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Presented by:-Rakesh Babu-122
Rishav Dugar-128Rishu Narsariya-130
Shinu Simon-147Shruti Treasa-150
Sneha Bhudwar-158
BANKING SECTOR OF INDIA
General Bank of India – 1st bank of India(1786)
Reserve Bank of India -was established on 1 April 1935 during the British Raj in accordance with the provisions of the Reserve Bank of India Act, 1934
Slow growth and periodic failure
In 1949, the Banking Regulation Act was enacted which empowered the Reserve Bank of India (RBI) "to regulate, control, and inspect the banks in India.”
PHASE I (1951-1965)
1955:-Nationalization of Imperial Bank of India and
formation of State Bank of India. 1960:-Nationalization of SBI and subsidiaries
1962:- Deposit Insurance corporation was established
with aim to provide insurance cover to depositors, thereby protecting deposits of common man.
1969:-‘Transitory period’- social banking
and nationalization(14 banks)
PHASE II (1965-1981)
The Government of India First 14 Nationalised banks:1. Bank of India2. Union Bank of India3. Bank of Baroda4. Bank of Maharashtra5. Punjab National Bank6. Indian Bank7. Indian Overseas Bank8. Central Bank of India9. Canara Bank10. Syndicate Bank11. United Commercial Bank12. Allahabad Bank13. United Bank of India14. Dena Bank
Creation of credit guarantee Corporation
Creation of regional Rural Banks(1975):-The Govt of India set up Regional Rural
Banks (RRBs) on October 2, 1975. The banks provide credit to the weaker sections of
the rural areas-small farmers, agricultural labourers, artisans and small entrepreneurs.
Initially, five RRBs were set up on October 2,1975.Capital share -50% by the central government,
15% by the state government and 35% by the scheduled bank.
Total authorized capital- 1 crore which has since been raised to 5 Crore.
1980 : Nationalisation of seven banks with deposits
over 200 crores.
1990 :- the nationalised banks grew at a pace of
around 4%, closer to the average growth rate of the Indian economy.
PHASE III(1981-1990)
1991 :-the Indian rupee was devalued.
The currency lost 18% relative to the us dollar.
Narsimahmam Committee advised restructuring the financial sector by a temporal reduced reserve ratio as well as the statutory liquidity ratio.
PHASE IV(1991-present)
Licensing a small number of private banks(New Generation tech-savvy banks) . eg :axis bank, Global Trust Bank.
This turning point should reinforce the market and was often called neo liberal.
all Foreign Direct Investment at that time was 10% (at present it has gone up to 74% with some restrictions).
POLICY OF LIBERALIZATION
System become more convenient and swift.
The country is flooded with foreign banks and their ATM stations. Efforts are being put to give a satisfactory service to customer. eg online banking.
Time is given more importance than money.
This move, along with the rapid growth in the economy of India , revitalized the banking sector in India
EFFECTS OF NEW POLICY
Phase I Slow growth rate
Phase II nationalization of 14 indian banks
Phase III the trend continues---7 more banks nationalized no such significant changes with a constant
growth rate
In A Nutshell !!
Phase IV New phase of Indian Banking System with
the advent of Indian Financial & Banking Sector Reforms after 1991.
Continued..
Focus only on corporate clientsLack of skill expertise in retail and structured
financeLack of distribution systemLimited use of technologyInefficient capital allocationCompetition in market
Challenges during the phases
FDI in banking sector can solve various problems of the overall banking sector. Such as
a) Innovative Financial Products.b) Technical Developments in the Foreign
Marketsc) Problem of Inefficient Management d) Non-performing Assets e) Financial Instability f) Poor Capitalization g) Changing Financial Market Conditions
FDI'S impact on Banking Sector
Technological Advancement
Improving Risk Management
Rural Banking
Developing a flexible model for rapid scale--up at optimal cost.
Ways ahead
Indian banking sector has 6th rank in all over the world rank.
SBI has 6500+ ATMs all over the country.ICICI bank has 3500+ ATMs all over the
country.RBI had printed 6,39,948 lakhs crore notes
till 6THNov 2008.SBI provides the facility and it is tie with
9200+ banks to use their ATM.Transaction done through ATMs is around
70,000 crore in a year
Benchmarks..
Thank you…!!