Introduction to Banking INDIAN BANKING SYSTEM PUBLIC SECTOR BANKS = SBG + PSBs + IDBI Bank PRIVATE SECTOR BANKS IN INDIA (Old + New) Cooperative Banks; Regional Rural Banks (RRBs) INDIAN BANKS OPERATIONS ABROAD Local Area Banks (LABs) – 4 are functional now! PRE-REFORMS DEVELOPMENT CREDIT GUARANTEE FUND TRUST FOR SMALL INDUSTRIES 06/06/22 BANKING 2009 1
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Introduction to Banking INDIAN BANKING SYSTEM
PUBLIC SECTOR BANKS = SBG + PSBs + IDBI Bank
PRIVATE SECTOR BANKS IN INDIA (Old + New)Cooperative Banks; Regional Rural Banks
(RRBs)INDIAN BANKS OPERATIONS ABROADLocal Area Banks (LABs) – 4 are functional now!PRE-REFORMS DEVELOPMENTCREDIT GUARANTEE FUND TRUST FOR SMALL
INDUSTRIES
04/07/23 BANKING 2009 1
BANKING DEFINED… DERIVED FROM FRENCH WORD “BANQUE”
MEANING A BENCHALSO, FROM GERMAN WORD “BACK” MEANING
A JOINT STOCK FUNDHISTORY………….. BANK OF ENGLAND – 1694 ADBANK OF HINDUSTAN, INDIA – 1770LARGE SCALE CLOSURES DURING 1929-32THREE PRESIDENCY BANKS – BANK OF BENGAL
(1809), BANK OF BOMBAY (1840) AND BANK OF MADRAS (1843) IN CALCUTTA, BOMBAY AND MADRAS…. ALL 3 MERGED AS IMPERIAL BANK OF INDIA IN 1919 – LATER BECAME STATE BANK OF INDIA IN 1955
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DEVELOPMENTS…MANY MORE BANKS ALSO OPENED…………CRISIS BETWEEN 1913-1917 – 588 BANKS
FAILEDBANKING COMPANIES (INSPECTION
ORDINANCE) ISSUED IN JANUARY 1946; BANKING COMPANIES (RESTRICTION OF BRANCHES) ACT PASSED IN FEBRUARY 1946
THE BANKING COMPANIES ACT PASSED IN FEB 1946
AMENDED AS BANKING REGULATION ACT, 1949
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DEVELOPMENTS…2RBI ACT, 1934 WAS PASSED (1ST APRIL, 1935)FIRST CENTRAL BANK OF THE COUNTRYTOOK OVER FUNCTIONS FROM IMPERIAL
BANKRBI NATIONALISED ON 01.01.1949IMPERIAL BANK OF INDIA PARTIALLY
NATIONALISED AS STATE BANK OF INDIA IN 1955
IN 1959, SEVEN SUBSIDIARIES ADDED TO STATE BANK GROUP – BIKANER & JAIPUR, HYDERABAD, INDORE, MYSORE, PATIALA, SAURASHTRA AND TRAVANCORE……………….
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DEVELOPMENTS…319TH JULY, 1969 – GOI TOOK OVER CONTROL OF 14
PRIVATE BANKS WITH DEPOSITS OVER Rs 50 CRs15TH APRIL, 1980 – SIX MORE BANKS WITH DTL
EXCEEDING Rs 200 CRORES NATIONALISEDIN 1993, NEW BANK OF INDIA WAS MERGED WITH
PUNJAB NATIONAL BANK…………(BOTH ARE PSBs)NOW, WE HAVE SBI + SIX SUBSIDIARIES AS
SBGROUP (AFTER MERGER OF SB SAURASHTRA WITH SBI), 19 PUBLIC SECTOR BANKS, AND IDBI BANK LTD (AFTER REVERSE MERGER WITH IDBI)
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PRIVATE BANKS IN INDIARBI (1934) NATIONALISED IN 1948……………… IMPERIAL BANK OF INDIA (1919) WAS CONVERTED TO STATE
BANK OF INDIA IN 195514 PRIVATE BANKS NATIONALISED IN 1969AGAIN, 6 MORE NATIONALISED IN 1980BANK OF RAJASTHAN, DHANALAKSHMI, FEDERAL, SOUTH
State Bank GroupSTATE BANK OF INDIA – 1955Seven Subsidiaries in 1957
STATE BANK OF HYDERABADSTATE BANK OF MYSORESTATE BANK OF BIKANER & JAIPURSTATE BANK OF TRAVANCORESTATE BANK OF INDORESTATE BANK OF PATIALASTATE BANK OF SAURASHTRA* (since merged
with SBI)
04/07/23Financial Services : IFS 17
Com Bkg 2008 ALM 2008 18
Reserve Bank of India
Scheduled Banks
Commercial banks Co-operatives
RRBs (96)Foreign Banks (29)
Local Area Banks 4Public Sector Banks
(27)
StateCO-operatives
(16)Urban Co-operatives
(52)
Private Sector Banks(23)
New (6)Old (17)
IDBI BankState Bank of India& Associates (7)
Nationalised & PSBs (19)
BALANCE SHEET OF A BANK
Com Bkg 2008 ALM 2008 19
Economic FactorsBanks
Economic Policies
Liabilities Assets
Capital Cash and Balances at RBIReserves and SurplusDepositsBorrowings InvestmentsOther Liabilities and Provisions AdvancesContingent Liabilities Fixed Assets
Other Assets
Balance with banks and money at call and short notice