WELCOME

STRUCTURE OF INDIAN

BANKING SYSTEM

Presented by:

Anoop .K. Iype

Anoop K. A

Eldho .J .Valiyaveeden

INTRODUCTION

Banking in India in the modern sense originated in the last decades of the 18th century. The first banks were Bank of Hindustan (1770-1829) and The General Bank of India, established 1786 and since defunct.

The largest bank, and the oldest still in existence, is the 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 three presidency 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. The three banks merged in 1921 to form the Imperial Bank of India, which, upon India's independence, became the State Bank of India in 1955. For many years the presidency banks acted as quasi-central banks, as did their successors, until the Reserve Bank of India was established in 1935.

In 1969 the Indian government nationalized all the major banks that it did not already own and these have remained under government ownership. They are run under a structure know as 'profit-making public sector undertaking' (PSU) and are allowed to compete and operate as commercial banks. The Indian banking sector is made up of four types of banks, as well as the PSUs and the state banks, they have been joined since the 1990s by new private commercial banks and a number of foreign banks.

Banking in India was generally fairly mature in terms of supply, product range and reach-even though reach in rural India and to the poor still remains a challenge. The government has developed initiatives to address this through the State Bank of India expanding its branch network and through the National Bank for Agriculture and Rural Development with things like microfinance.

INDIAN BANKING SYSTEM AT A GLANCE

RESERVE BANK OF INDIA Established in 1935 Apex body of Indian banking system Headquarters is in Mumbai India’s monetary authority Supervisor of financial system Issuer of currency Banker to bank Banker to government Maintains financial stability

SCHEDULED BANKSScheduled banks are those

banks whose name appears in the 2nd schedule of Reserve Bank Of India Act, 1934.

NON-SCHEDULED BANKSNon-scheduled banks are

those banks whose name doesn’t appear in the 2nd schedule of Reserve Bank Of India Act, 1934.

BANKS UNDER SCHEDULED BANKS

COMMERCIAL BANKSThey are the banks mainly deal

with commercial banking operations like acceptance of deposits and granting loans to the public. They are mainly classified into four:-

Scheduled banks

Commercial banks

Co-operative

banks

1. PUBLIC SECTOR BANKS Public sector banks are those banks

which are owned and controlled by the government . All the nationalized banks and regional rural banks are public sector banks.

Examples: State Bank of India and it’s 7 Subsidiaries. Bank Of Baroda Syndicate Bank Vijaya Bank Canara Bank etc.

2. PRIVATE SECTOR BANKSThese banks are owned and controlled by

private institutions or individuals and not by the government.

Examples: South Indian Bank ICICI HDFC Axis bank etc.

3. FOREIGN BANKSThese banks are formed and registered in

foreign countries and have their head office in foreign country.as far as India is concerned, any bank registered outside India and have a branch in India is a foreign bank.

Examples Yes Bank Citi Bank HSBC Deutsche Bank etc.

4. REGIONAL RURAL BANKS

Regional Rural Banks (RRBs) were established by Regional Rural Banks Act, 1976 with a view to satisfy the banking facilities and credit needs of the rural people.

Examples; Andhra Pradesh Grameena Vikas Bank, Chaitanya Godavari Grameena Bank, Kerala Grameen Bank etc.

B) CO-OPERATIVE BANKSThese are banks where co-operative societies that

are formed at a state or district level have a share of more than 51%. these are primarily set-up for the purpose of services the farming community or to aid in land or infrastructure development at the state or district level. They are of two:-

1. URBAN CO-OPERATIVE BANKS The term Urban Co-operative Banks (UCBs), though not formally defined, refers to primary cooperative banks located in urban and semi-urban areas. These banks, till 1996, were allowed to lend money only for non-agricultural purposes. This distinction does not hold today. These banks were traditionally centred around communities, localities work place groups. They essentially lent to small borrowers and businesses

examples:- Maharashtra state apex co-operative bank Karnataka state apex co-operative bank

2. STATE CO-OPERATIVE BANKS State co-operative banks are the apex co-operative institution in a state . They are federations of district co-operative banks, and they monitor the activities of all co-operative banks in the state.

Examples:- Kerala state co-operative bank Orissa state co-operative bank x West Bengal state co-operative bank

3. National bank for agriculture and rural development (NABARD) National bank for agriculture and rural development (NABARD) was established as an apex bank that provides finance for agriculture and rural development.