use the computer keyboard

• Being able to shut down the computer after use

Intermediate skills

• Functional knowledge of word processing.

• How to use e-mail

• How to use Spreadsheets

• How to use Databases

• How to use the Internet

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• Installing software

• Installing an operating system

• Navigating a computer's filesystem.

Advanced skills include

• Programming

• Use of a computer for scientific research

• Fixing software conflicts

• Repairing computer hardware

3) TECHNICAL TRAINING

i) Enjoy significantly higher paying work.

Whether you’re employed or self-employed, strong technical skills allow

you to leverage technology to the hilt, and that leverage pays. The better

you understand the technology you use, the more value you can

efficiently extract from it. People gladly open their wallets to pay those

with in-demand technical skills.

ii) Save money.

Save money every time you can solve a technical problem on your own

instead of having to hire someone at a high hourly rate. This can add up

to substantial savings over time. Save money by taking advantage of low-

cost, high-tech solutions. For example, using VOIP Internet phone service

will save you a bundle over traditional phone service, and it only takes a

minor amount of technical skill to install. Actually disconnected my

whole house from the telephone company’s lines, so I could use all the

inside jacks for VOIP.

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iii) Save time.

You’ll save time by solving technical problems quickly instead of

scratching your head in confusion. There are many technical problems

that baffle novices but which require only a quick fix from someone with

adequate technical skills. I find it unfortunate when a friend gets ripped

off after taking their computer to a repair outlet, when the problem could

have been solved in a few seconds. Ignorance can be costly.

iv) Prevent problems.

You’ll prevent problems before they occur by intelligently maintaining

and upgrading your technology. Even a simple skill like keeping your

video and sound drivers up-to-date can prevent compatibility problems

down the road, especially if you play computer games.

v) Reduce frustration.

Technology isn’t particularly frustrating if you understand how it works.

A lack of understanding is frustrating. If something breaks, and you

know how and why it broke, then it’s just a fact to be dealt with rather

than an act of divine cruelty.

vi) Make intelligent technology purchases.

I don’t know many geeks who buy their computers at retail stores. It’s a

lot smarter to buy online if you know what to look for. You’ll get better

value, higher quality components, and more control over the final

product. A fun project I did in 2004 was to build my own PC from

scratch. I handpicked each component and ordered everything online. I

built the equivalent of a $2000 retail PC for about $900. I used Price

Watch to find great deals on all the components, and I followed the step-

by-step assembly instructions from My Super PC. I’ve been very pleased

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with its performance over the past couple years. Since technology

depreciates so rapidly, and since component quality can vary widely,

knowing how to buy great value at a great price is a very practical skill.

With most rapidly advancing components like CPUs, hard drives, and

video cards, there’s a fairly narrow price-performance sweet spot. Spend

too little, and you’re throwing money away on obsolescent goods. Spend

too much, and you’re overpaying for imperceptible performance gains.

Decent technical knowledge can help you target those sweet spots with

all your technology purchases, so you get the best bang per buck.

vii) Empower yourself.

Today it’s almost ridiculous how much technology can do. You can use

your computer to manage your whole life now, including your finances,

your calendar, and your entertainment. Knowing how to use technology

can add tremendous richness to your life. But if you lack the technical

skills, you’ll probably find it way too complicated to extract this value in

a reasonable amount of time.

viii) Access information efficiently.

Whenever you want to know something now, you can go online and get

the information in seconds. Sites like Google, Wikipedia, and Wiki How

truly place information at your fingertips, but it still takes a bit of

technical skill to craft intelligent queries when you’re searching for

something obscure. Need to buy a new suit? Want to see what movies

are playing near you? Want to become an early riser? If someone has

figured it out, it’s probably online. With an internet connection at hand,

we all become walking Wikipedias.

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ix) Earn money online.

This is one of the coolest benefits of technical know-how. With the right

technical skills, you can build your own income-generating web site.

Your computer (or some online server) will work tirelessly to make you

money 24/7. Even if it just pays for your coffee, that’s still better than

buying your own coffee, isn’t it? If it fails, at least you learned

something, and you can certainly try again. But what if it really works?

You might not need a job for the rest of your life. That seems like a

pretty good reason to go for it. Given how disgustingly cheap technology

is, I think it’s silly not to devote at least one of the millions of machines

on this planet to the task of paying your bills. Most computers are just

sitting there idle waiting for something to do, so put some of those

resources to good use. I’m not talking about getting VC money and

trying to make the next Google. My suggestion is to start a simple web

business you can run by yourself in your spare time with no expenses

except web hosting (no more than $20/month).

I’ve been earning income online since 1995, and I love it. It does require

some technical skill to build an income-generating web site, but those

skills are highly learnable, and it’s a lot easier today than it was 10 years

ago. (For example, see How to Make Money From Your Blog). Sure I

can write well enough, but without the technical skills to build traffic, this

site would be a ghost town. I do the creative work, technology handles

the grunt work, and visitors benefit from the value provided. It’s a pretty

nice system.

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x) Feel more confident and comfortable with technology.

Competence builds confidence. As you develop your technical skills,

you’ll feel more comfortable with all forms of technology. This will

encourage you to branch out and leverage technology even more. You

can listen to audio books on your portable MP3 player, take pictures with

your digital camera, and so on. You’ll feel in control of technology

instead of intimidated by it. The more technical experience you gain, the

faster you’ll adapt to new technology. You may fall behind the curve at

some point, but you’ll quickly catch up with a few days’ research. Like it

or not, strong technical skills are of major importance today. Don’t let

yourself be caught on the wrong side of the technology fence. No doubt

you’re now wondering, “OK, that’s all fine and dandy, Steve, but how do

I develop my technical skills if I wasn’t born a natural geek?” Never fear

— I’ll address that in a future article.

4) DIVERSITY TRAINIG

Diversity training is not a new idea. Diversity trainers use their expertise

in:

● conflict resolution,

● preparing organizations for increases in racial, ethnic, cultural, and

gender diversity,

● preparing employees for international work,

● safeguarding against harassment and unfair employment lawsuits,

● taking advantage of employee diversity to increase productivity,

● conducting cultural audits,

● managing sexual attraction in the workplace,

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● developing competencies needed to exploit the international

marketplace.

● Diversity training has existed for quite a while in some form or another,

although different labels were used to refer to it. Perhaps the most

globally shared label is cross-cultural training. Race relations training and

multicultural education are common labels used in the United States. As

the labels suggest, diversity training aims to combat racism, sexism,

exclusion, and ethnocentrism. However, today's marketplace offers an

additional connotation which is more positive. Diversity training aims to

give individuals and companies a competitive edge in an increasing

global community. DTUI courses provide the skills needed to get the

most out of interactions with people of a different race, gender, or

nationality. Diversity training is training for the purpose of increasing

participants' cultural awareness, knowledge, and skills, which is based on

the assumption that the training will benefit an organization by protecting

against civil rights violations, increasing the inclusion of different

identity groups, and promoting better teamwork. Diversity training has

been a controversial issue, due to moral considerations as well as

questioned efficiency or even counters productivity. Diversity training

can be a pleasurable profession when one has the skills needed to do the

work competently. Diversity training can cause more harm than good to

an organization, individual employees, and to the diversity profession

when the trainers are ill-prepared. Many well-intentioned diversity

trainers have left participants with an angry and bitter taste for such

training. Effective diversity trainers offer participants tools for managing

diversity according to specific behaviors that make trouble for them in

everyday interactions. DTUI provides the knowledge and skills needed to

help people help themselves in sticky intercultural interactions.

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Leading diverse teams

According to Michael Bird, many project managers may feel that they are

treading new territory as they lead project teams made of individuals

from different cultures, heterogeneous mixes, and differing

demographics. This signals a lack of understanding of the techniques

required to manage diverse teams which can lead to project managers

being less efficient and effective. This in turn can cause the team member

motivation, satisfaction levels and productivity to drop due to the lack of

knowledge and skills needed to lead diverse teams. Bird further states that

the project manager will need to refine and improve management

techniques and should complete a post project evaluation to measure the

overall results of managing the diverse teams. Based on Bird’s research,

the following positive approaches can be adopted by the project managers

leading such heterogeneous teams in order to seek positive effects of

managing diversity in project teams effectively:

● Recognize that diversity will bring a greater skills base when managed

properly

● Improve the overall climate on diverse project teams in order to

improve satisfaction, reduce conflicts, and improve team member

retention

● Encourage creativity, flexibility, and innovation among the team

members which will allow the injection of new ideas and challenge the

normal organizational mindsets

Bird further concludes in his article that managing diversity provides

greater opportunities for project teams with better performance, and

greater strategic awareness, which enables them to be more innovative

and responsive.

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5) LEADERSHIP MANAGEMENT TRAINING

This leadership management training programmed is designed to help

you to gain more confidence by showing you exactly how to get the best

from yourself and others, each day. We will show you practical methods

to help you become more effective and confident. The purpose of the

training is to improve performance and create a friendly and productive

working atmosphere.

Leadership management training objectives

Our management training focuses on the six essential leadership

management skills, namely:

a) To set and achieve goals.

b) To communicate clearly.

c) To manage time and priorities work.

d) To manage conflict and handle difficult people.

e) To create and sustain a positive mental attitude, especially during

tough times.

f) To inspire others and create a positive, productive atmosphere.

The training method follows this general pattern:

i) The trainer gives a clear explanation of the point in question.

ii) The trainer then demonstrates the principle and gives specific

examples.

iii) Then, the delegates practice by doing an exercise with each other.

iv) The delegates practice by doing exercise with the trainer.

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v) All points are supported with full written notes to take away.

vi) Delegates are asked to write down an associated action, for each point

made.

vii) (At the end of the day, we have about twenty such actions, from

which the delegates choose six which are the most personally

meaningful).

On this course, you will be using special memory techniques to ensure

that all the knowledge you gain, during the course, you will remember.

To avoid that from happening, we help you to retain the course content.

We do this by structuring our presentations to enable you to absorb new

knowledge, faster, easier and more effectively.

Consequently, the course will be of extra value to you: the new

knowledge will in your memory, when you need it, even in “the heat of

battle”.

6) SUPERVISORY SKILL TRAINING

Being a supervisor is not at all easy especially when you have to

supervise people of all kinds and behaviors, and people who may not take

kindly to your supervision. There are supervisors, and good supervisors.

Just being in charge of a position makes you a supervisor, but being a

good supervisor needs talent and supervisory skills. There are many

supervisory skills training programs aimed at providing the skills

necessary for the supervisors and make them better equipped at doing

their job of managing the subordinate staff. The main aim of these

training programs is to help the supervisors and the companies which

they work for, in managing the staff better and to bring out maximum

output from them. This is turn proves beneficial for the organization in

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the long run and also for the supervisor himself because he is now more

confident of dealing with the challenges at work. The most important

aspect of the soft skills taught or included in the supervisory skills

training program is that of attitude. A lot of things depend upon how the

supervisor chooses to deal with the situation at hand. The attitude

definitely has a great say.

The attitude at all times must be optimistic and enthusiastic. The attitude

of the supervisor definitely rubs on the workers to. No lazy or indolent

supervisor can expect to get work done or any tangible output from his

workers. The next on the list is definitely delegation. What ever the

amount of work to be done and the number of employees at hand, the

supervisor needs to learn to delegate work properly among the workers. It

could not be said that equal distribution of work is always acceptable,

because it so happens that some times some workers are capable of more

out put than others. But a skilled supervisor instantly judges the scenario

and delegates work according to the capability and the skill of the

workers. All these are just the basic or the rudimentary steps in the

supervisory skills training. The disciplined approach and the systematic

way of training of availed of, will be definitely very helpful for the people

who are ambitious of taking up a career in supervision or are already in a

job as a supervisor but are looking to hone their talent and get maximum

output out of their workers. There are numerous courses which provide

supervisory skills training, and many of them can be availed online too.

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Workplace Wellness Training

Laughing At & Understanding Good Humor Seminars (LAUGHS) offers

a variety of programs for management teams, employees, support groups,

patient groups, businesses, health organizations, college, universities,

conferences, schools, universities, hospitals, and social and civic

organizations. All workplace wellness training is custom tailored to the

client.

Many employees suffer from chronic and sometimes life threatening

illnesses. Humor and laughter produce muscle relaxation, reduced levels

of stress hormones in the blood, enhancement of the immune system and

pain reduction. L.A.U.G.H.S. workplace wellness training offers the

above mentioned groups a balance of lectures, interactive activities and

energizers. During these troubled times of managed care, downsizing,

mergers and ongoing restructuring, many employees are dangerously

close to becoming "Crispy Critters." Laughter and humor in the

workplace are needed today more than ever before because there isn't

much fun in medicine but there's a lot of medicine in fun. Interactive fun

activities are interspersed throughout the training. The icebreakers and

energizer exercises are intended to elicit joy and laughter and to give the

participants some immediate physiological and psychological effects of

laughter. After the training the participants feel energized, motivated.

They're ready to bring laughter and playfulness into their workplace to

improve their health and wellness.

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Program Objectives

Explore ways that humor can be used appropriately in the work

environment Learn about new discoveries and current developments in

humor and laughter as they relate to health Learn about the therapeutic

power of humor and laughter Learn the difference between stress and

stressors Explore different types of humor Learn about humor and

physical health Learn about humor and mental/emotional health Learn

how humor and laughter influence the workplace environment Increase

employees ability to find humor in work related stress Design and

implement effective "laughter groups" Learn how to incorporate humor

and laughter in everyday activities Learn how to create a "humor library"

at work

Conflict management training workshop:

Training managers to provide a conciliatory forum for addressing

disputes between staff members, is prudent practice. This is for a number

of reasons, not the least of which is it gives managers the skills and

confidence to effectively mediate differences among their staff. It also

provides staff with a way to deal with their differences in a conciliatory

way, with the support and assistance of their manager. Training that is

geared to teaching how to facilitate conflict management not just dispute

resolution, helps managers to assist staff take responsibility for their own

conduct, rather than being told what to do or not to do. As a starting

point for training managers to facilitate disputes, it is important for

trainers and the organization to be clear about the organization’s

objectives. Understanding the corporate culture and what the goals of

training are, is not necessarily a straightforward task. It is important for

instance, that trainers determine and organizations articulate, whether

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relationships and outcome have equal weight. The disputants may have

their own views and so may the trainers, but if the organization wants a

results-oriented mechanism (in which mended relationships is not the

key), it is important for trainers to know this. Another consideration may

be whether the organization wants the manager to ultimately decide the

solution, or otherwise clarify under what conditions the manager may be

directive. There are many variables in conflict management training such

as these, that are beyond basic tenets. That is, a "cookie cutter" program

is not a responsible model for the supplier to offer or the organization to

accept. Trainers need in addition to other variables, to tailor-make role

plays and ensure all experiential exercises specifically apply to the

organization and its stakeholders.

Training groups of 8-12 managers is an optimum number, as is

establishing individual and organizational measurement criteria, in

advance of the training. Another important variable in designing training

programs is the number of days of a workshop. Taking managers from

their work for more than a day at a time is not always feasible. With pre

and post-training coaching, a suggested model to sustain training is at the

very least, a "one-plus-one-plus-one". That is, day long training one

month apart over a three month (or better yet, one day monthly over a six

month period). The point of course, is to sustain learning and provide

follow up pertinent to actual experiences, beyond a one-off workshop.

That is, periodic audits by the trainer(s) to ascertain what issues arise,

provide real life situations for case studies, "real" plays and ongoing

discussions at the subsequent workshop.

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Post-workshop conflict coaching:

Depending on the circumstances, individual telephone or in-person

conflict coaching may be offered to the participants throughout and after

the conflict management training. This could be between the various

scheduled workshops, as well as after group training ends. Group

telephone coaching may also be used. Post-workshop coaching is aimed

at sustaining participants' conflict management skills. One-on-one

coaching after the process is complete is also helpful to ensure each

participant has gained sufficient insights, confidence and skills, to

facilitate disputes. Coaches are able to continue to coach people about

their specific needs and ensure action steps for their ongoing

development, are clearly articulated. A minimum of two post-workshop

sessions of an hour in length is suggested and ideally, group telephone or

direct coaching is implemented on an ongoing basis, for at least one time

a month, over a three to six month period.

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CHAPTER NO.5

RECENT METHODS USED IN TRAINING &

CASE STUDY

INTRODUCTION

Within a few years the global scenario has changed quite a lot. Need of

professionalism is clearly established to meet new challenges in various

fields of specialization. Despite back ground education; professionalism

can be achieved only with proper training. The most important question

facing us today is: How to make training better? some commonly used

methods are discussed in the following pages:

CASE STUDY:

A history of some events or set of circumstance with the relevant detail is

examined by the trainees. Case Studies fall into two broad categories:

a. Those in which the trainees diagnose the causes of a particular

problem.

b. Those in which the trainees set out to solve a particular problem.

This method was first used to introduce an empirical approach to

management education and training emphasis was put on the study of

typical cases of past practical experience. It is suitable where a cool loot a

the problem or set of circumstances, free from the pressures of the actual

event is beneficial. It provides opportunities for exchange of ideas and

consideration of possible solutions to problems the trainees will face in

the work situation.

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EXERCISE

Trainees are asked to undertake a particular task leading to a required

result following lines laid down by the trainers. It is usually a practice or

a test of knowledge put over prior to the exercise. It may be used to

discover trainee’s knowledge or ideas before further information or new

ideas are introduced. Exercise may be posed for individual or for group.

Suitable for any situation where the trainees need to practice following a

particular pattern or formula to reach a required objective. The trainees

are to some extent on their own. This is a highly active form of learning.

Exercises out frequently used instead of formal test to fined out how

much the trainee has assimilated. There is a lot of scope in this method

for the imaginative trainers.

APPLICATION PROJECT

Similar to an exercise but giving the trainees much greater opportunity

for the display of initiative and creative ideas. The particular task is laid

down by the trainer but the lines to be followed to achieve the objectives

are felt by the trainees. Like exercise, project may be set for either

individual or groups. Suitable for initiative and creative testing. Project

provides feedback on a range of personal qualities of trainees as well as

their range of knowledge and attitude to the job. Like exercise projects

may be used instead of formal tests. Again there is a lot of scope for the

imaginative trainers.

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IN BASKET (IN TRAY)

Trainees are given a series of files papers and letter similar to those they

will be required to deal with at the place of work. Trainees are asked to

take action on each piece of work. The results are marked or compared

with one another. Suitable for giving trainee desk workers a clear

understanding of the real life problems and their solutions. The

simulation of the real situation aids the transfer of learning from the

training to the work situation. It’s a valuable way of obtaining feedback

of the trainee’s progress. Also useful for developing attitudes towards the

work e.g. priorities customers, complaints, superiors etc.

BUSINESS GAMES

Trainees are presented with the information about a company financial

position, products market etc. They are given different management roles

to perform. One group may concerned with sales, anther with production

and so on. These decisions in terms of profitability is then calculated.

Suitable for giving trainee manager practice in dealing with management

problems. Simulation of the real life situation not only aids the transfer of

learning but is necessary because of trainee manager applying only road

theoretical knowledge to the work situation could cause major problems.

Also a valuable way of assessing the potential and performance of

trainees. It helps considerably in developing many aspects of a managers

role.

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SENSITIVITY TRAINING (GROUP DYNAMICS)

Trainees are put into situation in which:

1. The behavior of each individual in the group is subject to examination

and comment by the other trainees;

2. The behavior of the groups as a whole is examined.

(The trainer is a psychologist; sociologist or a person who has himself

received special training) A vivid way for the trainee to learn the effect of

his behavior on other people and the effect of their behavior upon him. It

increases knowledge of how and why people at work behave as they do .

It increases skill of working with other people. Also it is a valuable way

of learning the skill of communication.

ROLE PLAYING

Role playing has occupied an important place in extension training as a

method of simulating real life situations. It is an effective way of bringing

into the classroom real life situation which other wise may not be

possible. This method enables participants to understand better the

behavior of others as well as their own emotions and feelings. The trainer

has to brief the person who is going to play the role, describing the role to

be played and the manner in which it is to be played. After the role play

session is over it is discussed not only with the group but also with the

players as to how good or bad they have done it. This discussion

facilitated the learning process.

It is suitable for near to life practice in the training situation and is helpful

to the trainees. It is useful in strengthening the skills of human

interaction. It is helpful in assessing personal attitude, feelings and

behavior, thus developing empathy towards client.

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INTERACTIVE LECTURETTE

Traditional lectures are criticized on many counts. In order to overcome

drawbacks present in traditional lecture Interactive lectures is now being

adopted by the trainers. In this method aspects of communication and

adult learning involved in teaching and learning are carefully considered.

Interactive leacturette are brief, uses experiences of participants, allows

two way communication, facts or contents are organized form known to

unknown and simple to complex manner. In this trainers can use a variety

of modes to support lectures viz. questions, seeking examples, sharing

personal experiences from learner etc. It is good for making training

interaction participative and interesting. It helps in developing creativity

among participants.

SIMULATION GAME

Now a day many training organizations are training experts are utilizing

the techniques simulation game in the training programmes. A simulation

game combines the attributes of simulation with the attributes of games,

an activity in which participants follow prescribed rules. That differs

from those of reality as they strike to attain a challenging goal.

Some expert trainers are also utilizing behavior simulation games which

focus primarily on the processes of interpersonal relations, on how

decisions are made, and with what consequences, rather than on the

substance of the decisions.

It is suitable for enquiry oriented approach to teaching in the field of

social science. It facilitates the active participant’s involvement in

learning as it utilizes the discovery learning method in which participants

are directly immersed in a real or contrived problematic situation from

where they develop hypothesis test it and arrive at conclusion

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PROGRAMMED INSTRUCTION

Originally the term programmed instruction was used in reference to a

particular format for presenting printed learning material to an individual

learner. The material to be learnt is prepared in such a way that is can be

presented to the learner in series of carefully planned sequential steps.

These steps progress from simple to more complex levels of instruction.

At each step, the student must make a response that tests his

comprehension. That is to say, he must write his answer to a question fill

in a missing word or phrase, or choose a correct statement from several

possibly correct statements or take some other appropriate action. This

method of imparting instruction has immense potential in extension

training. Programmed Instruction is particularly useful as an enrichment

activity. It can help provide highly motivated participants with additional

learning experience that the trainer might ordinarily be unable to provide

because of classroom time pressures. The programmed can be function as

a kind of tutor for slow learner in situations where more personalized

attention may be virtually impossible.

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CHAPTER NO.6

NEW ELECTRONIC TECHNOLOGIES IN TRAINING

INTRODUCTION

Electronic technology is a generic term covering an array of technologies

which are already in use or have tremendous potential for use in a wide

variety of educational use. Time has come to use appropriate electronic

technology for better implementation of training. Followings are some

recent electronic technologies which are in use for training in extension

COMPUTER

In the field of extension in India, a beginning has already been made in

the introduction of computers in monitoring and evaluation units of the

states. States of Karnataka and maharashtra have already taken a lead in

this direction. Use of computer in extension training is increasing day by

day.

VIDEO TAPE

Video tapes have already found quick use in extension in India. The

directorate of Extension makes a number of video tapes in the field of

new and emerging areas of technology dry land farming, women in

agriculture etc these can be shown t the trainees in training programme.

INTERACTIVE COMPUTER VIDEO TECHNOLOGY (ICVT)

The use of computers and video tapes in the filed of training is now well

established. Some leading institutions like manage Hyderabad are using

this technology in training programmes.

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BROADCAST TELEVISION

A television system in which programmes on training are sent out by

radio waves and are seen on television. Indira Gandhi National open

University (IGNOU) is very well using this technology in its educational

and training programmes.

CABLE TELEVISION

A television system in which programmes are sent along wires to

television sets alter they have been transmitter to a central receiver.

CAPACITANCE DISC

A video disc which uses electric charges for audio and visual signals. It is

read by a sensor which has to be in contact with it.

COMPUTER AIDED INSTRUCTION

An educational concept which places the student in a conversational

mode with a computer which has a programmed study plan. The

programmed course selects the next topic or phase of study according to

previous responses from the student allowing each student to progress at

a pace directly related to his or her learning capability.

INTERACTIVE SYSTEM

Any system which allows a continuous way communication between the

uses and the system.

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INTERACTIVE VIDEO OR INTERACTIVE COMPUTER

The phrase Interactive video reefers to a video programmes with which

the user (trainee) can interact. Interactivity takes place between the user

and the system. Same things for IC also. The system composed of four

basic components monitor or vides or display unit, Video tape or video

disc a computer, a disc drive. The computer controls the vide or tape or

video disc. Disc drive loads programmes into the computer.

LASER DISC

A video disc typically 30 cm in diameter with a silvery reflective surface.

The disc is read by a laser beam, hence its name. Due to a tough

protective coating on it, a laser disc is very durable.

TELE TEXT

A one way information service in which formation is displayed as pages

of text and other visual material. TVs are required to be special equipped

to receive such information.

TELE CONFERANCING

A Two way audio and one way video system. It is used now a days by

many institutions for education and training purpose.

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CHAPTER NO.7

STUDY AT STATE BANK OF INDIA

INTRODUCTION

The State Bank Academy (SBA), formerly known as State Bank Staff

College was set up at Gurgaon, on the 18th November, 1982 It is a centre

for training middle and senior management officials of the State Bank

group and other organizations in India and abroad. The programmes at

SBA Gurgaon have attained a steady - stream maturity over the years.

SBA has imparted training to over 19,000 managers during the past five

years Gurgaon visualizes an unfolding opportunity in the use of new,

technology enabled training methods as a supplemental training medium

To this end, it has designed and launched an institution-wide e-learning

programmes to be used by managers at various branches of the bank This

Endeavour is intended to deepen and lengthen the collective training

exposure of SBI managers.

• Training and awareness among employees: It is recommended that State

Bank of India should conduct various training programmes for the

employees, so that they will get aware with the terms of internet banking.

After such programmes they can create awareness amongst the

consumers

• Exchange of information on threats and vulnerabilities at appropriate

forms: There should be an open end discussion on the threats and

vulnerabilities coming across the functioning of internet banking work by

the employees in the various official forums and meets.

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• Build an optimal operating model by understanding which activities to

retain collaborate and outsource:-There should be clear sight of

operations which needs to outsource to other companies, this will lead to

ease in work for employees. Outsourcing operations like, cyber security

department, building IT structure on internet.

• Bank should Create and sustain customer, investor and regulator

confidence by adopting international accounting standards :Adopting

international standards adds some more star to the glory of any company,

SBI should impose such standards when it comes to internet banking or

virtual banking, this will enhance the goodwill of SBI among regulator,

customers and invertors.

• Bank should anticipate and get prepared for regulatory changes: Laws

regarding IT or cyber laws get change as per the need. SBI should

anticipate such kind of changes and get loaded with various plans and

actions.

State Bank of India to undertake massive revamp of its training system |

SBI launches strategic training network

Hyderabad: The largest public sector bank in the country State Bank of

India has under taken a massive revamp of its training system. With over

2,00,000 employees, the bank has a very elaborate training network

comprising 46 Learning Centers and 4 Apex Institutes developed over 50

years to cater to the competence building of its employees. The network

was hitherto looked after by the respective operational units. The revamp,

a vision of SBI Chairman Shri O P Bhatt seeks to create a world class

training system at par with the best anywhere in terms of content and

delivery.

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The revamped training structure, called a Strategic Training Unit (STU)

will bring the entire training system under a unified training command,

headed by a Chief General Manager. The STU has been assigned the task

of moving towards converting the State Bank of India into a “Learning

Organization” capable of handling change and growth for a Bank aspiring

to be amongst the top 20 in the world. SBI has added 25000 new

employees to its work force in the last two years and is likely to add

another 25000 in the current year. It has also taken on massive branch

expansion with over 1000 branches opened in the last fiscal alone. The

STU is geared not only towards integrating the new recruits into SBI but

also enhancing the knowledge and skills and reorienting attitude of its

existing work force. The training system will create a culture that

promotes continuous learning and development of the self, group,

organization and society. Standardization of training content is already

underway as is standardization of infrastructure across the system, so as

to ensure quality. SBI has also been putting its top leaders through

customized Leadership Programmes conducted by reputed management

institutes. The Bank, through the STU will expand its e-learning facilities

in a large way and also focus on operational research which will help the

Bank cope with change and direction setting in a competitive

environment. The STU, located at Hyderabad will be headed by Smt.

Mahapara Ali, Chief General Manager. Shri N Raja, the Corporate

Development Officer & Deputy Managing Director of the Bank who

inaugurated the Strategic Training Unit today said, “Our training system

is already considered the best in the industry. By creating the STU, we

propose to upgrade our infrastructure, content and delivery further.

Leadership development, competency building at all levels and change

management will be our focus areas”.

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CHAPTER 8:

ANNEXURE

1. Which is the course you wish to be trained for the employee?

Ans:

2. According to you, what would be the optimum duration of the training?

a. 4 – 6 weeks

b. 8 weeks

c. 6 months

d. 1 year

3. What type of training do you need?

a. Certificate course

b. Diploma course

4. Why do you need to undergo training?

a. To get promotions in the same department

b. To laterally move in the office

c. To effectively learn new technologies and implement them

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5. Which one would you prefer?

a. Working part time and undergoing training at the same time

b. Getting trained at a full time basis

6. What is your choice regarding the venue of the training?

a. At close proximity to your place of work or office

b. Near your residential area

7. Are you open to traveling out of state for training?

a. Yes

b. No

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CHAPTER 9:

CONCLUTION

Training is a crucial and continuous requirement for human resource

development. It is needed for skilful extension of current technological

know how. With the dynamic change in the world situation it is necessary

to move away from the didactic methods of imparting training to new

innovative methods for meeting up the new challenges. At present time,

because of ineffective performance of lecture method, participatory

training methods such as case study, role playing exercises, application

project, simulation games etc are getting popularity and be9ign used in

training. Besides modern electronic technologies viz CAI, ICVT, Video

tapes, tele conferencing etc. are likely to make a deep impact on training

of extension personnel in India. The use of satellites and internet can

make the training more effective and easy by saving time money and of

course energy of participants, organization and nation. It is hoped that

extension fraternity would like to view these developments with keen

interest as it is a very promising area for effective extension training and

Human Resource Development.

Public sector banks may not offer fancy financial packages which

multinational and few other companies offer. But the compensation in

these banks with the recent wage revision and including perquisites is

quite good. And there is an element of job security too. The housing and

medical facilities are also considered attractive. The expansion mode in

which public sector banks in India are, is creating large number of

opportunities for young people to choose banking as their career.

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Summary

There are many models for training conflict management and the one

suggested here for managers learning to mediate disputes among their

staff, is one of them. Organizations have different views on what they

want to achieve in this area and it is important for conflict management

trainers to know what objectives they are there to meet. It is also

important for trainers and organizations to look beyond traditional models

to ones that not only help build and sustain skills. It is also important to

assist people increase their self-awareness about how they "do" conflict.

Individualized coaching (pre and post training) and specifically designed

programs, provide greater opportunities, to learn and sustain more than

process.

Although not a core competency at most organizations, the ability to

manage conflict is not a skill managers have naturally. The importance of

identifying effective training that teaches and sustains learning cannot be

overstated. Unfortunately, it is more common to react once conflict has

escalated (and the bottom line is effected), than engage in proactive

measurements. Providing preventative tools that are also premised on

seeing conflict as an opportunity to improve relationships, is a goal that

may better ameliorate the toxic impact of conflict on an organization, its

reputation, its staff and its clients.

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WEBBIBLIOGRAPHY

www.google.com

www.wikipedia.com

www.sbibank.com

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