Banking Setor Reforms

8/8/2019 Banking Setor Reforms

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REFORMS IN BANKING

SECTOR

GROUP MEMBERS

DEEPAK

CHANDAN

SIDDHANTALI ASGAR

PRADAMAN


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What is banking?

Bank is an institution which trades in money,

an establishment for the deposits,custody

and issue of money,as also for making loans

and discounts and facilitating the

transmission of remittances from one place to

another.


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Types of bank in India

Commercial Banks

Industrial Banks

Agricultural BanksExchange Banks

Central Banks

Indigenous Bankers


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Main reforms in banking sectorGovernment equity in banks has been

reduced and strong banks have been allowed

to access the capital market raising additional

capital.

Bank now enjoying the operational freedom

in terms of opening of new branches and

bank having good track record of profitabilitygiven flexibility in recruitment.


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Main reforms in banking sector

New private sector banks have been set upand foreign banks are allowed to expend theirfunction in India including through

subsideries.Banks are also allowed to set up off shore

banking units in SEZ.

new instrument have been introduced forbetter flexibility and better risk managementlike interest rate exchange, cross currencyforward contract.


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Several new institution have been set up-:National securities depositor limitedCentral depositors service limitedCredit information bureau India limited

Limits for overseas investment have been

liberalized. The overseas investment for corporate have

been raised to hundred percent


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Universal banking has been introduced.

Adoption of global standard-:

Prudential norms for capital adequacy,Assets classification , income recognization,

best accounting system, settlement system

are adopted


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Competition enhancing

measures

Freedom in operation

Disinvestment of public ownership in publicsector bank

Transparent norms for private and foreign bank

Permission for FDI and portfolio investment inbanking


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Measures enhancing the role

of market forces

Interest rate on domestic term has been

deregulated

Reduced pre-emption.Enhanced transparency and disclosure.


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Instutional and legal measure

Strengthening of credit information andcreditors right.

Passed the recovery of debt act in 1993 to

facilitate and speed up .Six special tribunals have been set up And

appellate Tribunal has also been set up in

mumbai. Improved framework for payment andsettlement.


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Techenological Related measures

Dedicated communication as bakbone for

banks.

Introduction of product throughcommunication network.

Electronic funds transfer .

Centralised banking or core banking .

Structured financial messaging solution.


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Measure in Interest rates slab

Prime landing rate of SBI and other banks ofover Rs 2 lakhs has been reduced .

Rate of interest on bank loans above Rs 2

lakhs has been fully decontrolled . The interest rates on deposits and on

advance of all co-operative bank have been

deregulated. Interest rate on domestic term deposits hasbeen decontrolled .


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Supervisory measures

Setting up an autonomous body for supervision

provision

Introduction of off-site surveillanceMonitoring systematically, important financial

institutions


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Thank you

Documents

Banking Setor Reforms