EVOLUTION OF BANKING IN INDIA.pptx

7/27/2019 EVOLUTION OF BANKING IN INDIA.pptx

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EVOLUTION OF

BANKINGSECTOR IN

INDIA

Y. M Aditya Teja -1303023

B. Sai Krishna - 1303039


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BANK

A bank is a financial institution whose primary activity

is to act as a payment agent for customers and to borrow

and lend money.

An institution where one can place and borrow money

and take care of financial affairs;

The first modern bank was founded in Italy in Genoa in1406, its name was (Bank of St. George).


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History

The oldest bank in existence in India is the StateBank of India, which originated in the Bank of

Calcutta in June 1806, which almost immediatelybecame the Bank of Bengal. This was one of thethree presidency banks, the other two being theBank of Bombay and the Bank of Madras.

The three banks merged in 1921 to form the

Imperial Bank of India, which, upon India'sindependence, became the State Bank of India in1955.


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The Central Government entered the banking business with the

nationalization of the Imperial Bank Of India in 1955 The seven

other state banks became the subsidiaries of the new bank whennationalised on 19 July 1960. The next major nationalisation of

banks took place in 1969 when the government of India,

nationalised an additional 14 major banks. The next round of

nationalisation took place in April 1980. The government

nationalised six banks.

The objectives behind nationalisation where:

To break the ownership and control of banks by a few business

families,

To prevent the concentration of wealth and economic power,To mobilize savings from masses from all parts of the country,

To cater to the needs of the priority sectors.....


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In the past 20 years, the RBI has licensed 12 banks inthe private sector in two phases. Ten banks were

licensed on the basis of guidelines issued in January

1993.

The guidelines were revised in January 2001 based on

the experience gained from the functioning of these

banks and fresh applications were invited. Kotak

Mahindra Bank and Yes Bank were the last two entities

to get banking licenses from the RBI in 2003-04.

Now RBI may issue licences for 7-8 new banks in the

Indian banking sector.


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Market Share


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PHASES OF BANKING

Phase-1

Early phase from 1786 to 1969 of Indian Banks

Phase-2

Nationalization of Indian Banks and up to 1991

Phase-3

New phase of Indian Banking System with the advent ofIndian Financial & Banking Sector


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F IRST GENERATION OF BANKI NG

GENERAL BANK OF INDIA 1786(FIRST BANK)

Slow growth and periodic failure

RESERVE BANK OF INDIA 1935

THE BANKING COMPANY ACT 1949

People mostly save in postal deposits.


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SECOND GENERATION OF BANKING

Nationalization of imperial bank of India and

formation of state bank of India(1955)

Nationalization of SBI and Subsidiaries(1960)

Insurance cover extended to deposits

Creation of credit guarantee corporation

Creation of regional rural banks


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THIRD GENERATION OF BANKING

Entry of Foreign Banks

Phone Banking and Net-Banking

System become more convenient and swift


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TYPES OF BANKS

Commercial Banks

Co-operative Banks

Regional Rural Banks


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Public sector banks

Public Sector Banks (PSBs) are banks where amajority stake (i.e. more than 50%) is held by a

government. The shares of these banks are listed on

stock exchanges. There are a total of 26 PSBs in

India..

Some Public Sector Banks in I ndia:

Central Bank of India

Corporation Bank

Dena BankBank of India


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Commercial Banks Commercial Banks can be divided into Public Sector

Banks and Private Sector Banks.

In India there are 26 Public sector banks.

In Private Sector Banks we have Foreign Banks and

Indian Banks.


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Private sector banks

All those banks where greater parts of stake or equity areheld by the private shareholders and not by governmentare called "private-sector banks".

These are the major players in the banking sector as well

as in expansion of the business activities India. There are two categories of the private-sector banks:

"old" and "new".

The old private-sector banks have been operating since

a long time and may be referred to those banks, which

are in operation from before 1991 and all those banks

that have commenced their business after 1991 are

called as new private-sector banks.


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Private sector banks

These banks are mainly used for developing industries andcountries

Some Examples-

Federal BankHDFC BankHSBCICICIBank Indian Overseas Bank

ING Vysya Bank


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Private Foreign BanksForeign Banks of India come under the the Bankingcompany's act.

Abu Dhabi Commercial Bank

Australia and New Zealand Bank Bank Internasional Indonesia

Bank of America NA

Bank of Bahrain and Kuwait

Bank of Ceylon Bank of Nova Scotia


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Co-operative banks

They are setup to provide easy loans to farmers or otherpersons to set up his business.

They are non profitable banks.

Cooperative banks and RRBS inIndia finance rural areas

under:Farming, Milk, Personal finance

Example of co-operative banks are

1. Andhra Pradesh co-operative bank


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RRBs

Regional Rural Banks are the banking organizations

being operated in different states of India. They have

been created to serve the rural areas with banking

and financial services. However, RRB's may have

branches set up for urban operations and there area ofoperation may include urban areas too.

Examples of RRBS are

1. Chaitanya Godavari grameena bank

2. Deccan grameena bank


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DEVELOPMENT BANKS AND

F INANCIAL INSTITUTIONS

Development banks in India :

IDBI BANK(INDUSTRIAL DEVELOPMENT BANK

OF INDIA)

IFCI (INDUSTRIAL FINANCE COOPERATION

OF INDIA)


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Documents

EVOLUTION OF BANKING IN INDIA.pptx