Final Banking.pptx11

8/8/2019 Final Banking.pptx11

1/30

Profitability factors of Regional Rural

Banks, Cooperative Banks andCommercial Banks


2/30

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


3/30

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


4/30

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


5/30

Political interference

Credit risk

Too much regulation

Macro-economic trends Liquidity

Capital availability

Derivatives

Risk management quality

Credit spreads

Equities


6/30

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.


7/30

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


8/30

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%


9/30

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


10/30

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.


11/30

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


12/30


13/30

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.


14/30

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


15/30

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.


16/30

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.


17/30

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


18/30

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.


19/30

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


20/30

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.


21/30

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


22/30

Farming

Cattle

Milk

Hatchery

Personal finance


23/30

Self-employment

Industries

Small scale units

Home finance

Consumer finance

Personal finance


24/30

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


25/30

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


26/30

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 .


27/30

Larger part for constitute reserves.

A remaining or the smaller part to Co-operative members with legal limitation .

Allocated through dividends.


28/30

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.


29/30

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


30/30

Jatin Goyal

Mayank GargBharat GargNirmal KhanchandaniTapan ShahManish Jivani

Documents

Final Banking.pptx11