Post on 06-Apr-2018
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BANKING SERVICE SECTOR
Ravindra -01
Faizan -02
Rasika -03
Udya- 04
Mahesh -06
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INTRODUCTION OF A BANK
The Banking Companies Act of 1949, define
Banking Company as a company which transacts the business of banking
in India. It defines banking as, accepting for the purpose of lending orinvestment of deposit money from the public, repayable on demand or
otherwise and withdraw able by cheque draft , order or otherwise
A bank as an institution dealing in money and credit. It safeguard of the
savings of the public and gives loans and advances.
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ORIGIN OF BANKING
The word of Bank is said to be of Germanic origin , cognate with the French wordBanque and theItalian word Banca , both meaning bench.
Banking is as old as the authentic history and origins of modern Commercial
banking tare traceable to ancient times. The New Testament mention aboutactivities of the money changers in the temple of Jerusalem. In ancient Greecearound 2000 B.C . The famous temples of Ephesus, Delphi and Olympia were usedas depositories for peoples surplus funds and these temples were the centers ofMoney lending transaction.
In, India the ancient Hindu scriptures refer to money lending activities in the Vedicperiod. In India The Ramayana and Mahabharata eras, banking had become a fullfledged activity and during the Smriti period which followed the Vedic period andEpic age the business of banking was carried on by the members of the Vanishcommunity.
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PRE INDEPENDENCE BANKING SYSTEM OF
INDIA
Banking in India originated in the last decades of the 18th century. The firstbanks were The General Bank of India which started in 1786, and the Bank ofHindustan, both of which are now defunct. The oldest bank in existence in India isthe State Bank of India, which originated in the Bank of Calcutta in June 1806,which almost immediately became the Bank of Bengal . This was one of the threepresidency banks, the other two being the Bank of Bombay and the Bank of Madras,all three of which were established under charters from the British East India
Company.
Indian merchants in Calcutta established the Union Bank in 1839, but it failed in1848 as consequence of the economic crisis of 1848-49. The Allahabad Bank,established in 1865 and still functioning today, is the oldest Joint Stock bank inIndia.
The presidency banks dominated banking in India but there were also some
exchange banks and a number of Indian joint stock banks. All these banks operatedin different segments of the economy. The exchange banks, mostly owned byEuropeans, concentrated on financing foreign trade. Indian joint stock banks weregenerally under capitalized and lacked the experience and maturity to compete withthe presidency and exchange banks.The first entirely Indian joint stock bank was theOudh Commercial Bank, established in 1881 in Faizabad. It failed in 1958. The nextwas the Punjab National Bank, established in Lahore in 1895, which has survived tothe present and is now one of the largest banks in India.
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POST INDEPENDENCE BANKING SYSTEM OF INDIA
In the post-independence period, India observed the emergence of large numberof institutions for providing finance to different sectors of the economy.
There were two nationalizations of banks in India, one in 1969 and the other in1980. The entry activities of private sector and foreign banks were restricted
through branch licensing and regulation norms.
The over regulated and over administered polices eroded the capital base of mostof the public Sector banks and recapitalization of 19 nationalized banks wasmade by government through of budgetary provision Nevertheless, acute problemarises in productivity, efficiency and profitability front of the commercial banks.
The policy of directed investment in the form high SLR and CRR, directed creditprograms, extra administrative interference in credit decision making, highoperating costs, regulated interest rates, non-transparent accounting systemcoupled Non existence of operational flexibility, internal autonomy and absenceof competition contaminated the health of the commercial banks and threatenedtheir future survival.
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NATIONALIZATION OF INDIAN BANKING SYSTEM
Indian marched towards the establishment of public sector banking through The progressive nationalisationof commercial banks. There were three phases of bank nationalisation:
Nationalization of Imperial Bank of India in1955 and its seven associate banks in 1959-60.
Nationalizations of the 14 major commercial banks in 1969.
Nationalization of 6 more commercial banks in 1980.
On July 1, 1955 the government of India nationalized the Imperial Bank of India and converted it into theState Bank of India. The establishment of the State Bank of India was a pioneering attempt in public
introducing sector banking in the country. Later on in 1959-60, seven subsidiary State Banks were also
nationalized to form the SBI Group.
For a short period during December 1967 to June 1969, the Government of India pursued the banking of
policy control of banks, aiming at an equitable and purposeful distribution of credit towards developmental
needs.
A such over 90 percent of the banking activity in the country is brought under into the public sector.
In short, nationalization of banks implied a bold and major economic step in the process of banking
reforms in the country. It has resulted in the evolution of public sector banking.
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TYPES OF BANKS
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1. Central Bank
2. Commercial Banks
Types of Commercial Banks:
a. Public Sector Banks
E.g.
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b. Private Sectors Banks
E.g.
c. Foreign Banks
E.g.
3. Development BanksE.g. Industrial Finance Corporation of India (IFCI),
State Financial Corporations (SFCs)
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4. Co-operative Banks
Types of Co-operative Banks:
a. Primary Credit Societies
b. Central Co-operative Banks
c. State Co-operative Banks
5. Specialized Banks
E.g.
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7 PS OF BANKING SECTOR
Important to provide quality service to customer
Product
Price
Place
Promotion
People
Process
Physical evidence
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PRODUCT
Bundle of utilities
Bank service not only things but alsosatisfaction they deliverE.g. bank account
bank products
DEPOSITS: Savings, current, fixed etc.
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ADVANCES:
(a) Fund Oriented:
Term loan Clean loan
Bill discounting
Advancing
Pre-shipment and post-shipment finance
Secured and unsecured lines of credit.
(b) Non-Fund Oriented: Guarantees
Letter of credit.
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International Banking:
Letter of credit
Foreign currency
Consultancy:
Investment counselling
Project counselling
Merchant banking
Tax consultancy
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Miscellaneous:
Traveller cheques
Credit cards
Remittances
Collections Sale of drafts
Standing instructions and
Trusteeship.
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PRODUCT LEVEL
Core
Product
Basic
Product
Expected
Product
Augmented
Product
Potential Product
The basic
necessity to
use banking
services in
order to
handle
finance
more
efficiently
Safety of
deposits
Timely
service
Goods
waiting
rooms
Mobile and
internet Banking
Loanable
funds etc.
Long
bankinghours
Extensive
ATMnetwork
New Schemes
tailored forspecific
customers
Low interest
rates
Promotional
Discounts
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PRICE
Interest rate
compete in terms of annual fees for services
like credit cards, DMAT
etc banks pricing policy today is the interest
charged on the Home Loans and Car Loans
ATM Card Issue Free 2 ATM cards issued free if it joint
account
Add on Card RS. 100 Beyond 2 cards
Duplicate Card Rs. 100
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PLACE
The Trade area
Population characteristics
Commercial structure Industrial structure
Banking structure
Proximity to other convenient outlets
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Real estate rates
Proximity to public
Transportation
Drawing time
Location of competition
Visibility Access
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PROMOTION
Internet Banking
Mobile Banking
Public Relations Personal Selling
Sales Promotion
Word of mouth Promotion Telemarketing
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PROCESS
process mix constitutes the overall procedure
customer friendly
process for application for a car loan at HDFC
bank.
Now this mainly involves 3 things.
Producing of proper documents Filling up of application form
Paying for the initial down payment.
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PHYSICAL EVIDENCE
Physical evidence is the overall layout of the
place
Design placement
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PEOPLE
People are the employees that are the service
providers
Important role in providing customersatisfaction and good services
Employee must understand what customer
needs
Employee attitude, appearance, behaviour
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DIMENSIONS OF SERVICE QUALITY
Reliability: Perform promised service dependablyand accurately. E.g. Receive mail at same time eachday.
Responsiveness : Willingness to help customerpromptly. E.g. = avoid keeping customers waiting forno apparent reason.
Assurance = Ability to convey trust & confidence.E.g.= Being polite showing response for customers.
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Empathy : Ability to be approachable.
E.g. = Being a good listener.
Tangibles : Physical facilities & facilitating
goods.
E.g. : Cleanliness.
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TECHNOLOGIES & INNOVATIONS IN
BANKING
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ELECTRONIC BANKING
1) Automated Teller Machines (ATMs)
Eliminated the time limits of customer
service
Offer a host of banking services
including deposits, withdrawals,
requisitions, instructions & transactions It is issued to Current and Saving account
holders of a bank who hold a certain
minimum balance
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2) Internet Banking
The delivery channels include dial-up
connection, private network, public
network etc
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3) Mobile Banking
Through inter banking one can
visit the web site of each bank by
entering his password and can
even pass his own credit and debit
entries
Customers can now make balance
enquires, download statements and
open fixed deposits over the net
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5) Electromagnetic Cards
I. Charge Cards
II. Debit Cards
III. Credit Cards
IV. Smart Card
V. Member card
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APPRECIATE YOUR PATIENCE!