Indian Banking Sector

Indian Banking Sector History, Types,& Challenging factors. Presented By RAHUL GARG PGD08043

Definition of Bank Banking is "accepting, for the purpose of lending or investment of deposits of money from the public, repayable on demand or otherwise and withdrawable by cheques, draft, order or otherwise." Bank is defined as a person who carries on the business of banking. Banks also perform certain activities which are ancillary to this business of accepting deposits and lending. Since Banking involves dealing directly with money, governments in most countries regulate this sector rather stringently.

Banking Overview • The major participants of  the Indian financial system are the commercial banks, the financial institutions (FIs), term-lending institutions, investment institutions, specialized financial institutions and the state-level development banks, Non-Bank Financial Companies (NBFCs) and other market intermediaries such as the stock brokers and money-lenders. The commercial banks and certain variants of NBFCs are among the oldest of the market participants. The FIs, on the other hand, are relatively new entities in the financial market place.

Historical perspective  • Bank of Hindustan, set up in 1870, was the earliest Indian Bank . • Establishment of three presidency banks under Presidency Bank's act 1876 i.e. Bank of Calcutta, Bank of Bombay and Bank of Madras • In 1921, all presidency banks were amalgamated to form the Imperial Bank of India. Imperial bank carried out limited central banking functions also prior to establishment of RBI

Contd. • Resrve Bank of India Act was passed in 1934 & Reserve Bank of India (RBI) was constituted as an apex bank without major government ownership. Banking Regulations Act was passed in 1949. This regulation brought Reserve Bank of India under government control. Under the act, RBI got wide ranging powers for supervision & control of banks.

Types of Bank • Banking Segment in India functions under the umbrella of Reserve Bank of India the regulatory, central bank. This segment broadly consists of:  • 1. Commercial Banks  2. Co-operative Banks

Commercial Bank

Co-operative Bank

Types of Banking

Current Position of banking sector

Challenging Factor

Bibliography • WWW.BANKNETINDIA.COM • WWW.IBA.ORG.IN • WWW.INDIA.GOV.IN • BUSINESS TODAY

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