Banking Sector By Iimp C1(08-10)

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PRESENTATION ON

Banking Sector 2

IIMP

INTRODUCTION What is Bank A bank is a financial institute whose primary activity is to act as a payment agent for customers to borrow and lend.

What is Banking Indian Definition of Banking

By banking regulation act 1949. "Banking" means the accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise, and withdraw able by cheque, drafts, order or otherwise”. 08/16/09

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History of Banking The banking system was prevailing at the

time of Babilon culture, from since 1171 year  The word ‘BANK’ has evolved from word ‘BANCO’  It is seen that since 1646 the word ‘Bank’ has been used in the articles. Indian History: Banking in India is said to be developed during the British era. In the first half of the 19th century. Bank of Bengal in 1809 , Rs 50 lakhs as capital  The Bank of Bombay in 1840, Shares capital Rs 5225000. 08/16/09 IIMP

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But in the course of time these three banks

were amalgamated to a new bank called Imperial Bank of India on 27th Jan 1921 and later it was taken over by the State Bank of India in 1955.  Allahabad Bank was the first fully Indian owned bank. The Reserve Bank of India was established in 1935 followed by other banks like Punjab National Bank, Bank of India, Canada Bank and Indian Bank. In 1969, 14 major banks were nationalized and in 1980, 6 major private sector banks were taken over by the government. 08/16/09

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Types of Banks  Central Bank The Reserve Bank of India is the central Bank that is fully owned by the Government.  Public Sector Banks State Bank of India and its associate banks called the State Bank Group, 20 nationalized banks, Regional rural banks mainly sponsored by public sector banks.  Private Sector Banks

Co-operative Sector

The co-operative sector is very much useful for rural people. The co-operative banking sector is divided into the following categories.  State co-operative Banks  Central co-operative banks  Primary Agriculture Credit Societies 08/16/09

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Development Banks/Financial

Institutions IFCI IDBI ICICI IIBI SCICI Ltd. NABARD Export-Import Bank of India National Housing Bank Small Industries Development Bank of India North Eastern Development Finance

Corporation 08/16/09

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RBI  The Reserve Bank of India was established on

April 1, 1935 in accordance with the provisions of the Reserve Bank of India Act, 1934.  The Central Office of the Reserve Bank was initially established in Calcutta but was permanently moved to Mumbai in 1937. The Reserve Bank is fully owned by the Government of India. Preamble: The Preamble of the Reserve Bank of India describes the basic functions of the Reserve Bank as: "...to regulate the issue of Bank Notes and keeping of reserves with a view to securing monetary stability in India and generally to operate the currency and credit system of the country to its advantage." 08/16/09

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Banking related terms Inflation CRR rate REPO rate

Current Rates: Bank Rate: 6%

Bank rate Call rate

Repo Rate: 9% Reverse Repo rate: 6% CRR: 8.75%

Slr rate Plr rate

SLR: 25% PLR: 12.75%-13.25% Saving Bank Rate: 3.5% Deposit Rate: 7.5%-

9.6% Call rate: 7%-9.% 08/16/09

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E-Banking

CORE BANKING:

Core banking is all about knowing customers' needs. Provide them with the right products at the right time through the right channels 24 hours a day, 7 days a week. Core Banking is normally defined as the business conducted by a banking institution with its retail and small business customers MICRO FINANCE Micro credit, or microfinance, is banking the unbendable, bringing credit, savings and other essential financial services within the reach of millions of people who are too poor to be served by regular banks, in most cases because they are unable to offer sufficient 08/16/09 IIMP collateral.

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DUTIES OF THE BANK

FUNDAMENTAL DUTIES FUNDAMENTAL POWERS ADVISORY DUTIES

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Banking Services Deposits

Money transfer

Loans

Services

NRI services

EBanking Lockers (Limited to some banks)

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Indian banking sector Analysis The nationalized banks have more branches

than any other types of banks in India. Total number of branches 33,627 in India, as on March 2005. Investments of scheduled commercial banks (SCBs) also saw an increase from Rs 8, 04, 199 crore in March 2005 to Rs 8, 43,081 crore in the same month of 2006. India's retail-banking assets are expected to grow at the rate of 18% a year over the next four years (2006-2010). -Retail loan to drive the growth of retail banking in future. 08/16/09 IIMP

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JOB OPPORTUNITIES IN BANKING SECTOR CLERICAL MANAGERIAL Duties of workers in specialized areas are : Personnel - recruiting and training staff, planning career development of trainees, advising students about careers in banking; Marketing - designing campaigns to promote new and existing services, researching customers' banking habits to find new opportunities for the bank; Operations - processing transactions and loans, researching new technology or different working methods to increase the bank's efficiency; Electronic Services- writing a new section on the bank's website, developing interactive digital TV banking services; Card Services- authorizing and issuing cards, managing transactions; 08/16/09 IIMP

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IDBI BANK 

Vision: “To the trusted partner in progress by leveraging quality human capital and setting global standards of excellence to build the most valued financial conglomerate”. our Mission To continually strive to enhance customer experience through innovative product offerings, dedicated relationship management and superior service delivery while striving to interact with our customers in the most convenient and cost effective manner. To be transparent in the way we deal with our customers and to act with integrity. To invest in and build quality human capital in order to achieve our mission.

History (down memory lane…evolution and changing role )  1964-On July 1st, IDBI was established by an act of

parliament  1976-100% ownership was transferred from RBI to the government of India  2005-On April 2nd, IBDI merged its hitherto banking subsidiary (IDBI bank ltd) with itself. However, the” appointed date” of merger as fixed as October 1, 2004. Post the October 2004 merger of erstwhile IDBI bank

with its present company (IDBI LTD) IDBI is now a universal bank.  2006- IDBI announce it foray into life insurance business

jointly with federal bank and forties insurance international N.V(fortis).

SWOT ANALYSIS STRENGTHS  It has a diversified customer profile  IDBI’S strong market position as one of India’s leading financial institution, with consistent profitability and sound capitalization.  competent human capital to power its aggressive growth plans .  It has exerted a deterministic influenced on the development of modern India by moving beyond the realm of mere financial intermediation

WEAKNESS  Average quarterly balance

Rs.2500/ Poor level awareness about the bank among masses  Not proved search option for online services.

Swot Analysis Cont… OPPORTUNITIES:

THREATS:

A major chunk of semi

Threats from existing

urban and rural India is uncovered

players. Threats from foreign

India’s saving rate i.e.

33% of GDP is one of the highest

banks and private Indian banks

SUBSIDIARIES: IDBI CAPITAL IDBI HOMES IDBI INTECH IDBI GILTS

IDBI STARATEGIES Short To Medium-Term Strategy  Optimize mix of corporate and     

  

retail banking. Leverage core competency in project financing. Emphasize landing to agriculture, micro finance and SMEs. Focus on fee based income to boost profitability. Increase the relative share of low cost deposits (CASA) in total deposit. Foray into associated business domains like life insurance, mutual funds, asset management and private equity areas. Leverage technology and planning for enhancing group’s synergy. Enhance and implement enterprise-wide risk management systems. Reorient human resources through

Long-Term Strategy  Pursue organic growth

opportunities.  Target a stronger domestic network apart from a respectable presence abroad.  Explore inorganic growth through commercially gainful bank acquisitions and mergers.  Position the bank as the “Bank of Choice”.

CSR (Corporate Social Responsibilities)  Details of the projects and    

implementing partners are as follow: Prerna Child Survival India (CSI) New Opportunity for Women (NOW) Nav Shrishti

8P’S OF MARKETING

Place       

The detailed study of IDBI is shown below: No of branches: 501 Metro 173 Urban 176 Semi urban 99 Rural 53 No of ATM’s: 851

Product & services Promotion Price People Physical evidence Public relation profit

HR CHALLENGES IN IDBI MUMBAI: The proposed merger of IDBI and

IDBI Bank could throw up challenges at several stages. The pooling and merging of the human resourses of the two entities could be one of the biggest challenges, said an official at a private sector bank. "Retaining the cream of IDBI Bank personnel under the new fold will be a big HR challenge," the official said. "The work cultures of the two entities are totally different and could result in a clash." "It remains to be seen if the IDBI personnel can take a 180-degree turn in their business approach," a banking analyst with a local

COMPARATIVE STUDY OF BANKS

 REFERENCES:  www.Google.com(search engine)  www.RBI.org.in  www.ecofin.co.in  www.idbi.com

 BOOKS:

Marketing management by: Philip kotler

Logo Meaning  Our logo captures the essence of what our banks stands for.

The teal green backdrop in the logo coveys the immense prosperity our institution has help bring to modern India, while the straight standing erect typeface reflects the steadfastness and solidity of our organization. The orange flower is a symbol of dynamism and individual well-being. The blob atop the power conveys that each and every stake holder is the focal point of our strategy pursuits while the circle of space around the orange flower suggests that no matter how big it grows, there will always be scope for it to further expands its reach(inclusive banking) and bouquet of products and services(universal banking). Overall, the new logo reflects the assuring face of a bank that is committed to help ‘every big-thinking Indian think even bigger’, which

SUGGESTIONS  More branches across different states of India

especially in rural areas are required to be opened to meet the requirement of rural India.  ATM has become very attractive for customer, but IDBI has very small ATM network so need to set up more ATM networks  IDBI need to adopt aggressive marketing strategies which include promotion as product in electronic media, print media and through other forms of advertisements.  Door step banking should also be given a chance.