BANKING AWARENESS-BANKING AND FINANCIAL SYSTEM IN INDIA
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BANKING AND FINANCIAL SYSTEM IN INDIA: The Banking, non-banking and Financial System in India comprises of the following types of institutions -
1.Commercial Banks:There are four types of Commercial Banks in India. a) Public Sector Banks b) Private Sector Banks c) Foreign Sector d) Cooperative Banks/Institutions.
Cooperative Banks/institutions are of three types i) Urban Cooperative Banks ii) State Cooperative Banks iii)Central Cooperative Banks
2. Financial Institutions:There are three types of Financial Institutions in India and they are a) All -India Financial Institutions (AIFIs) b)State Financial Corporations (SFCs) c) State Industrial Development Corporations (SIDCs)
3. Non-Banking Financial Companies (NBFCs):Non-Banking Financial Companies are fast emerging as an important segment of Indian financial system. This group performing financial intermediation in many ways. The most important part is that these companies raise funds from public directly or indirectly and lend them to the ultimate spenders.
4.Capital Market Intermediaries
Structure of Commercial Banking in India: Bank is an institutions that accepts deposits from the public,mobilizes their savings and keeps the same under its custody, these deposits can be withdrawn by Cheques or ATMs or any other available methods. Banks lends money to those who need it and also performs diverse agency functions and also create credit. Commercial banks are the institutions that accept deposits from the people and advances loans. Commercial Banks are create credit. In India, such banks alone called commercial banks which are established in accordance with the provision of the Banking Regulation Act, 1949. Commercial banks may be a Scheduled banks or Non-Scheduled banks. Scheduled banks is classi fied into two big category based on the ownership of the bank. I) Public Sector Banks II) Private Sector banks Public Sector Banks is again divided into three category and they are i) Nationalized Banks, ii) State Bank of India and It’s Associate Group and iii) Regional Rural Banks. Private Sector Banks is also classified into three category i) Old Private Banks ii) New Private Banks iii) Foreign Banks Non-Banking Financial Companies (NBFCs): Non-Banking Financial Companies (NBFCs) are fast emerging as an important segment of Indian Financial System. It is an heterogeneous group of institutions other than commercial and co-operative banks performing financial intermediation in a variety of ways,like accepting deposits, making loans and advances,leasing, hire purchases etc. NBFCs raise funds from the public directly or indirectly and lend them to the ultimate spenders.They advances loans to the various wholesale and retail traders, small -scale industries and self employed persons.Thus they have broadened and diversified the range of products and services offered by a Financial sector.
Difference between NBFCs and Banks:
*1.An NBFCs can’t accept demand deposits.
*2.An NBFCs is not a part of the payment and settlement system and as such an NBFCs cannot issue
cheques drawn on itself.
*3.Deposit insurance facility of deposit insurance and credit, guarantee corporation is not available for NBFC unlike in commercial banking system.
PUBLIC SECTOR BANKS IN INDIA:
Public Sector Banks is the major player in the Indian Banking Sector with 92% of countries banking segment is under state control . In India, the public sector banks are divided into three categories – State Bank Group,Natioanl ised Banks, Regional Rural Banks.
State Bank Group :- This group consist of State Bank of India and Five Sate Bank of India Associate
banks. The RBI owns the majority of the shares of the SBI and some of it’s associates. State Bank of
India is the first public sector bank in india. Imperial bank of india acquired by the government to form the
State Bank of India in 1955. In 1959 the State Bank of India Subsidiary act was passed and by the virtue
of this act seven princly states bank were made the subsidiary of State Bank of India. Now State Bank of
India has only five subsidiary as two of it subsidiary bank merged with the parent concern.
Nationalised Bank:- In 1969 the government of India effected the nationalization of of 14 scheduled
commercial banks in order to expand the branch network followed by six more bank in 1980. Total 20
commercial banks were nationalized in two bank nationalization process but in 1993 New Bank of India
was merged with Punjab National Bank.
Regional Rural Banks - In 1975, the state bank group and nationalized banks were required to sponsor
and set up Regional Rural Banks in partnership with individual states to provide low cost financing and
credit facilities to the rural masses. On the recommendation of the Banking Commission (1972), on
October 2 1975 five Regional Rural Bank were established. Their main function is to provide financial
help to small and marginal farmers and rural workers to help the rural economy to grow.
PRIVATE SECTOR BANKS IN INDIA: There are some banks under private owners.Some of the banks are listed below:- Indian Private Banks: 1. Bank of Rajasthan Ltd. 2. Bharat Overseas Bank Ltd. 3. Catholic Syrian Bank Ltd. 4. Federal Bank Ltd 5. Dhanalakshmi Bank Ltd. 6. Jammu and Kashmir Bank Ltd. 7. Karnataka Bank Ltd. 8. Karur Vysya Bank Ltd. 9. City Union Bank Ltd. 10. Lakshmi Vilas Bank Ltd. 11. Nainital Bank Ltd. 12. Ratnakar Bank Ltd. 13. South Indian Bank Ltd. 14. Tamilnad Mercantile Bank Ltd. 15. ING Vysya Bank Ltd. 16. ICICI Bank Ltd. 17. Axis Bank Ltd. 18. IndusInd Bank Ltd. 19. Yes Bank Ltd. 20. SBI Commercial and International Bank Ltd. 21. HDFC Bank Ltd. 22. Development Credit Bank Ltd. 23. Kotak Mahindra Bank Ltd. Foreign Private Banks in India: 1. The Royal Bank of Scotland 2. Abu Dhabi Commercial Bank 3. American Express Bank Ltd. 4. Bank of America, NA 5. Bank of Bahrain & Kuwai t BSC 6. Mashreq Bank PSC 7. Bank of Nova Scotia 8. Bank of Tokyo Mi tsubishi UFJ Ltd. 9. Ci ti Bank N.A. 10. Deutsche Bank 11. HSBC Ltd. 12. Societe Generale 13. Sonal i Bank 14. BNP Paribas Bank 15. Barclays Bank p.l .c. 16. DBS Bank Ltd. 17. Bank International Indonesia 18. Arab Bangladesh Bank Ltd. 19. Standard Chartered Bank 20. State Bank of Mauri tius Ltd. 21. Bank of Ceylon 22. Cho Hung Bank 23. China Trust Commercial Bank 24. Krung Thai Bank plc. 25. Antwerp Diamond Bank N.V. 26. J P Morgan Chase Bank 27. Mizuho Corporate Bank Ltd. 28. Oman International Bank SAOG 29. Credi t Agricole Corporate and Investment Bank |
