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8/3/2019 Indian Banking System(1)
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AND
ROLE OF RBI IN INDIA
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y The banking system constitutes the core of the financial sector and
plays a critical role in transmitting monitory policy impulses to the
economy.
y Banking is more than 225 years old in our country. the first bank
called the bank of hindustan was established in 1770. there are 295
banks with 66,514 branches spread across the country.
y The banking system in our country comprises three constituents
-Public Sector
-Private Sector
-Foreign Sector
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y Presently, the commercial banking consists of 174 banks and
71,781 bank offices. Out of these as many as 116 banks and
64,696 bank offices are in the public sector.
y There are 20 indian banks in the brand finance global banking
500, an annual international ranking by UK based brand
finance PLC, this year.
y The SBI became the first indian bank to enter the worlds top
50 list.
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NATIONALISATION OF BANKS
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y
Before the steps of nationalisation of Indian banks, only StateBank of India (SBI) was nationalised. It took place in July
1955 under the SBIAct of 1955. Nationalisation of Seven State
Banks of India (formed subsidiary) took place on 19th July,
1960.
y The State Bank of India is India's largest commercial bank and
is ranked one of the top five banks worldwide. It serves 90million customers through a network of 9,000 branches and it
offers -- either directly or through subsidiaries -- a wide range
of banking services.
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y The second phase of nationalisation of Indian banks took place
in the year 1980. Seven more banks were nationalised with
deposits over 200 crores. Till this year, approximately 80% of
the banking segment in India were under Government
ownership.
y After the nationalisation of banks in India, the branches of the
public sector banks rose to approximately 800% in deposits
and advances took a huge jump by 11,000%.
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y 1955 : Nationalisation of State Bank of India.
y 1959 : Nationalisation of SBI subsidiaries.
y 1969 : Nationalisation of 14 major banks.
y 1980 : Nationalisation of seven banks with deposits over 200
crores.
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PUBLIC SECTORy Public sector banks have been criticised as being slothful,
corrupt and inefficient. But it is same public sector banks
which saved the indian economy recently. They have
penetrated deeply into the country through massive branch
expansion.
y Banks in public sector faced problems from all sides. Negative
attitude of public, unenthusiastic response from the government
disobedient behavior from employees and their unions and
hype from foreign banks.
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y W
ith the presence of banks in remote areas, government bankhave mobilised deposits which added to the lendable funds in
the hands of the government. Lendable funds helped maintain
liqudity in the financial sector.
y The government bank have stood the test of time and have
become much stranger as revealed by their share in total
deposits and advances.
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PRIVA
TE SECTORy There are 28 banks in the private sector and together account
for 20.4 per cent deposits, and 20.3 per cent of the advances.
y Narasimham committees recommendations proved to be a big
boon for private banks. The committee recommended that there
should be no more nationalisation of private banks and there
should be no disparity in the treatment given to public or
private banks.
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y There are criticisms against banks in private sector. They have
mostly confined their activities to big cities, almost ignoring
small towns and rural areas. This is borne out by fact only four
per cent of their total deposits have come from rural areas and
lent only two per cent of their money to village side.
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FOREIGN BANKS
y Foreign banks which are registered outside india, but having
branches in india. There are 30 such banks with 279 branches.
In additional, 41 foreign banks operate through representative
offices. Foreign banks are mostly in the private sector of their
respective countries.
y Entry of foreign banks has been welcome in as much as they
brought, along with them new technology, professional
management practice, new banking products and funds.All
these benefited the indian economy.
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HALL OF FAME
y There are 20 Indian banks in the brand finance global banking
500, an annual international ranking by UK based brandfinance PLC.
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Rank
2009
Rank
2010
Indian banks Brand value
2009(million
$)
Brand
value 2010
70 36 SBI 1448 4531
110 70 ICICI Bank 939 2164
153 141 HDFC Bank 611 951
192 174 PNB 384 713
228 195 Bank Of India 273 602
260 196 Bank Of Baroda 229 601
251 213 Canara Bank 243 525
269 239 Axis Bank 205 428
351 274 UBI 137 340
280 287 Kotak 188 321
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2009 2010 Indian Bank 2009 2010
418 305 IDBI bank limited 103 299
371 334 Indian Overseas Bank 127 236
- 345 Allahabad Bank - 224
454 355 Indian Bank 92 215
- 393 Corporation Bank - 180
- 408 Rural Electrification Corp - 165
467 447 Oriental Bank Of
Commerce
86 139
486 453 Syndicate Bank 81 138
- 461 Andhra Bank - 134
- 471 Central Bank Of India - 127