Comml Banking, Role, Org Stru

8/6/2019 Comml Banking, Role, Org Stru

1/18


2/18

Origin of commercial banks

Organization Structure commercial banks

Role of commercial banksFunctions of commercial banks


3/18

Banking operations started in India as early as 1870 with the

establishment of the Bank of Hindustan, considered as the first bank in

India.

The second development in the banking sector happened with theincorporation of the Bank of Calcutta, the Bank ofBombay and the

Bank ofBombay in accordance with the Presidency Bank's Act, 1876.

All these banks joined hands to form the Imperial Bank of India. The

reserve Bank of India was engaged in the performance of central

banking activities before the establishment of the Reserve Bank ofIndia.


4/18

Privately & Publicly owned financial institution which

(1) accepts demand and time deposits,

(2) makes loans to individuals and organizations, and

(3) provides services such as documentary collections,international banking, trade financing.

It raises funds by collecting deposits from businesses and consumers

via checkable deposits, savings deposits, and time (or term) deposits.

It makes loans to businesses and consumers.It also buys corporate bonds and government bonds.

Its primary liabilities are deposits and primary assets are loans and

bonds.


5/18


6/18

Commercial banks

Structured

ScheduledCommercial Banks

Unscheduled

Commercial Banks


7/18

Scheduled Banks in India constitute those banks which

have been included in the Second Schedule of Reserve Bank

of India(RBI) Act, 1934.

RBI in turn includes only those banks in this schedule which

satisfy the criteria laid down vide section 42 (6) (a) of the

Act.As on 30th June, 1999, there were 300 scheduled banks in

India having a total network of 64,918 branches.

Publice sector banks

State Bank of India

State Bank of Bikaner and Jaipur

State Bank of Hyderabad

Andhra Bank

Private sector banks

ING Vysya Bank Ltd

ICICI Bank Ltd

South Indian Bank

HDFC Bank Ltd


8/18

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

defined in clause (c) of section 5 of theB

anking RegulationAct, 1949 (10 of 1949), which is not a scheduled bank".

Bharat Overseas Bank Ltd.

City Union Bank Ltd.

Development Credit Bank Ltd.

Ing Vysya Bank Ltd.The Karnataka Bank Ltd.

Lord Krishna Bank Ltd.

The Bank of Rajasthan Ltd.

The Catholic Syrian Bank Ltd.

The Dhanalakshmi Bank Ltd.

The Federal Bank Ltd.The Ganesh Bank of Kurundwad Ltd.

The Jammu & Kashmir Bank Ltd.


9/18

Board of Directors

Chief Administrative Officer (Board

Chairman/President/CEO/Managing Director

Accounting &Operations Division

Accounting & Audit

Department

Operations(check clearing, posting,Account verification, &

Customer complaint)

Fund-Raising &Marketing Division

Tellers orCustomer Service officers

New Accounts

Advertising &Planning

Lending DivisionOr Loans Department

Commercial

Loan Officers

Consumer Loan

Officers

TrustDivision

Personal

Trusts

Business

Trusts


10/18

The functions of a commercial banks are divided into two

categories:

1. Primary functions, and

2. Secondary functions including agency functions.

Primary functions:

The primary functions of a commercial bank include:

a) accepting deposits; and

b) granting loans and advances;


11/18

Secondary functions including agency functions

Issuing letters of credit, travellers cheques, circular notes etc.

Undertaking safe custody of valuables, important documents, and

securities by providing safe deposit vaults or lockers;

Providing customers with facilities of foreign exchange.

Transferring money from one place to another; and from one

branch to another branch of the bank.

Standing guarantee on behalf of its customers, for making

payments for purchase of goods, machinery, vehicles etc.

Collecting and supplying business information;

Issuing demand drafts and pay orders; and,

Providing reports on the credit worthiness of customers.


12/18

Primary functions

These are the main activities of

the bank.

These are the main sources ofincome of the bank.

These are obligatory on the

part of bank to perform.

Secondary functions

These are the secondary

activities of the bank.

These are not the main sourcesof income of the bank.

These are not obligatory on the

part of bank to perform. But

generally all commercial banksperform these activities.


13/18

Banks receive money from the public by way of deposits.

The following types of deposits are usually received by

banks:

i) Current deposit

ii) Saving deposit

iii) Fixed deposit

iv) Recurring depositv) Miscellaneous deposits


14/18

Commercial bank generally lend money in the following

form:

i) Cash credit

ii) Loansa) Demand loan, or

b) Term loan

iii) Bank overdraft, and

iv) Discounting ofBills


15/18


16/18

Education loans

Housing loans

Car loans


17/18

Mobilizing Saving for Capital Formation

Financing Industry

Financing Trade

Financing Agriculture

Financing Consumer Activities

Financing Employment Generating Activities.

Help in monetary Policy


18/18

Documents

Comml Banking, Role, Org Stru