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Origin of commercial banks
Organization Structure commercial banks
Role of commercial banksFunctions of commercial banks
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Banking operations started in India as early as 1870 with the
establishment of the Bank of Hindustan, considered as the first bank in
India.
The second development in the banking sector happened with theincorporation of the Bank of Calcutta, the Bank ofBombay and the
Bank ofBombay in accordance with the Presidency Bank's Act, 1876.
All these banks joined hands to form the Imperial Bank of India. The
reserve Bank of India was engaged in the performance of central
banking activities before the establishment of the Reserve Bank ofIndia.
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Privately & Publicly owned financial institution which
(1) accepts demand and time deposits,
(2) makes loans to individuals and organizations, and
(3) provides services such as documentary collections,international banking, trade financing.
It raises funds by collecting deposits from businesses and consumers
via checkable deposits, savings deposits, and time (or term) deposits.
It makes loans to businesses and consumers.It also buys corporate bonds and government bonds.
Its primary liabilities are deposits and primary assets are loans and
bonds.
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Commercial banks
Structured
ScheduledCommercial Banks
Unscheduled
Commercial Banks
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Scheduled Banks in India constitute those banks which
have been included in the Second Schedule of Reserve Bank
of India(RBI) Act, 1934.
RBI in turn includes only those banks in this schedule which
satisfy the criteria laid down vide section 42 (6) (a) of the
Act.As on 30th June, 1999, there were 300 scheduled banks in
India having a total network of 64,918 branches.
Publice sector banks
State Bank of India
State Bank of Bikaner and Jaipur
State Bank of Hyderabad
Andhra Bank
Private sector banks
ING Vysya Bank Ltd
ICICI Bank Ltd
South Indian Bank
HDFC Bank Ltd
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"Non-scheduled bank in India" means a banking company as
defined in clause (c) of section 5 of theB
anking RegulationAct, 1949 (10 of 1949), which is not a scheduled bank".
Bharat Overseas Bank Ltd.
City Union Bank Ltd.
Development Credit Bank Ltd.
Ing Vysya Bank Ltd.The Karnataka Bank Ltd.
Lord Krishna Bank Ltd.
The Bank of Rajasthan Ltd.
The Catholic Syrian Bank Ltd.
The Dhanalakshmi Bank Ltd.
The Federal Bank Ltd.The Ganesh Bank of Kurundwad Ltd.
The Jammu & Kashmir Bank Ltd.
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Board of Directors
Chief Administrative Officer (Board
Chairman/President/CEO/Managing Director
Accounting &Operations Division
Accounting & Audit
Department
Operations(check clearing, posting,Account verification, &
Customer complaint)
Fund-Raising &Marketing Division
Tellers orCustomer Service officers
New Accounts
Advertising &Planning
Lending DivisionOr Loans Department
Commercial
Loan Officers
Consumer Loan
Officers
TrustDivision
Personal
Trusts
Business
Trusts
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The functions of a commercial banks are divided into two
categories:
1. Primary functions, and
2. Secondary functions including agency functions.
Primary functions:
The primary functions of a commercial bank include:
a) accepting deposits; and
b) granting loans and advances;
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Secondary functions including agency functions
Issuing letters of credit, travellers cheques, circular notes etc.
Undertaking safe custody of valuables, important documents, and
securities by providing safe deposit vaults or lockers;
Providing customers with facilities of foreign exchange.
Transferring money from one place to another; and from one
branch to another branch of the bank.
Standing guarantee on behalf of its customers, for making
payments for purchase of goods, machinery, vehicles etc.
Collecting and supplying business information;
Issuing demand drafts and pay orders; and,
Providing reports on the credit worthiness of customers.
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Primary functions
These are the main activities of
the bank.
These are the main sources ofincome of the bank.
These are obligatory on the
part of bank to perform.
Secondary functions
These are the secondary
activities of the bank.
These are not the main sourcesof income of the bank.
These are not obligatory on the
part of bank to perform. But
generally all commercial banksperform these activities.
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Banks receive money from the public by way of deposits.
The following types of deposits are usually received by
banks:
i) Current deposit
ii) Saving deposit
iii) Fixed deposit
iv) Recurring depositv) Miscellaneous deposits
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Commercial bank generally lend money in the following
form:
i) Cash credit
ii) Loansa) Demand loan, or
b) Term loan
iii) Bank overdraft, and
iv) Discounting ofBills
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Education loans
Housing loans
Car loans
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Mobilizing Saving for Capital Formation
Financing Industry
Financing Trade
Financing Agriculture
Financing Consumer Activities
Financing Employment Generating Activities.
Help in monetary Policy
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