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8/8/2019 Final Banking.pptx11
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Profitability factors of Regional Rural
Banks, Cooperative Banks andCommercial Banks
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Originated in the last decades of the 18thcentury
First banks were The General Bank of Indiawhich started in 1786 and the Bank ofHindustan
Oldest bank in existence in India is the StateBank of India, which was originated as Bank ofCalcutta in June 1806
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In 1948,India's central banking authority wasestablished
In 1949, the Banking Regulation Act wasenacted
The Act provided no new bank can be openedwithout a license from the RBI
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Cautious and proper sequencing of variousmeasures
Mutually reinforcing measures
Complementarity between reforms in bankingsector and changes in fiscal
Developing financial infrastructure
Initiatives to nurture, develop and integratemoney, debt and forex markets
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Political interference
Credit risk
Too much regulation
Macro-economic trends Liquidity
Capital availability
Derivatives
Risk management quality
Credit spreads
Equities
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Short-term priorities
Financial infrastructure to support business
Encouraged to extend finance to specific
industrial sectors or individual companies Bank rescues have created moral hazard with
expectations that banks will always be bailedout by governments
Bankers states that politics could negativelyaffect the way banks give loans while non-bankers feel political and monetary help tobanks could lead to banks acting carelessly.
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Prior to 1990 Needs of planned economic development Large borrowings by the Government
Monetary Effects and Cash Reserve Ratio Cross subsidisation Inefficiencies in the financial system Underdeveloped financial markets serving as a
captive market for resource requirement by theState Very little product choice in all segments of the
financial market Low level of liquidity in the securities market
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Established in 1975 under the provisions of the Ordinancepromulgated on the 26th September 1975 and the RegionalRural Banks Act, 1976
An alternative channel to the 'cooperative credit structure
Focus on serving the rural areas, are an integral segment ofthe Indian banking system
RRBs are jointly owned by Government of India, theconcerned State Government and Sponsor Banks (27Scheduled Commercial Banks and one State CooperativeBank) in the proportion of 50%, 15% and 35%
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1. Andhra Pradesh Grameena Vikas Bank2. Andhra Pragathi Grameena Bank3. Chhattisgarh Gramin Bank
4. Surguja Kshetriya Gramin Bank5. Durg-Rajnandgaon Gramin Bank6. Dena Gujarat Gramin Bank7. Baroda Gujarat Gramin Bank
8. Saurashtra Gramin Bank
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RRBs are at different stages of computerization
Implementation of the CBS in RRBs has beentargeted for completion by September 2011
Rewa Siddhi Gramin Bank andKashiGomtiSamyutGramin Bank sponsored byUnion Bank of India have completed 100%networking of its branches under CBS.
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Recapitalization of RRBs
The Central Government has released its shareof contribution of Rs. 897.98 crore along withthe release of the share of contribution by theState Government concerned and the sponsorbanks
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NABARD is the e financing agencyres onsi le for implementing the
governments policies on planning andcredit dispensation to agric lt ral and r ralsectors.
NABARDs strong capitalisation is markedby a high Tier I (core) capital ade acy ratio( . as on December , ) and low
asset-related risks.
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NABARD has a modest earnings profile,driven largely by lending at mandated rates
and increased reliance on borrowings atmarket rates.
NABARDs core profitability, meas red by
its net profitability margin (NPM
), was .per cent during 2008-09, compared with 0.percent during 2007-08
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NABARD will continue to receive strongfunding and operational support from the
government. The institution will maintain itshealthy capitalisation and competitive resourcecosts. The asset protection mechanism availableto NABARD is likely to continue. The outlookcould be revised to Negative if there is areduction in governments commitment to theagricultural and rural sectors, translating intothe likelihood of decline in support toNABARD.
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Financial intermediary
Known as Business Banking
A bank or a division of a bank primarilydealing with deposits and loans from
corporations or large businesses
Strict separation of investment and commercialbanking never applied.
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Corporate Bankinga. Micro Small and Medium Enterprises
(MSME)b. IT & ITes BPOc. Cash management services
Rural
a. IOB's commitment for social causesb. Ag ricultural short time loansc. Financial inclusiond. Ag ri business consultancy
NRI Accountsa. Non-Resident Ordinary (NRO)
b. Resident Foreign Currency Account (RFC)c. Foreign Currency Non-Resident Accounts(Banks)
d. NRI home loan schemee. NRI remittancesf. Tracking cellg. Forward cover
h. NRI shieldi. Expo Gold Card
Personal Banking
a. Saving bankb. Current accountc. Term depositd. Retail loanse. Home loans and mortgagesf. Depository servicesg. International VISA Cards
h. Any Branch Bankingi. Multi city cheque facilityj. Insurance and mutual fund
Forexa. SWIFT centersb. Forex collection services
Government Businessa. E-Payment of direct and indirect taxesb. Pension payment schemec. Sales tax collectionsd. Provident Fund Scheme 1968e. 8 percent savings taxable bond schemef. Senior citizen scheme 2004
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Increase in resource productivity, increasinglevel of deposits, credits and profitability
and decrease in non-performing assets,productivity, financial and operationalefficiency, has come under pressure becauseof changing environment of bank. An
efficient management of banking operationsaimed at ensuring growth in profits andefficiency all those factors on which thebank's profit depends.
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Government-owned bank and is one of theoldest
Bank currently has 3,563 branches and 270extension counters across 27 Indian states
One of 18 Public Sector banks in India to getrecapitalisation
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Centre has infuse Rs 1,400 crore
Will convert an amount of Rs. 800 crore out of its Rs.1,124.14-crore total equity capital into perpetualnon-cumulative preference shares
Q3 standalone net profit went up at Rs 353.26 crorefrom Rs 201.01 crore (YoY).
The bank's reserves and surplus stood at Rs. 1,810.19crore, the bank had a staff strength of 37,241 as on
Nov 2006.
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Retail and Commercial banking organized on a co-operative basis
Co-operative banking institutions take deposits and lendmoney
Co-operative banks are often created by personsbelonging to the same local or professional communityor sharing a common interest
Differ from stockholder banks by their organization,their goals, their values and their governance
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Farming
Cattle
Milk
Hatchery
Personal finance
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Self-employment
Industries
Small scale units
Home finance
Consumer finance
Personal finance
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KalupurCommercial CooperativeBank Ltd.
Kalupur
Madhavpura Mercantile Co-Op BankLtd.
Madhavpur
Mehsana Urban Co-Op Bank Ltd. Mehsana
Nutan Nagarik Sahakari Bank Ltd. Ahmedabad
Rajkot . Rajkot
almora bank ltd. almora
Sardar Bhiladwala Pardi Peoples Coop
Bank Ltd.
Bulsar
Surat Peoples Coop Bank Ltd. Surat
Amanath Co-operative Bank Ltd. Bangalore
Andhra Pradesh Mahesh Co-Op UrbanBank Ltd.
Andhra Pradesh
Charminar Coop.Urban Bank Ltd. Hyderabad
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Co-operative banks are deeply rooted inside localareas and communities.
They are involved in local development andcontribute to the sustainable development of theircommunities
By increasing banking access in areas or markets
where other banks are less present
They play an influential role on the economicgrowth in the countries in which they work
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Noprofit no loss.
Onlybasic banking services.
inance small borrowers in industryand
trade sectors. More forward than state andprivte sector
banks.
According to
NAFCUendingmore thanoldprivate sectors andnewpublic sectors.
rowthdue tobetter local reach .
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Larger part for constitute reserves.
A remaining or the smaller part to Co-operative members with legal limitation .
Allocated through dividends.
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Urban co-operative bank(maharashtra).
Established in 1918.
Initially set up to help families in distress. Converted into urban co-operative in the year
1933.
Business rose from 40 billion Rs in 2000 to 230billion RS in 2010.
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NRI ServicesDeposit AccountsPersonal LoansOverseas (Nostro) Account
Forex Centers Remittance Services Trade Finance
Product forprofessionals/small businessesDoctors Delite Swift ProfessionalCredit (For Professionals, Businessman/Small BusinessEnterprises,Retail Traders)Deposit SchemesPersonal LoansMiscellaneous ServicesInvestment & InsuranceDemat Services
BANCS stands for Banks ATM Network and Customer
Services
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Jatin Goyal
Mayank GargBharat GargNirmal KhanchandaniTapan ShahManish Jivani
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