STOCK MARKET IN INDIA

BANKING AWARENESS- STOCK MARKET IN INDIA

Stock Market refers to a market place where investors cab buy and sell stocks. The price at which each buying and selling transaction takes i  determined by the market forces. Here market forces are demand and supply for a particular stock. In earlier times, stock brokers assembles at a stock exchange to purchase and sale stock or in one word to make transactions. But now stock market became paperless. Almost all  transaction are done electronically. Presently there are total 23 stock exchange in India. 1.  Bombay Stock Exchange (BSE) 2.  National  Stock Exchange (NSE) 3.  Ahmedabad Stock Exchange 4.  Bangalore Stock Exchange 5.  Bhubaneshwar Stock Exchange 6.  Calcutta Stock Exchange 7.  Cochin Stock Exchange 8.  Coimbatore Stock Exchange 9.  Delhi  Stock Exchange 10.  Guwahati  Stock Exchange 11.  Hyderabad Stock Exchange 12.  Jaipur Stock Exchange 13.  Ludhiana Stock Exchange 14.  Madhyapradesh Stock Exchange 15.  Madras Stock Exchange 16.  Magadh Stock Exchange 17.  Mangalore Stock Exchange 18.  Meerut Stock Exchange 19.  OTC Exchange of India 20.  Pune Stock Exchange 21.  Saurashtra Stock Exchange 22.  Uttar Pradesh Stock Exchange 23.  Vadodara Stock Exchange Important Points *Oldest Stock Exchange in India – Bombay Stock Exchange *Largest Stock Exchange in India – National  Stock Exchange *Regulatory Authority of Stock Market – SEBI *Youngest stock exchange in India – Coimbatore Stock Exchange Bombay Stock Exchange (BSE)         Bombay Stock Exchange (BSE) is a stock exchange located on Dalal  Street, Mumbai . Bombay Stock Exchange is the oldest Stock Exchange in Asia. This stock exchange was ini tial ly started by five stock broker outside Mumbai  Town hall  Under a banyan tree in 1850. In 1875 i t become an official  organization known as ‘The Native Share & Stock Brokers Association’. After Independence, In 1956 Bombay Stock Exchange became the first stock exchange to be recognized by the Indian Government under the Securities Contracts Regulation Act. *BSE Founded in 1875 *CEO and MD of BSE – Madhu Kannan *No. of Company listed – 5,085 *BSE Indexes- BSE SENSEX,BSE Small  Cap,BSE Mid-Cap,BSE 500 *Oldest Stock Exchange in Asia National Stock Exchange of India (NSE)          National  Stock Exchange of India (NSE) – In order to l i ft the Indian stock market trading system on par with the International  standards and on the basis of the recommendations of high powered Pherwani  Committee, the National  Stock Exchange was incorporated in 1992 by Industrial  Development Bank of India, Industrial  Credit and Investment Corporation of India, Industrial  Finance Corporation of India, All  Insurance Corporations,Selected commercial  banks and others.The National  Stock Exchange (NSE) is the 9th largest stock exchange in the world by market capitalization and largest in India by daily turnover and number of trades, for both equities and derivative trading. NSE is located in Mumbai , Maharastra.In November,1992 SEBI was incorporated as a tax-paying company.In Apri l  1993, it was recognized as a stock exchange under the Securi ties Contracts (Regulation) Act,1956.NSE Incorporated on the recommendation of Pherwani  Committee.NSE commenced operations in the Wholesale Debt Market (WDM) segment in June 1994 .The Capi tal  market (Equi ties) segment of the NSE commenced operations in November 1994.In October 1995 NSE Became largest stock exchange in the country Derivatives segment commenced in June 2000.Managing Di rector of NSE- Ravi  Narain.No. of l istings- 1,552.NSE Indexes – S&P CNX Ni fty,CNX Ni fty Junior,S&P CNX 500. Bank for International Settlements (BIS) –Important points to remember *Bank for International  Settlements is an International  organization. *BIS was established by the Hague agreements. *BIS was established in 1930. *Fi rst General  Manager of BIS was Pierre Quesnay of France. *The purpose of is to increase the cooperation between the Central  banks. *Number of member – 58 central  banks *Location of Bank for International  Settlements (BIS) – Basel , Swi tzerland *The present General  manager of – Jaime Caruana of Spain. *Bank for International  Settlements (BIS) also provides banking services, but only to central  banks, or to international  organizations like itself. *BIS has representative offices in Hong Kong and Mexico City. *In 2004 Bank for International  Settlements (BIS) has publ ished i ts accounts in terms of Special *Drawing Rights, or SDRs, replacing the Gold Franc as the bank’s uni t of account. International Monetary Fund (IMF) – Functions,Important Points    IMF is an intergovernmental  organization that promotes international  economic cooperation. International Monetary Fund (IMF) was set up by 44 nation under the Bretton Woods Agreement of July 1944. This institute was established on 27th December 1945, But i t started i t’s function on 1st march 1947. Functions of IMF: *To remove short term defici t in Balance of Payment (BOP). *To maintain the stabi l i ty in Exchange rate system. *To Focusing in particular on pol icies that have an impact on the exchange rate. *Important Points to Remember about IMF: *Headquarter at- Washington, D.C. ,Uni ted States *Membership- 185 Nations (Founding); 187 Nations (To Date) *The financial year of IMF - 1st May-30th Apri l *The Head of IMF is known as Managing Di rector. *The head of IMF elected for 5 years. But can be removed earl ier. *Present head of IMF - Christine Lagarde [Former finance minister of France] *Latest/ Last Member of IMF- Tuvalu *Quotas and Voting Ranking- India occupy 9th Place in IMF General  quotas where USA in 1st, Japan *in 2nd, Germany in 3rd Place. *Special Drawing Rights (SDR) - It was created by IMF in 1971. It is also known as Paper Gold. Cuba left IMF in 1964. Cuba is not a Member of IMF.

IFCI,SIDBI,IDBI,EXIM,NHB,SEBI

BANKING AWARENESS-Industrial Finance Corporation of India(IFCI)

In 1947, at the of Independence, there was a significant demand for new capital  but the Indian Capital  Market was relatively under-developed. Merchant bankers and underwriting firms were almost non existence and commercial  banks were not quipped to provide long term industrial  finance in any significant manner.The Industrial  Finance Corporation of India (IFCI) was established on July 1, 1948.IFCI was the fi rst Development Financial  Institution (DFI) in India.IFCI was established to cater to the long-term finance needs of the industrial  sector.Until  the establishment of ICICI and IDBI, The IFCI remained solely responsible for implementation of the government’s industrial  policy.Some of the sector that benefited from IFCI include – Textiles, paper, sugar, hotels, hospitals, iron and steel , fertilizers, basic chemicals, cement, power generation etc. Small Industries Development Bank of India (SIDBI) – Important Points            Small  Industries Development Bank of India (SIDBI) was established on Apri l  2, 1990.The Small  Industries Development Bank of India Act passed in 1989.SIDBI was incorporated initially as a wholly owned subsidiary of Industrial  Development Bank of Ind Now SIDBI is owned by several  state-owned banks, insurance companies and financial  insti tutions.SIDBI is an independent financial  institution aimed to aid the growth and development of micro, small  and medium-scale enterprises in India.It is an apex body and nodal  agency for formulating, coordination and moni toring the pol icies and programme for promotion and development of smal l  scale industries.SIDBI is in the list of top 30 Development Banks of the World in the latest ranking of The Banker,London. IDBI – Industrial Development Bank of India           The Industrial  Development Bank of India (IDBI) was established on 1 July 1964 under an Act of Parliament as a wholly owned subsidiary of the Reserve Bank of India.In 16 February 1976, the ownership of IDBI was transferred to the Government of India.IDBI was made the principal  financial  insti tution for coordinating the activi ties of insti tutions engaged in financing, promoting and developing industry in the country.Headquarters of IDBI is at Mumbai , India.Chai rman and Managing director of IDBI is Shri  neelabh krishna.IDBI is the 4th largest Bank in India in overall  rating.Currently 10th largest development bank in the world.RBI categorised IDBI as an “other public sector bank”.Finance and insurance are the product of IDBI.Industrial  Development Bank of India (IDBI) has now a network of 909 branches, 621 centres and 1512 ATMs.In March 2008, IDBI Bank entered into a joint venture wi th Federal  Bank and Fortis Insurance International  to form IDBI Fortis Li fe Insurance.IDBI Fortis Li fe Insurance is renamed to IDBI Federal  Li fe Insurance Co Ltd.IDBI recently inaugurated i ts 909th Branch at Ranikhet, Uttrakhand on October 13, 2011.IDBI was the winner in two categories in Dun & Bradstreet’s Polaris Software Banking Awards 2011 RBI appointed S.H.Khan committee which recommended its transformation into a universal  bank.In 2006 IDBI Bank acquired Uni ted Western Bank in a rescue. Export-Import Bank of India (EXIM Bank) –Important Points    Export-Import Bank of India or EXIM Bank of India is the premier export finance insti tution of India. EXIM Bank was set up in 1982 under the Export-Import Bank of India Act 1981. The main objective behind the formation of EXIM bank is to enhance countries exports from India and to integrate  the country’s foreign trade and investment with the overall  economic growth. Important Points about EXIM Bank: *Export-Import Bank of India was established on 1982. *Export-Import Bank of India was set up under the Export-Import Bank of India Act 1981. *Headquarters of EXIM Bank is at Mumbai , India *Chairman and Managing Di rector (CMD) of EXIM bank is T.C.A Ranganathan. National Housing Bank – Important points to remember * The National  Housing Bank (NHB) is a state owned bank. *National  Housing Bank is a regulation authority in India. *National  Housing Bank was established on July 8, 1988. *National  Housing Bank was established under section 6 of the National  Housing Bank Act (1987). *The headquarters of National  Housing Bank (NHB) is in New Delhi . *The National  Housing Bank (NHB) owned by the Reserve Bank of India. *The National  Housing Bank (NHB) was established to promote private real  estate acquisition in India. *The The National  Housing Bank (NHB) is regulating and re-financing social  housing programs and other activities. SEBI- Securities and Exchange Board of India        Securities and Exchange Board of India (SEBI) was established by Government of India through an executive resolution in the year 1988. SEBI was subsequently upgraded as a fully autonomous body in 1992 with the passing of the Securities and Exchange Board of India Act (SEBI Act) on 30th January 1992. In the year 1995,the SEBI was given additional  statutory power by the Government of India through an amendment to the securities and Exchange Board of India Act 1992.The headquarter of SEBI is located in the business district of Bandra-Kurla complex in Mumbai .The Chairman of SEBI – Upendra Kumar Sinha (UK Sinha) The Whole Time Member of SEBI- Prashant Saran The first chairman of SEBI was – Dr. S. A. Dave.SEBI deals with – the issuers of securities,the investors and the market intermediaries. Basic Objective of SEBI - 1.  To Promote the interests of  investors in securities 2.  To promote the development of Securities Market 3.  To regulate the securities market 4.  For matters connected therewith or incidental  thereto.

Debt Recovery Tribunal AND CREDIT AGENCIES IN INDIA

BANKING AWARENESS-Debt Recovery Tribunal

Keeping in line with the international  trends on helping financial  institutions recover their bad Debt quickly and efficiently, the Government of India has constituted 33 Debt Recovery Tribunals and five Debt Recovery Appellate Tribunals across the country.The Debt Recovery Tribunals (DRTs) have been established by the Government of India under an Act of Parliament (Act 51 of 1993) for expeditious adjudication and recovery of debts due to banks and financial institutions. The Debt Recovery Tribunal  is also the appellate authority for appeals filed against the proceedings initiated by secured creditors under the Securitization and Reconstruction of Financial  Assets and Enforcement of Security Interest Act.The Debt Recovery Tribunals are located across the country. Some cities have more than one Debt Recovery Tribunal  located therein. New Delhi  and Mumbai  have three Debt Recovery Tribunals. Chennai  and Kolkata have two Debt Recovery Tribunals each. One Debt Recovery Tribunal  each has been constituted at Ahmdabad, Allahabad, Arungabad, Bangalore, Chandigrah, Coimbatore, Cuttack, Ernakulam, Guwahati , Hydrabad, Jabalpur, Jaipur, Lucknow, Nagpur, Patna, Pune, Ranchi  and Vishakapatnam.There area number of States that do not have a Debt Recovery Tribunal . The Banks & Financial  Institutions and other parties in these States have to go to Debt Recovery Tribunal  located in other states having jurisdiction over there area.. Thus the territorial  jurisdiction of some Debt Recovery Tribunal  is very vast. For example, the Debt Recovery Tribunal  located in Guwahati  has jurisdiction over all  the seven North Eastern States. Similarly, the territorial  -jurisdiction of the Debt Recovery Tribunal  located at Chandhigarh too has a very wide jurisdiction over the States of Punjab, Harayana, Chandhigarh.The setting up of a Debt Recovery Tribunal  is dependent upon the volume of cases. Higher the number of cases wi thin a terri torial  area, more Debt Recovery Tribunal  would be set up. Each Debt Recovery Tribunal  is presided over by a Presiding Officer. The .Presiding Officer is general ly a judge of the rank of Dist. & Sessions Judge. A Presiding Officer of a Debt Recovery Tribunal  is assisted by a number of officers of other ranks, but none of them need necessarily have a judicial  back ground. Therefore, the Presiding Officer of a Debt Recovery Tribunal  is the sole judicial  authority to hear and pass any judicial  order.Each Debt Recovery . Tribunal  has two Recovery Officers. The work amongst the Recovery Officers is allocated by the Presiding Officer. Though a Recovery Officer need not be a judicial  Officer, but the orders passed by a Recovery Officer are judicial  in nature, and are appealable before the Presiding Officer of the tribunal.  CREDIT RATING AGENCIES IN INDIA              The Credit Rating Agencies in India were mainly formed to assess the condition of the financial  sector and to find out avenues for more improvement. The credit rating agencies offer various services as - *Operation upgradation  *Training to employee *Scrutinize new projects *rate different sectors The Two most important credit rating agencies in India are ICRA and CRISIL. ICRA: ICRA Limited (ICRA) is one of India’s premier financial  information services company.ICRA Limited is one of the Credit Rating Agency in India.ICRA also provide professional  financial  services in the Asia-Pacific region through i ts subsidiaries. ICRA Limited, was established in 1991, and was originally named Investment Information and Credit Rating Agency of India Limited (IICRA India).Headquarters of ICRA is at New Delhi , India.IICRA India changed i ts name to ICRA Limited, and went public on 13 April  1997.ICRA Limited listed on the Bombay Stock Exchange (BSE) and the National  Stock Exchange (NSE).ICRA Limited is a Public Company.ICRA offers Industry Financial  services and Credit ratings services.CEO of ICRA Limited is Naresh Takkar. CRISIL: CRISIL or Credit Rating and Information Services of India Ltd. is a global  analytical  company which provides services like ratings, research, and risk & policy advisory.CRISIL is the largest credit rating agency in India.CRISIL was established on 1987.CRISIL pioneered ratings in India more than 20 years ago Today, CRISIL is the undisputed business leader in Ratings.CRISIL’s Global  Analytical  Centre (GAC) supports the Global  Resource Management initiative of Standard & Poor’s (S&P).

BUDGET

GENERAL AWARENESS -BUDGET

On November 26, 1947 R.K. Shanmukham Chetty had presented the first budget of Independent India. But actually it was a review of the economy and no new taxes were proposed as the budget day for 1948-49 was just 95 days away. From then onwards an interim budget began to mean a budget for a short period. Chetty resigned a few days later due to differences with Prime Minister Nehru. K.C. Neogy then took charge of the Finance portfolio and held that office for just 35 days. John Mathai  became the third Finance Minister of India presenting the budget for 1950-51, the first budget for the Republic of India. The next Finance Minister, C.D. Deshmukb presented the first budget in the first elected Parliament on the basis of adult franchise. Budget papers began to be prepared in Hindi  from 1955-56.         In 1959 Morarji Desai  became the Finance Minister. He has presented the maximum number of budgets so far- ten. They in​ cluded five annual  and one interim budgets during his first stint and three final  and one interim in the second tenure when he was both Finance Minister and Deputy Prime Minister. Morarji  Desai  was the only Finance Minister to have had the opportuni ty to present two budgets on his bi rthday —in 1964 and 1968. He was born on February 29. After the fourth General  Elections in 1967, Morarji  Desai  once again became the Finance Minister. This was his second stint. After he resigned, Indi ra Gandhi , the then Prime Minister, took over the Finance portfol io. So far,she has been the only woman Finance Minister.Rajiv Gandhi  presented the budget for 1987-88 after V P Singh quit his government, and in the process became only the thi rd Prime Minister to present a budget after his mother and grandfather. Yashwant Sinha became the Finance Min​ ister and presented the interim budget for 1991-92.In the election held in May 1991, the Congress returned to power and Manmohan Singh became the Finance Minis​ ter. This was the fi rst occasion when the interim and final  budgets were presented by two ministers of two di fferent pol i tical  parties. Manmohan Singh opened the economy, en-couraged foreign investments, reduced peak importduty from 300 plus percent to 50 percent and introduced the con​ cept of service tax.After the elections another non-Congress ministry as​ sumed office. So, a final  budget for 1996-97 was presented by P. Chidambaram of the then Tami l  Maani la Congress. It was the second time that an interim and final  budgets were presented by two ministers of di fferent pol i tical  parties.Fol lowing a consti tutional  crisis the I.K. Gujral  Ministry was on i ts way out and a special  session of Parl iament was convened only to pass Chidambaram’s 1997-98 budget. It was passed wi thout a debate.Unti l  2000, the Union Budget was announced at 5 pm on the last working day of the month of February. This practice was inheri ted from the Bri tish, when thei r Parl iament would pass the budget in the noon fol lowed by India in the evening of the day. Yashwant Sinha changed the timing to 11 a.m. Types of Budget: Types of Budget in India:        What is Budget? how many types of Budget present in India? Here we have explained the types of Budget present.Balanced Budget: Balanced Budget is a budget where receipts are equal  to current expenditure. That means that taxes on income and expenditure etc are sufficient to meet payments for goods and services, interest on the national  debt etc. A balanced budget is, however, not necessarily an ideal  one – economist John Maynard Keynes has shown how budget surpluses and deficits can be used to stimulate or regulate the economy, by affecting the levels of demand and prices. Revenue Budget: Revenue Budget consists of revenue receipts of government (revenues from tax and other sources) and the expendi​ture met from these revenues. Tax revenues are made up of taxes and other duties that the Union government levies. The other receipts consist mainly of interest and dividend on in​ vestments made by Government, fees, and other receipts for services rendered by Government.Receipts Budget: Estimates of receipts included in the Annual  Financial  Statement are further analyzed in this document. The docu​ment also gives details of revenue and capital  receipts, the trend of receipts over the years and, more importantly the details of external  assistance received by the Government.Performance Budgets: These budgets are prepared by all  ministries dealing with development activities. Also provided are separate appraisal  reports in respect of certain major Central  Sector Projects/ Programs. A statement is included on the programs and performances of each public sector undertaking under the respective administrative ministry, indicating the installed and utilized capacity, physical  targets and achievements, resul ts of operations, and return on capital .Zero-base budget: Fol lowing a considerable period of investigation and examination, zero-base budgeting was adopted in India in 1986 as a technique for determining expendi ture budgets. Accordingly the Ministry of Finance instructed all  the administrative ministries to review their respective programs and activities in order to prepare expenditure budget estimates based on the principles of zero-base budgeting.

ATM'S

BANKING AWARENESS-BIO METRIC ATM'S

TAKING ATMS: The specially designed Automated Teller Machine (ATM) which can be operated independently by a visually impaired person, know as ‘Talking ATM’. FOREIGN DIRECT INVESTMENT(FDI) Limit in India All Sector    Present Foreign Direct Investment (FDI) Limits in India. Sector-wise FDI ceiling/ limits in India. FDI or Foreign Direct Investment means net inflows of investment to acquire a lasting management interest in an enterprise operating in an economy other than that of the investor. Here is the list of FDI limit of All Sectors: Hotels and Tourism, Roads and Highway, Education, Advertisement, Farm sector, Petro Chemical , Pharmaceuticals, Coal  and Lignite – 100% FDI in Multi Brand retail: Al lowed FDI in Multi  brand retail  -  51% FDI in Single Brand retail: Al lowed FDI in Single brand retail  -  100% FDI in Courier Service: Al lowed FDI in Courier Service – 100% FDI in Telecom Sector: Al lowed FDI in Telecom – 100% FDI in Asset Reconstruction Sector: Al lowed FDI in Asset Reconstruction – 100% FDI in Power Exchanges: Al lowed FDI in Power Exchanges – 49% FDI in Petroleum Refining: Al lowed FDI in Petroleum Refining – 49% FDI in Civil Aviation sector: Allowed FDI in Civil Aviation – 49% The Civi l  Aviation sector includes Ai rports, Scheduled and Non-Scheduled domestic passenger airlines, Hel icopter services / Seaplane services, Ground Handling Services, Maintenance and Repair organizations;Flying training institutes; and Technical  training institutions. FDI In Insurance Sector: Allowed FDI in Insurance Sector – 49% FDI in the Insurance sector, as prescribed in the Insurance Act, 1999, is al lowed under the automatic route. FDI in Defense Sector: Allowed FDI in Defense Sector – 26% FDI in defense industry subject to Industrial  license under the Industries (Development and Regulation) Act 1951 would be al lowed up to 26% through government approval  route. FDI in Print Media: Allowed FDI in Print Media – 26% Publishing of Newspaper and periodicals dealing with news and current affairs- 26%. Publication of Indian editions of foreign magazines dealing with news and current affairs- 26% . FDI in Broadcasting Sector: FM Radio Stations 20% Cable Network 49% Direct –to-Home (d2h) Services – 49% FDI limit in Headend-In-The-Sky (HITS) Broadcasting Service – 74% (total  direct and indirect foreign investment including portfolio and FDI) Automatic upto 49% Government route beyond 49% and up to 74%.Setting up hardware facilities such as up-linking, HUB etc. – 49% FDI in Agriculture Sector: FDI up to 100% is permitted, under the automatic route, subject to certain condi tions mentioned in Consol idated FDI Pol icy, in the fol lowing agricultural  activities:  Floriculture, Horticulture, Apiculture and Cultivation of Vegetables & Mushrooms under control led conditions; Development and production of Seeds and planting material ; Animal  Husbandry (including breeding of dogs), Piscicuture, Aquaculture, under control led conditions; and Services related to agro and allied sectors.100% FDI is also permitted in tea sector. Tea plantation – 49% Besides the above, FDI is not allowed in any other agricultural  sector/ activity. FDI In Credit Information Companies: Allowed FDI in Credit Information Companies – 74%  FDI in Stock Exchanges, Depositors: Allowed FDI in Stock Exchanges, depositors – 49% FDI In Banking Sector in India: New Bank (After August, 2011) – 49% Allowed FDI in Private Sector Banks- 74%. FDI in private banking sector of India is allowed up to 74% where FDI up to 49% is allowed through automatic route and FDI beyond 49% but up to 74% is allowed through government approval  route. Allowed FDI in Public Sector Banks- 49%. Limit for FDI in public sector banks In the case of nationalized banks as well as SBI and its associate banks, the overall statutory limit of 20 per cent as FDI and portfolio investment will continue. FOREIGN INSTITUTIONAL INVESTOR (FII) – Important Points, Short Notes about FII        Foreign Institutional  Investor (FII) means “an institution established or incorporated outside India which proposes to make investment in India in securities, real  property and other investment assets”. In India Foreign Institutional  Investor (FII) refers to outside companies investing in the Indian Financial Markets.India opened i ts stock market to Foreign Institutional  Investors (FII) in September 1992. Since 1993, India       received portfolio investment from foreigners in the form of Foreign Institutional  Investment (FII) in equi ties.In order to trade in Indian equi ty market, all  Foreign Insti tutional  Investors (FII) must register wi th the Securi ties and Exchange Board of India (SEBI) which is the regulator for the securi ties market in India. One who propose to invest their proprietary funds or on behalf of “broad based” funds or of foreign corporates and individuals and belong to any of the under given categories can be registered for FII. *Pension Funds *Mutual  Funds *Investment Trust *Insurance or reinsurance companies *Endowment Funds *University Funds *Foundations or Charitable Trusts or Charitable Societies who propose to invest on *thei r own behalf, and *Asset Management Companies *Nominee Companies *Institutional  Portfolio Managers *Trustees *Power of Attorney Holders *Bank

GROSS DOMESTIC PRODUCT

BANKING AWARENESS-GROSS DOMESTIC PRODUCT

What is GDP?        Gross Domestic Product (GDP) is the market value of all  final  goods and services produced within a country in a given period of time. GDP is the basic measure of the country’s economic performance over a given period. GDP is measured by three basic approaches 1.  Expenditure approach 2.  Income approach 3.  Value based approach Types of GDP: *Real  GDP *Nominal  GDP           Real  GDP is the production of goods and services valued at constant prices whereas nominal  GDP is the production of goods and services valued at current prices. But why we need to measure both real and nominal GDP?      Now when the total  spending increases in a given period i t points towards two happenings, either the goods or services are sold at higher prices (i .e inflation has increased) or the total  output of goods and services have increased. While studying economy, economist tries to separate these two effects. Hence they measure the real  GDP which allows them to find whether production of goods and services has increased or decreased over the periods.          Components of GDP: GDP is a variable which depends upon four other variables. These variables form components of GDP     GDP = C+I+G+NX  C= total  consumption  I = gross investment G= Government spending NX= exports less imports Consumption is spending by households on goods and services. Here we do not include purchase of new housing.Investment is spending on inventories. Equipments and purchase of new housing Government spending includes spending on goods and services by state and central  government Net exports spending on the domestic products by foreigners less spending on foreign products by locals. RuPay Card – All Information about RuPay and RuPay Card       All Information about RuPay and RuPay Cards (RuPay ATM, RuPay MicroATM, Debit, Prepaid and Credit Cards) Short Notes of RuPay: RuPay is the Indian domestic card payment network set up by National  Payments Corporation of India (NPCI) at the behest of banks in India. The RuPay project had been conceived by Indian Banks Association (IBA) and had the approval  of Reserve Bank of India (RBI).National  Payments Corporation of India (NPCI) has a plan to provide a full  range of card payment services including the RuPay ATM, RuPay MicroATM, Debit, Prepaid an Credit Cards which will  be accepted in India and abroad, across various channels like POS, Internet, IVR and mobile etc. The initial  focus of NPCI would be to approach those banks who have not been issuing any payment card at all more specifically – Regional  Rural  Banks (RRBs) and urban co-operative banks.All  Public Sector Undertakings (PSU) banks set to join RuPay system by the end of year 2012. RuPay-based debit cards can be used by the consumers on the Internet from September, 2012.The government of India had launched India’s first domestic payment card network, RuPay, to compete with Visa Inc and Mastercard Inc. Objectives of RuPay:        The Main Objective of the RuPay payment network project is to reduce the overall  transaction cost and develop products appropriate for financial  inclusion. *Reduce overall  transaction cost for the banks in India by introducing competition to international  card schemes. *Develop products appropriate for the country particularly for financial  inclusion. *Provide card payment service option to many banks who are currently not eligible for card issuance under the eligibility criteria of international  card schemes. *Build environment whereby payment information of the country remains within the country Shift Personal  Consumption Expenditure (PCE) from cash to electronic payments in a growing economy with a population of 1.2 billion. Important Points to Remember:    RuPay is the Indian domestic card payment network.The RuPay payment network set up by National  Payments Corporation of India (NPCI) at the behest of banks in India.The RuPay project had been conceived by Indian Banks Association and had the approval  of Reserve Bank of India.The main objective of RuPay project is to reduce overall  transaction cost for the banks in India by introducing competition to international  card schemes.NPCI has plan to provide full  range of credit service like RuPay ATM, RuPay MicroATM, Debit,Prepaid and Credit Cards which will  be accepted across various channel  POS, Internet, IVR, Mobile etc.Al l  state-owned banks are expected to join the RuPay system by the end of this year.RuPay-based debit cards can be used by the consumers on the Internet from September, 2012. Nair Committee Report on Priority Sector Lending:         The Reserve Bank of India, the central  bank of India, on February 21, 2012 has released the report of the Committee (Chairman:  M V Nair, Chairman, Union Bank of India) constituted to re-examine the existing classification and suggest revised guidelines with regard to priority sector lending and related issues.The Reserve Bank India had constituted the Committee un​der the chairmanship of M.V. Nair on August 25, 2011 pursuant to the announcement made in the Monetary Pol icy Statement 2011-12. The Major Recommendations of the Nair Committee are:         The sector ‘agriculture and allied activities’ maybe a com​ posite sector within priority sector, by doing away with dis​ tinction between direct and indirect agriculture. The targets for agriculture and allied activities may be 18 per cent of Adjusted Net Bank Credit (ANBC) or credit equivalent of off-balance sheet exposure (CEOBE), whichever is higher.A sub target for small  and marginal  farmers within agricul​ture and allied activities is recommended,equivalent to 9 percent of ANBC or CEOBE, whichever is higher to be achieved in stages by 2015-16.The MSE sector may continue to be under priority sector. Within MSE sector, a sub target for micro enterprises is recommended equivalent to 7 percent of ANBC or CEOE, whichever is higher to be achieved in stages by 2013-14.The priority sector targets for foreign banks may be increased to 40 percent of ANBC or CEOBE,whichever is higher with sub-target of 15 percent for exports and 15 percent for MSE sector, within which 7 percent may be earmarked for micro enterprises. Bank loans to non-bank financial  intermediaries for on lending to specified segments may be al lowed to be reckoned for classification under priority sector, up to a minimum of 5 percent of ANBC or CEOBE, whichever is higher, subject to certain due diligence and documentation standards. CANARA BANK -IMPORTANT POINTS        Ammembal  Subba Rao Pai  established Canara Hindu Permanent Fund in Mangalore, India, on 1 July 1906.In 1910 the Bank changed it’s name to Canara Bank Limited.Canara Bank Limited was incorporated in 1990.In 1958, the Reserve Bank of India ordered Canara Bank to acquire G. Raghumathmul  Bank, in Hyderabad.G.Raghumathmul  Bank was established in 1870 and converted into limited company on 1925. G. Raghumathmul  Bank had five branch at the time of acquisition.On 19 July 1969 government of India nationalised Canara Bank Limited and i t renamed as Canara Bank after nationalization.In 1976, Canara Bank inaugurated i ts 1000th branch.In 1996 Canara Bank became the fi rst Indian Bank to get ISO certi fication for “Total  Branch Banking” for i ts Seshadripuram branch in Bangalore.In 2005 Canara Bank achieved 100% Branch computerization.In 2006 Canara Bank entered 100th Year in Banking Service. PUNJAB NATIONAL BANK – Important Points           On 19 May 1894 Punjab National  Bank was registered under Act VI of Indian Companies Act 1882. Punjab National  Bank (PNB) was established in Lahore in 1895 (12 April , 1895).Headquarters of Punjab National  Bank is located in New Delhi , India.Present Chairman & MD of Punjab National  Bank is K R Kamath.Fi rst Chai rman & MD of Punjab National  Bank was Sardar Dyal  Singh Majithia.At the time of nationalisation the Chairman and MD of Punjab National  Bank was Somesh Chandra Trikha.Punjab National  Bank is one of the four largest bank in India and second largest publ ic sector bank in India.The first bank purely managed by Indian was Punjab National  Bank.In 1940 PNB absorbed Bhagwan Dass Bank, a scheduled bank located in Delhi  Circle.In 1951 Punjab National  Bank acquired the 39 branches of Bharat Bank (est. 1942) and Bharat Bank became Bharat Nidhi  Ltd.In 1961 Punjab National  Bank acquired Universal  Bank of India.In 1962, PNB amalgamated the Indo-Commercial  Bank withit.In 1986 Punjab National  Bank (PNB) acquired Hindustan Commercial  Bank (est. 1943) in a rescue.In 1993 Punjab National  Bank (PNB) acqui red New Bank of India, a bank which was national ised in 1980 by Govt. of India. In 2003 Punjab National  Bank took over Nedungadi  Bank, the oldest private sector bank in Kerala. Punjab National  Bank was ranked 1243 in the Forbes Global  2000.Punjab National  Bank has more than 5100 offices including 5 overseas branches.PNB receives Best Bank Award-2011 PNB receives the FIBAC 2011 ‘Most Productive Public Sector Bank award.Present Slogan of PNB – The Name you can Bank Upon.  ALLAHABAD BANK-Important Points     Allahabad Bank  started operation in 1865.The head-quarters of Allahabad Bank  is in in Kolkata.Al lahabad Bank has a network of 2500 branches across the country.Chai rman and Managing Director of the bank is Shri  J. P. Dua.In 24 Apri l  1865 A group of Europeans at Al lahabad founded Al lahabad Bank.In 19 July 1969 The Indian Government national ized Al lahabad Bank, together wi th 13 other banks.In October 1989 Al lahabad Bank acqui red Uni ted Industrial  Bank which was establ ished in 1940.Al lahabad Bank establ ished Al lBank Finance Ltd in 1991. It is a whol ly owned Merchant Banking subsidiary.In October 2002 Al lahabad Bank came out wi th an Ini tial  Publ ic Offering (IPO) that reduce government holding in this bank to 77.16%. In June 2006 Allahabad Bank opened its first office outside India when i t opened a representative office in Shenzen, China. In February 2007 Allahabad Bank opened its first overseas branch, in Hong Kong. BANK OF BARODA-Important Points  Bank of Baroda Founded on 1908.Sir Sayajirao Gaekwad III,The Maharajah of Baroda, founded the bank on 20 July 1908 in the princely state of Baroda, in Gujarat.The Headquarters of Bank of Baroda is in Vadodara, India.Chairman & MD of Bank of Baroda is M. D. Mallya.Bank of Baroda is the third largest bank in India.Bank of Baroda is ranked 763 in Forbes Global  2000 list.Bank of Baroda has a network of over 3,409 branches and offices, and about 1,657 ATMs.In 1957 Bank of Baroda establ ished a branch in London.In 1959 Bank of Baroda acqui red Hind Bank.In 1961 Bank of Baroda merged in New Ci tizen Bank of India. This merger helped i t increase i ts branch network in Maharashtra.In 1969 Government of India National ized Bank of Baroda.In 1988 BoB acqui red Traders Bank, which had a branch network in Delhi .In 1998 BoB also acqui red Punjab Cooperative Bank in a rescue.In 2010 Bank of Baroda, Indian Overseas Bank and Andhra Bank jointly opened a Bank I- ndia BIA Bank (Malaysia) in Malaysia.In 2010 BoB opened a branch in New Zealand.Bank of India has the highest number of branches and offices Outside.

CO-OPERATIVE BANKS IN INDIA

BANKING AWARENESS-CO-OPERATIVE BANKS  IN INDIA

Co-Operative Banks in India is created to financing needs of agriculture, retail  trade,small  industry and self-employed business in urban, semi -urban and rural  areas. A distinctive feature of the co-operative credit structure in India is its heterogeneity.  The co-operative banking structure is differ from Urban, Rural  and states.Urban areas are served by Rural  Co-Operative Banks, Rural  Areas are served by Rural  Co-Operative Banks and State Co-Operative bank serves the whole state. The Co-Operative banking sector is the oldest segment of the Indian Banking System. In recent years Reserve Bank of India and National Agriculture and Rural  Development Bank (NABARD) have taken several  important steps to improve the Co-Operative Banking system in India. There are total  six types of co-operative banks are working in India and they are - 1.Primary Agriculture Credit Societies 2.Central  Co-Operative Bank 3.State Co-Operative Bank 4.Primary Co-Operative Agricul ture and Rural  Development Banks 5.State Co-Operative Agricul ture and Rural  Development Banks 6.Urban Co-Operative Banks       As per march 2009 report, In India, there are around 1721 Urban Co-Operative banks and 1119 Rural  Co-Operative Banks. LIST OF CO-OPERATIVE BANKS IN INDIA: Scheduled Urban Co-Operative Banks In India, at present, there are total  53 scheduled Urban Co-Operative banks in India. 1.  Ahmedabad Mercantile Co-Op Bank Ltd. 2.  Kalupur Commercial  Coop.Bank Ltd. 3.  Madhavpura Mercantile Co-Op Bank Ltd. 4.  Mehsana Urban Co-Op Bank Ltd. 5.  Nutan Nagarik Sahakari  Bank Ltd., 6.  Rajkot Nagrik Sahakari  Bank Ltd. 7.  Sardar Bhiladwala Pardi  Peoples Coop Bank Ltd. 8.  Surat Peoples Coop Bank Ltd. 9.  Amanath Co-operative Bank Ltd. 10.  Andhra Pradesh Mahesh Co-Op Urban Bank Ltd. 11.  Charminar Co-operative Urban Bank Ltd. 12.  Vasavi  Coop Urban Bank LImited. 13.  Indian Mercantile Co-operative Bank Ltd., 14.  Abhyudaya Co-operative Bank Ltd., 15.  Bassein Catholic Co-operative Bank Ltd. 16.  Bharat Co-operative Bank (Mumbai ) Ltd. 17.  Bharati  Sahakari  Bank Limited. 18.  Bombay Mercantile Co-operative Bank Limi ted 19.  Ci tizen Credi t Co-operative Bank Ltd., 20.  Cosmos Co-operative Urban Bank Ltd. 21.  Dombivli  Nagari  Sahakari  Bank Ltd. 22.  Goa Urban Co-operative Bank Limi ted. 23.  Gopinath Patil  Parsik Janata Sahakari  Bank Ltd., 24.  Greater Bombay Co-operative Bank Limi ted 25.  Jalgaon Janata Sahakari  Bank Ltd. 26.  Janakalyan Sahakari  Bank Ltd., 27.  Janalaxmi  Co-operative Bank Ltd., 28.  Janata Sahakari  Bank Ltd., 29.  Kallappanna Awade Ichalkaranji  Janata Sahakari  B 30.  Kalyan Janata Sahakari  Bank Ltd., 31.  Karad Urban Co-operative Bank Ltd. 32.  Mahanagar Co-operative Bank Ltd., 33.  Mapusa Urban Co-operative Bank of Goa Ltd., 34.  Nagar Urban Co-operative Bank Ltd., 35.  Nasik Merchant’s Co-operative Bank Ltd. 36.  New India Co-operative Bank Ltd., 37.  NKGSB Co-operative Bank Ltd., 38.  Pravara Sahakari  Bank Ltd. 39.  Punjab & Maharashtra Co-operative Bank Ltd. 40.  Rupee Co-operative Bank Ltd. 41.  Sangli  Urban Co-operative Bank Ltd., 42.  Saraswat Co-operative Bank Ltd., 43.  Shamrao Vithal  Co-operative Bank Ltd. 44.  Solapur Janata Sahakari  Bank Ltd. 45.  Thane Bharat Sahakari  Bank Ltd. 46.  Thane Janata Sahakari  Bank Ltd. 47.  The Kapol  Co-operative Bank Ltd., 48.  Zoroastrian Co-operative Bank Ltd., 49.  Nagpur Nagrik Sahakari  Bank Ltd. 50.  Shikshak Sahakari  Bank Ltd., 51.  The Akola Janata Commercial  Co-operative Bank L 52.  The Akola Urban Co-operative Bank Ltd., 53.  The Khamgaon Urban Co-operative Bank Ltd. STATE CO-OPERATIVE BANKS: 1.  The Andaman and Nicobar State Co-operative Bank Ltd. 2.  The Andhra Pradesh State Co-operative Bank Ltd. 3.  The Arunachal  Pradesh State co-operative Apex Bank Ltd. 4.  The Assam Co-operative Apex Bank Ltd. 5.  The Bihar State Co-operative Bank Ltd. 6.  The Chandigarh State Co-operative Bank Ltd. 7.  The Delhi  State Co-operative Bank Ltd. 8.  The Goa State Co-operative Bank Ltd. 9.  The Gujarat State Co-operative Bank Ltd. 10.  The Haryana State Co-opertive Apex Bank Ltd. 11.  The Himachal  Pradesh State Co-operative Bank Ltd. 12.  The Jammu and Kashmir State Co-operative Bank Ltd 13.  The Karnataka State Co-operative Apex Bank Ltd. 14.  The Kerala State Co-operative Bank Ltd. 15.  The Madhya Pradesh Rajya Sahakari  Bank Maryadi t 16.  The Maharashtra State Co-operative Bank Ltd. 17.  The Manipur State Co-operative Bank Ltd. 18.  The Meghalaya Co-operative Apex Bank Ltd. 19.  The Mizoram Co-operative Apex Bank Ltd. 20.  The Nagaland State Co-operative Bank Ltd. 21.  The Orissa State Co-operative Bank Ltd. 22.  The Pondichery State Co-opertive Bank Ltd. 23.  The Punjab State Co-operative Bank Ltd. 24.  The Rajasthan State Co-operative Bank Ltd. 25.  The Sikkim State Co-operative Bank Ltd. 26.  The Tami l  Nadu State Apex Co-operative Bank Ltd. 27.  The Tripura State Co-operative Bank Ltd. 28.  The Uttar Pradesh Co-operative Bank Ltd. 29.  The West Bengal  State Co-operative Bank Ltd. 30.  The Chhattisgarh RajyaSahakari  Bank Maryadit 31.  The Uttaranchal  Rajya Sahakari  Bank Ltd. NABARD (National  Bank for Agricul ture and Rural  Development):              National  Bank for Agriculture and Rural  Development (NABARD) is an apex development bank in India. The Committee to Review Arrangements for Institutional  Credit for Agriculture and Rural  Development (CRAFICARD) under the Chairmanship of Shri  B.Sivaraman, conceived and recommended the establishment of the National  Bank for Agriculture and Rural  Development(NABARD).The Committee to Review Arrangements for Institutional  Credit for Agriculture and Rural  Development (CRAFICARD) was set up by the Reserve Bank of India (RBI). NABARD was established on 12 July 1982 by a special  act by the parliament. The main objective behind the set up of NABARD was to uplift rural  India by increasing the credit flow for elevation of agriculture & rural  non farm sector.Government of India holds 99% stake in NABARD and currently  1% is held by the RBI. Initially, the RBI held 72.5 per cent of equity in NABARD but in October, 2012 the Reserve Bank of India (RBI) has divested 71.5 per cent stake amounting to Rs 1,430 crore in National  Bank for Agriculture and Rural  Development (NABARD) in favour of the government. NABARD is active in developing financial  inclusion pol icy and is a member of the Alliance for Financial Inclusion.NABARD replaced the Agricultural  Credit Department (ACD) and Rural  Planning and Credit Cell  (RPCC) of Reserve Bank of India, and Agricultural  Refinance and Development Corporation (ARDC).Headquarters of NABARD is si tuated in Mumbai , Maharashtra, India. The Present Chairman of NABARD is Dr. Prakash Bakshi . Important Points to Remember about NABARD:         National  Bank for Agriculture and Rural  Development (NABARD) is an apex development bank in India.NABARD was established on the recommendations of Shivaraman Committee.NABARD was established by an act of Parliament on 12 July 1982 to implement the National Bank for Agriculture and Rural Development Act 1981.NABARD replaced the Agricultural  Credit Department (ACD) and Rural  Planning and Credit Cell (RPCC) of Reserve Bank of India, and Agricultural  Refinance and Development Corporation (ARDC).Headquarters of NABARD is situated in Mumbai , Maharashtra, India.The Present Chairman of NABARD is Dr. Prakash Bakshi .NABARD completed its 25 years on 12 July 2007 and Completed its 30 year in 12 July, 2012.NABARD announced Rural  Innovation award to celebrate i t’s 30th foundation day. NON PERFORMING ASSETS (NPA) –            A Non-performing asset (NPA) is defined as a credit facility in respect of which the interest and/or instalment of principal  has remained ‘past due’ for a specified period of time. Non-performing assets are one of the talking points of banks in their performance reports. Almost all  banks in India is suffering from the problem of NPA. Here we have discussed the concept of Non-performing Assets. An Assets, including a leased asset, become an NPA when i t ceases to generate income for the bank. An NPA is a loan or an advance where ,The Interest and/or Installment of principal  remain overdue for a period of more than ninety days in respect of a term loan,An account remains ‘out of order’ as indicated in the article below, in respect of an overdraft/cash credit (OD/CC).A bill  remains overdue for a period of more than ninety days, in the case of bills purchased and discounted.An installment of the principal  or the interest thereon remains overdue for one crop season for long duration crops.Banks should classify an account as an NPA only if the interest charged during any quarter is not serviced ful ly within ninety days from the end of the quarter. ‘Out of Order’ status: An account is treated as ‘out of order’, if the outstanding balance remains continuously in excess of the sanctioned limit/drawing power. In cases,where the outstanding balance in the operating account is less than the sanctioned limit/ drawing power, but there are not credi t continuously for ninety days as on the date of balance sheet or credits are not enough to cover the interest debited during the same period, these accounts should be treated as ‘out of order’. Categories of NPAs:       Banks are required to classify non-performing assets into the fol lowing three categories based on the period for which the asset has remained non-performing and reliability of the dues:Substandard Assets – An assets which remained a NPA for a period less than or equal  to twelve months (With Effect from March 31,2005).Doubtful  Assets -An assets would be classified as doubtful  assets if it has remained as Substandard Assets fore more than twelve months(With Effect from March 31, 2005).Loss Assets – A loss assets is one, where the bank of internal  or external  auditors or the RBI inspection has identified the loss but the amount has not been wri tten off wholly. In other words, such l i ttle value that i t’s continuance as a bankable asset is not warranted al though there may be some salvage or recovery value

STATEBANK OF INDIA

BANKING AWARENESS-STATE BANK OF INDIA

All about State Bank of India:       * State Bank of India is the largest Indian banking and financial  services company by yearly turnover and total  assets. *The headquarters of SBI is in Mumbai , India. *SBI is a State owned Bank. Presidency Banks during British Raj: *Bank of Bengal  was established in 1806 in Kolkata. It was the first presidency bank of India. *Two other presidency bank was established, Bank of Bombay in 1840 and Bank of Madras in 1843. *These three banks were private shareholders’ bank. *East India Company also contributed to the share capital  of each of them. *The bulk of the share capital  had come from private shareholders mostly Europeans. *These banks were given monopoly of Govt. Banking- After 1823 *These three banks received the exclusive right to issue paper currency in 1861 with the Paper Currency Act Presidency Banks were amalgamated into the Imperial  Bank of India (IBI) which was established in 27 January 1921. After Independence: According to the parliamentary Act, State Bank of India Act (1955), Imperial  Bank of India (IBI) was acquired by the Reserve Bank of India.On 30 April  1955 RBI renamed Imperial  Bank of India (IBI) as State Bank of India. State Bank of India (Subsidiary Banks) Act passed in 1959.In 1959, eight banks were converted as associate banks of SBI 1.  State Bank of Bikaner 2.  State Bank of Jaipur 3.  State Bank of Hyderbad 4.  State Bank of Indore 5.  State Bank of Mysore 6.  State Bank of Saurashtra 7.  State Bank of Patoi la 8.  State Bank of Travancore             In 1963, State Bank of Bikaner and State Bank of Jaipur were merged to form State Bank of Bikaner and Jaipur (SBBJ).In 2008, State Bank of Saurashtra was merged wi th the Parent Bank- SBI In 2010, State Bank of Indore was merged with – SBI . **The total  number of Associate Banks of SBI currently working in India- Five (5) **State Bank of India has 137 foreign offices in 32 countries across the globe. **SBI has about 25,000 ATMs **SBI group(including associate banks) has about 45,000 ATMs. **SBI has 26,500 branches, including branches that belong to i ts associate banks. **25,000th ATM of SBI was inaugurated by the then Chairman of State Bank Shri  O.P.Bhatt on 31 March 2011, the day of his retirement. Slogans of SBI: 1.  With you all  the way 2.  Pure banking nothing else 3.  The Banker to every Indian 4.  The Nation banks on us

SCHEDULED BANKS IN INDIA

BANKING AWARENESS-SCHEDULED BANKS IN INDIA

Scheduled Banks – Scheduled Banks in India: Scheduled Banks in India are those banks which have been included in the Second Schedule of Reserve Bank of India (RBI) Act, 1934. Reserve Bank of India in turn includes only those banks in this schedule which satisfy the criteria mentioned on section 42 (6) (a) of the Reserve Bank of India Act 1934. Criteria for a Scheduled Banks: 1.Scheduled Banks are those banks whose minimum paid up capital  and reserve and amount to 25 lakh. 2.These bank have to submit details of their activities to the Reserve Bank of India every week. 3.These banks are listed on the second schedule of the Reserve Bank of  India Act 1934. There are three types of scheduled banks india ..these are listed below         1.Public sector scheduled banks in india         2.Private sector scheduled banks in india         3.Foreign scheduled banks in india Public Sector Scheduled Banks in India: The Public Sector Scheduled Banks in India consist of 19 Nationalised Banks, State Bank of India and It’s five (5) associates and IDBI. There are total  26 Public Sector Scheduled Banks in India. 1.  Allahabad Bank 2.  Andhra Bank 3.  Bank of Baroda 4.  Bank of India 5.  Bank of Maharashtra 6.  Canara Bank 7.  Central  Bank of India 8.  Corporation Bank 9.  Dena Bank 10.  Indian Bank 11.  Indian Overseas Bank 12.  Oriental  Bank of Commerce 13.  Punjab and Sindh Bank 14.  Punjab National  Bank 15.  Syndicate Bank 16.  UCO Bank 17.  Union Bank of India 18.  Uni ted Bank of India 19.  Vijaya Bank 20.  IDBI Bank 21.  State Bank of India 22.  State Bank of Bikaner & Jaipur 23.  State Bank of Hyderabad 24.  State Bank of Mysore 25.  State Bank of Patiala 26.  State Bank of Travancore Private Sector Scheduled Banks in India: The Private Sector Scheduled Banks in India are the Privately own banks which are listed under the second schedule of RBI Act 1934. Here is the l ist of Private Sector Scheduled Banks in India. 1.  Axis Bank Ltd 2.  Bank of Punjab Ltd 3.  Bank of Rajasthan 4.  Catholic Syrian Bank 5.  Centurion Bank Ltd 6.  City Union Bank 7.  Development Credit Bank 8.  Dhanlaxmi  Bank 9.  Federal  Bank Ltd 10.  HDFC Bank Ltd 11.  ICICI Banking Corporation Bank Ltd 12.  IndusInd Bank 13.  ING Vysya Bank 14.  Jammu & Kashmir Bank 15.  Nainital  Bank, estb. 1954 16.  Karnataka Bank 17.  Karur Vysya Bank 18.  Kotak Mahindra Bank 19.  Lakshmi  Vi las Bank 20.  Saraswat Bank 21.  South Indian Bank Ltd 22.  Tamilnad Mercantile Bank Limited 23.  Yes Bank Scheduled Foreign Banks in India: The  Foreign banks came in India only after the liberalisation in Indian banking sector in 1991. There are around 45 Scheduled Foreign Banks doing business in India. Foreign Banks have their registered and head office in a foreign country but operate their branches in India. The RBI permits these banks to operate either through branches or through wholly-owned subsidiaries. These are some Foreign Scheduled Bank in India: *American Express Bank Ltd. *ANZ Gridlays Bank Plc. *Bank of America NT & SA *Bank of Tokyo Ltd. *Banquc Nationale de Paris *Barclays Bank Plc *Citi  Bank N.C. *Deutsche Bank A.G. *Hongkong and Shanghai  Banking Corporation *Royal  Bank of Scotland *The Chase Manhattan Bank Ltd. *Dresdner Bank AG. *Standard charted bank.

BANKING AND FINANCIAL SYSTEM INDIA

BANKING AWARENESS-BANKING AND FINANCIAL SYSTEM IN INDIA

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

RESERVE BANK OF INDIA

BANKING AWARENESS-RESERVE BANK OF INDIA

ABOUT RESERVE BANK OF INDIA (RBI) – *Name of Central  Bank of India:  Reserve Bank of India (RBI) *No of Central  Bank in India:  One (1) *Reserve Bank of India Act passed in 1934. *Reserve Bank of India (RBI) established on 1 April  1935. *Reserve Bank of India (RBI) established  on the recommendation of Hilton-Young Commission. *Hilton-Young Commission submitted its report in the year 1926. *Initially RBI was constructed as a Private Share holders’ bank with fully paid-up capital  of Rs 5 Crores. *RBI was nationalize in the year of 1st January,1949. *RBI is a statutory body. *RBI is the sole authority in India to issue Bank notes in India. *RBI can issue currency notes as much as the country requires, provided it has to make a security deposit of Rs 200 crores, out of which Rs. 115 crores must be in gold and Rs. 85 crores must be FOREX Reserves. *Emblem of RBI:  Panther and Palm Tree. *Initially the headquarter of RBI was in Calcutta (Now Kolkata) but in 1937 it was permanently moved to Mumbai ,Maharastra. *The Reserve Bank of India has 19 regional  offices, most of them in state capitals and 9 Sub-offices The Executive head of RBI is known as Governor. *The governor is associated by Four Deputy Governors. *The bank has also two training colleges for its officers, viz. Reserve Bank Staff College at Chennai  and College of Agricultural  Banking at Pune. *RBI is a member bank of the Asian Clearing Union. *Chintaman Dwarkanath Deshmukh (C D Deshmukh) was the governor of RBI at the Time of nationalization of RBI in 1949.C D Deshmukh, then Governor of RBI, represented India at the Bretton Woods negotiations in 1944. *1st women Deputy Governor of RBI -K.J.Udeshi . *RBI is not a Commercial  Bank. *RBI prints currency in 15 Languages. *RBI is a member of IMF (International  Monetary Fund). CENTRAL BOARD OF RESERVE BANK OF INDIA: The  Reserve Bank’s  affairs  are  governed by  a  Central  Board  of  Directors. The  board  is  appointed by  the Government of India in keeping with the Reserve Bank of India (RBI) Act, 1934. Structure of Central Board of Directors:    Appointed/nominated for a period of FOUR years       Constitution:  Official Directors:                      Full -time :  One Governor and not more than four Deputy Governors.                            Non-Official Directors:                     Nominated  by Government:  Ten Directors  from  various  fields  and one government official (General ly from Ministry of Finance)                      Others:  Four Directors - one each from four local  boards. One each for the four regions of the country in Mumbai , Calcutta, Chennai  and New Delhi . The Function of Central Board of RBI: *The main function of Central  Board of RBI is General  superintendence and direction of the Bank’s affairs. The local  boards advises the Central  Board on local  matters and to represent territorial  and economic interests of local  cooperative and indigenous banks; to perform such other functions as delegated by Central  Board from time to time. Present Governor of RBI and Deputy Governor of RBI: The executive head of Reserve Bank of India is known as the Governor, the governor is assist by four deputy Governor. Governor:Newly Appointed Governor of Reserve Bank of India (RBI) is Raghuram Rajan who replaced Duvvuri Subbarao on September 4, 2013.Raghuram Rajan (New Appointment, Replaced D. Subbarao) Appointed on:  On 4 September 2013 List of Deputy Governor: 1.  Name:  Dr.K.C.Chakrabarty 2.  Name:  Uri ji t Patel  (New Appointment, Replaced Subir Gokarn.) 3.  Name:  Shri  Anand Sinha 4.  Name:  Shri  H.R.Khan Female Deputy Governors of Reserve Bank of India: K J Udeshi:  (10.06.2003 to 12.10.2005) K J Udeshi  becomes the first woman RBI deputy governor. K J Udeshi  has been appointed the deputy governor of the Reserve Bank of India (RBI). She is the first Woman deputy governor of the RBI. The appointment is till 12 October 2005 when she completes 62 years of age. Shyamala Gopinath: (21.09.2004 to 08.09.2009, 09.09.2009 to 20.06.2011) Shyamala Gopinath is the former deputy governor of the Reserve Bank of India (RBI). Gopinath served as deputy governor of Reserve Bank of India from September 21, 2004 to June 20, 2011. She was the second lady deputy governor of RBI. Smt Usha Thorat: (10.11.2005 to 09.11.2010) Usha Thorat served as Deputy Governor of the Reserve Bank of India (RBI) from November 10, 2005 to November 8, 2010. Prior to this she was the executive Di rector of the RBI. RBI Monetary Policy,RBI Functions and RBI Rates: Reserve Bank of India (RBI) is the central  banking institution of India. RBI control  the monetary pol icy Rupee as a sole control ler. RBI also controls the liquidity (flow of money) in Indian Market by Changing i ts Pol icy rates and Reserve ratios. RBI have three rates:  Bank Rate, CRR,SLR. Different RBI Rates: (As of October 7,2013)                          *Bank Rate (9%)                          *Cash Reserve Ratio (4%)                          *Statutory Liquidity Ratio (23%)                         * Base Rate                          *Marginal  Standing Facility ( MSF) – 9% What are Repo rate and Reverse Repo rate? Repo(Repurchase) rate is the rate at which the RBI lends shot-term money to the banks.When the reporate increases borrowing from RBI becomes more expensive. Therefore, we can say that in case, RBI wants to make it more expensive for the banks to borrow money, it increases the reporate; similarly, if it wants to make it cheaper for banks to borrow money, it reduces the reporate. Reverse Repo rate is the rate at which banks park their short-term excess liquidity with the RBI. The RBI uses this tool  when it feels there is too much money floating in the banking system. An increase in the reverse reporate means that the RBI will  borrow money from the banks at a higher rate of interest. As a result, banks would prefer to keep their money with the RBI. As of September 20, 2013:                   *Current Repo Rate: 7.50%                   *Current Reverse Repo Rate: 6.50% BANK RATE: What is Bank rate?  Bank Rate is the rate at which central  bank of the country, in India it is the Reserve Bank of India (RBI), allows financial liquidity to commercial /scheduled banks within the territory of India. RBI uses Bank Rate as a tool  for short-term measures. Any upward revision in Bank Rate is an indication that banks should also increase the deposit rates as well  as the Prime Lending Rate. Any revision in the Bank rate indicates more or less interest on your deposits and also an increase or decrease in your EMI. What is Bank Rate (Non Bankers Point of View) ? This is the rate at which RBI lends money to other banks or financial  institutions. If the bank rate goes up, long-term interest rates also tend to move up, and If the bank rate goes down, long-term interest rates also tend to move down. Thus, it can said that in case bank rate is hiked, in all  likelihood banks will  hikes their own lending rates to ensure and they continue to make a profit.                   *Present Bank Rate of RBI: 9.50% [As of September 20, 2013] CASH RESERVE RATIO: Every commercial /Scheduled bank in India has to keep certain minimum amount of cash reserves with Reserve Bank of India (RBI). Reserve Bank of India uses CRR as a tool  to increase or decrease the reserve requirement depending on whether RBI wants to increase or decrease in the money supply. RBI can vary Cash Reserve Ratio (CRR) rate between 3% and 15%. An increase in CRR will  make it mandatory for the banks to hold a large proportion of their deposits in the form of deposits with the RBI. This will  reduce the amount of Bank deposits and they will  lend less as they have less amount as their reserve. This will  in turn decrease the money supply. If RBI wants to increase Money supply it may reduce the rate of CRR and It will  allow the banks to keep large amount of their deposit with themselves and they will  lend more money. It will  increase the money supply. For example:  When someone deposits Rs.100 in a bank, it increase the deposit of banks by Rs100, and if the cash reserve ratio is 9%, the banks will  have to hold additional  Rs 9 with RBI and Bank will  be able to use only Rs 91 for investments and lending / credit purpose. Therefore, higher the ratio (i .e. CRR), the lower is the amount that banks will  be able to use for lending and investment. RBI uses CRR to control  liquidity in the banking system. The Reserve Bank of India (Amendment) Bi l l , 2006 has been enacted and has come into force with its gazette notification. Consequent upon amendment to sub-Section 42(1), the Reserve Bank, having regard to the needs of securing the monetary stability in the country, can prescribe Cash Reserve Ratio (CRR) for scheduled banks without any floor rate or ceiling rate. [Before the enactment of this amendment, in terms of Section 42(1) of the RBI Act, the Reserve Bank could prescribe CRR for scheduled banks between 3 per cent and 20 per cent of total  of their demand and time liabilities].                                *Present Cash Reserve Ratio (CRR) is 4% STATUTORY What is SLR? Apart from the Cash Reserve Ratio, scheduled banks in India are required to maintain, at the close of business every day, a minimum proportion of their Net Demand and Time Liabilities,liquid assets in the form of gold, cash and approved securities. The ratio of liquid assets to demand and time liabilities is known as Statutory Liquidity Ratio (SLR). Reserve Bank of India is empowered to increase Statutory Liquidity Ratio (SLR) up to 40%.  An  increase in SLR also reduces their (Bank’s) capacity to grant loans and advances, thus it is an anti -inflationary impact. What is SLR  (Non Bankers Point of View)? SLR stands for Statutory Liquidity Ratio. This term is used by bankers and indicates the minimum percentage of deposits that the bank has to maintain in form of gold, cash or other approved securities. Thus,  it is ratio of cash and some other approved to liabilities (deposits) It regulates the credit growth in India.           *Current SLR Rates: The present SLR is 23%. (reduced from earlier 24%). BASE RATE: What is Base Rate? Base Rate is the minimum rate below which Bank’s are not permitted to lend barring certain exceptions.  It is the minimum rate of interest that a bank is allowed to charge from its customers. Reserve Bank of India (RBI) rule stipulates that no bank can offer loans at a rate lower than the Base Rate to any of its customers. Base Rate replaced Bank Prime Lending Rate (BPLR) on July 1, 2010.           *Present Base Rate: 9.70% – 10.50% MARGINAL STANDING FACILITY or MSF – Rate: Marginal  Standing Facility (MSF) is the rate at which scheduled banks could borrow funds overnight from the Reserve Bank of India (RBI) against approved government securities.Banks can borrow funds through MSF during acute cash shortage (considerable shortfall  of liquidity). This measure has been introduced by RBI to regulate short-term asset liability mismatches more effectively.The Marginal Standing Facility (MSF) is pegged 100bps or 1 % above the Repo Rate.To provide greater liquidity cushion the Reserve Bank of India (RBI) introduced Marginal  Standing Facility or MSF. RBI announced the introduction of MSF on May 3, 2011 and i t was effected from May 9, 2011.Reserve Bank of India, in it’s annual  policy statement, has declared “The stance of monetary pol icy is, among other things, to manage liquidity to ensure that it remains broadly in balance, with neither a large surplus diluting monetary transmission nor a large deficit choking off fund flows.”Marginal Standing Facility Rate: Under this scheme, Banks will  be able to borrow upto 2% (wef 17/04/2012) of their respective Net Demand and Time Liabilities (NDTL).