SBI is one of the big four banks of India, along with ICICI bank, Punjab National Bank and

Bank of Baroda
SBI had 14,816 branches in India as on 31 March 2013
SBI is the first bank to open branch in China
15000th branch of the State Bank of India (SBI) at Sooranam (Tamil Nadu)
SBI has 21, 500 branches (including Assosiate Banks )
SBI has 99, 345 offices in India
SBI has 27000+ ATM and SBI Group (including Assosiate Banks ) has 32752 ATMs.
On October 7, 2013, Arundhati Bhattacharya became the first woman to be appointed Chairperson of the bank

Study about Fund Transfer Systems here

First bank established in India: Bank of Hindustan in 1770
Second bank: General Bank of India, 1786
Oldest bank in India originated in the Bank of Calcutta in June 1806 which was still in existence State Bank
of India
State Bank of India merged with three banks namely Bank of Bengal, Bank of Bombay and Bank of Madras in
1921 to form the Imperial bank of India which was converted as State Bank of India
First Indian bank got ISO: Canara Bank
First India bank started solely with Indian capital investment is PNB (Punjab National Bank)
Founder of Punjab National Bank is Lala Lajpat Rai
Reserve bank of India (RBI) was instituted in 1935
First governor of RBI: Mr.Osborne Smith
First Indian Governor of RBI: Mr. C D Deshmukh
First bank to introduce savings account in India: Presidency Bank in 1833
First bank to introduce cheque system in India: Bengal Bank in 1833

Study about Banks in India here

First bank to introduce internet banking: ICICI bank

First bank to introduce mutual fund: State Bank of India
First bank to introduce credit card in India: Central Bank of India
Which cards are known as plastic money Credit Cards.
Open market operations are carried out by RBI
Capital market regulator is SEBI
Largest Commercial bank in India State Bank of India
The International Bank for Reconstruction and Development (IBRD) is known as World Bank
Indias First Financial Archive has been set up at Kolkata
CRR, SLR, Repo Rate, Reverse Repo rate are decide by RBI
Savings banks interest rates, fixed deposit interest rates, Loan Rates etc. are decided by individual banks
The bank which has launched Mobile Bank Accounts in association with Vodafones m paisa HDFC Bank
Minimum money transfer limit through RTGS: 2 Lakhs
Maximum money transfer limit through RTGS: No Limit
Minimum & Maximum money transfer limit through NEFT: No Limit
NABARD was established in July, 1982
Largest Public sector bank in India SBI
Largest Private sector bank in India ICICI Bank
Largest Foreign bank in India Standard Chartered Bank
First Indian bank to open branch outside India i.e. London in 1946: Bank of India
First RRB named Prathama Grameen Bank was started by: Syndicate Bank

Study about Financial and Banking sector reforms in India here

First Bank to introduce ATM in India: HSBC in1987, Mumbai
Bank of Baroda has the maximum number of overseas branches
SBI holds the second position with maximum number of overseas branches

Premium credit cards exclusively for women launched recently by HDFC bank
Private Sector Bank that recently launched a product of Personal loan called SWIFT HDFC
The bank which approved loan of $500mn to help India improve Rail services Asian Development Bank
FDI limit for new banks 49%
FDI limit for private banks: 74%

Some Basic Economic Terms

Interest Rate Swaps: An interest rate swap is the transfer of contractually agreed between two counterparties
of their respective interest rate obligation. Interest rate swaps are commonly used as a means of converting
fixed rate to floating rate debt and vice versa.

Operating Ratio: A ratio that shows the efficiency of a companys management by comparing
operating expense to net sales. Calculated as
Operation ratio = Operating expense/net sales
Wholesale Price Index (WPI): WPI is taken into consideration while calculating the inflation. A change has
recently been made in the WPI. Its present base year will be taken as 2004-05 earlier it was 1993-34. Base year
mean (2004-05 = 100). Total articles taken into consideration will be 676 earlier these were 435.676 include
102 Primary Articles, 19 fuel & power, and 555 of Manufacturing Products. Earlier WPI was calculated on
Weekly basis but now it is calculated on Monthly Basis. First time inflation was calculated in August 2010 (on
new system).
Consumer Price Index (CPI) : Most advanced nations base their policies on retail price inflation but India
uses wholesale price inflation, CPI is largely a segmental and is superior to the WPI, CPI capture consumption
price both at urban and rural centers, as in WPI 676 items are covered and base year is taken as 2004-05 and
for macroeconomic policies. Whereas in CPI 320 items are taken from (CPI-IW) CPI industrial workers and
260 items are taken from both CPR rural laborers and CPI agricultural laborers and the base year for
calculation is taken as 2010.
Coupon Rate: Specified interest rate on a fixed maturity security fixed at the time of issue. The coupon rate of
a bond is the amount of interest paid per year as a percentage of the face value or principal.
NRO (Non Resident Ordinary a/c) : In this account , a person cannot repatriate income without RBI
approval but can remit Interest thereof.
NRNR (Non Resident Non Repatriable A/c ) : Under this account Principal amount in not permissible to
repartriate but interest can be.
NRE (Non Resident External) : In this account Funds and interest both can be remitted without RBI
permission. On NRE deposits the maximum ceiling is Libor rate + 175 basis points (Now there is no such
Ceiling).
NPA (Non Performing Assets) : Interest or Installment of Principal remains overdue for a period of more than
90 days in respect of a Term Loan/ overdraft/ Cash credit.
Teaser Rate of Interest : This rate is typical low then the prevalent rate in the market. This is just to allure the
customer. This rate is charged only for a little time. And after that it gradually touch the index rate or even
more than that. This is a technique to attract customers.

Appropriation Bill : It is presented to parliament for its approval, so that the government can withdraw from
the Consolidated fund the amounts required for meeting the expenditure charged on the Consolidated Fund. No
amount can be withdrawn from the Consolidated Fund till the Appropriation Bill is voted is enacted.
Call Money: Itner Bank call market is a part of the domestic money market from where banks borrowed and
lent for one day called as Money at call and for a period more than 1day & upto 14days is called Short notice
or Notice money without any collateral security. Money lend for 15days or more is called Term
money.Normally funds are borrowed for 1 day and upto 3 days on weekends just to balance the Cash Reserve
Ratio.
Nostro Account: When national bank is opened in foreign with currency is known as Nostro a/c. e.g. State
bank india branch in USA.
CIBIL {Credit Information Bureau (India) Limited} : An effective mechanism for exchange of information
between banks and Financial Institutions for curbing the growth of NPAs.
Currency War: This is the other form of Protectionism. In this the tendency of every nation is that the value
of their currency should not appreciate. The big example of this is CHINA that is holding their currency since
2008. It could be a cause of future Trade war.
Capital Budget: It consists of capital receipts and payments. It also incorporates transactions in the Public
Account. It has two components Capital Receipts and Capital Expenditure.
E-Banking
E- banking refers to electronic banking. It is like e-business in banking industry. E-banking is also called
as virtual banking or online banking. E-banking is a Result of the growing expectations of bank customers. Ebanking involves information technology based banking. Under this IT system the banking services are
delivered by way of a computer-controlled system. This system involves direct interface with the customers.
The customers need not to visit bank premises
Popular services covered under E-banking
1. Automated teller machine
2. Credit card
3. Debit card
4. Smart card
5. Electronic funds Transfer system
6. Cheque truncation system
7. Mobile banking

8. Internet banking
9. Telephone banking
Automated teller machine
ATM is designed to perform the most important function of bank. it is operated plastic card with its
special features. The plastic card has replaced cheque Personal attendance of the customer banking hours
restrictions and paper based verification. These are debit cards. An ATM is an electronic funds Transfer
terminal capable of handling cash deposits Transfer between accounts balance enquires, cash withdrawals and
pay bills. It may be online or Offline. Any customer processing ATM card issued by the shared payment
network system can go to any ATM linked to shared payment networks and perform his transactions
Credit card/ Debit card
The Credit card holder is empowered to spend wherever and whenever he wants with his Credit card
within the limits fixed by his bank. Credit card is a post paid card. Debit card considered as a prepaid card with
usage facility limited to the balance in the linked deposit account of the cardholder. An individual has to open
an account with the issuing bank which gives debit card with a Personal identification number. When he makes
purchases he enters his pin on shops pin pad. When the card is slurped through the electronic terminal it dials
the acquiring bank system -either master card or VISA that validates the pin and finds out can never overspend
because the system rejects any transactions which exceeds the balance in his account. The bank never faces a
default because the amount spent is debited immediately from the customers account.
Smart card
Banks are adding chips to their current magnetic stripe cards in order to enhance security and offer new
services that are called smart cards. Smart cards allow
Thousands of times of information storable on magnetic stripe cards. In addition these cards are highly secure,
more reliable and perform multiple functions. They hold a large amount of Personal information ranging from
medical and health history to Personal banking and personal preferences.
Services of E-banking
E-banking provides a multitude of services that are as follows
1. Bill payment service
E-banking facilitates the payment of electricity bills, telephone bills, Credit card, and insurance
premium bills. And the bank does not charge customers for online payments

2. Fund Transfer
You can Transfer any amount from one account to another of the same or any another bank.
Customers can send money anywhere in India.
3. Credit card customers
With internet banking customers cannot only pay their credit card bills online but also get a loan on
their cards. In case of loss of the credit card an online reporting can be done.
4. Investing through internet banking
Now, FD can be opened on line through funds Transfer and investors with interlinked demit account
and bank account can easily trade in the stock market.
5. Recharging prepaid mobile
By just selecting the operator name entering the mobile number and the amount of Recharge the
mobile phones can be back in action within few minutes.
6. RTGS fund Transfer
RTGS is an inter Bank funds Transfer system. Where are Transferred as end when the transactions are
tiggered.
7. Shopping
Online Shopping can also be done with a range of all kind of products. Railway and air tickets can be
bought through the internet banking.
8. Online payment of taxes.
A customer can pay various taxes on line including excise and service tax direct tax etc.
Electronic funds Transfer
Electronic funds Transfer provides for electronic payments and collections. EFT is safe secure,
efficient and less expensive than paper check payments and collections . RBI EFT is a scheme introduced by
RBI to help banks offering their customers money Transfer service from account to account to any branch to
any other bank branch in places where services are offered.
Internet banking
Through internet banking you can check your transactions at any time of the day and as many times as
you want to. Where as in a traditional method you get quarterly statements from the bank. If the fund Transfer
has to be demand outstation where the bank does not have a branch the bank would demand outstation charges.
Whereas with the help of online banking.
Mobile banking transactions

Now banks have started offering mobile banking and telemarking to their customers. The expansion in
the use and geographical reach of mobile phones has created new opportunities for banks to use this mode for
banking transactions and also provide an opportunity to expand banking facilities to the excluded sections of
the society.
Introduction
India has had more than a decade of Financial sector reforms during which there has been substantial
Transformation and liberalization of the whole Financial system
Objectives of Financial sector reforms in India.
1. Reforms Financial repression that existed earlier
2. Create an efficient productive and profitable Financial sector industry
3. Enable price discovery particularly by the market determination of interest rates that then helps in efficient
allocation of resources
4. Provide operational and function autonomy to institutions
5. Prepare the Financial system for increasing international Competition
6. Open the external sector in a calibrated fashion
Narasimham committee report 1991 &1998
The narasimham committee was set up in order to study the problems of the indian Financial system and to
suggest some recommendations for improvement in the efficiency and productivity of the Financial institution
The committee had given the following major recommendations:
1. Reduction in SLR and CRR : The committee recommeded the Reduction of the higher proportion of the
statutory liquidity ratio and cash reserve ratio . Both of these ratios were very high at that time. The SLR the
was 38.5 percent and crr was 15 percent . This high percentage of SLR and CRR meant locking the bank
resources for govt uses. SLR was recommeded to be from 38.5 to 25 percent and CRR from 15 percent and 3.5
percent
2. Phasing out of directed Credit programme : in india since Nationalization directed Credit programmes
were adopted by the Government . The committee recommed Phasing out of this programme. This programme
compelled banks to earmark their Financial resources for the needy and poor sectors at concessional rates of
interest
3. Interest rate determintaion: The committee felt that the interest rates in india were regulated and
controlled by the authorities . The committee recommeded eliminating Government controls on interest rates
and Phasing out the concessional interest rates for the priority sector.

4. Structural re organizations of the banking sector: The committee recommeded that the actual number of
public sector banks need to be reduced. Three to four large banks including SBI should be developed as
international banks. Eight to ten banks having nationwide presence should concerntrate in the National and
unverisal banking services.
Local banks should concerntrate on region specific banking . Regarding RRBs it recommeded that they should
focus on agr culture and rural financing
5. Establishment of the ARF and tribunal: The proporation of bad debts and non performing assets of the
public banks and Development Financial institute was veey alarming in those days. The committee
recommeded the Establishment of an assets reconstruction fund . This fund would take over the proporation of
the bad and doubt ful debts from the banks and Financial institutes. It would help banks to get rid of bed debts.
6. Removal of dual control : The committee recommeded the stopping of this system. it considered and
recommeded that the RBI should be the only main agency to regulate banking in india
7. Banking autonomy : The committee recommeded that the public sector banks should be free and
autonomous. Banking technology upgradation would thus be easy.
Narasimham committee report II 1998
In 1998 the Government appointed yet another committee under the chairmanship of Mrt.Narasimham. It
better known as the banking sector committee. It was told to review the banking reform progress and design a
programme for further strengthening the Financial system of india the committee focused on various areas
such as capital adequacy bank mergers bank legislation,
It submitted its report to the Government in April 1998 with the following recommendations:
1. Strengthening the banks in india
2. Narrow banking
3. Capital adequacy ratio
4. Bank owership
5. Review of banking laws
Apart from these major recommendations the committee has also recommended faster computerization ,
technology upgradation , training of staff, depoliticizing of banks, professionalism in banking , reviewing bank
recruitment etc.

List of Banks in India

Banks are of three types
(1) Public Sector Banks
(2) Private Sector Banks
(3) Foreign Banks
Under Public sector banks
(1) Nationalized Banks
(2) State Bank of India and their subsidiaries
(3) Regional Rural Banks
Important Details about Nationalized Banks in India

Sl.NO

Name of the Bank

Chairman

Year of
Head Office Commenceme
nt

Allahabad Bank

Shubhalakshmi
Panse

Kolkata

1865

Andhra Bank

B.A. Prabhakara

Hyderabad

20th November,
1923

Bank of Baroda

S.S. Mundra

Baroda
(Vadodara)

20th July, 1908

Bank of India

V R Iyer

Mumbai

7th September,
1906

Bank of Maharashtra Narendra Singh

Pune

1935

Canara Bank

Bangalore

1906

Rajiv Kishore
Dubey

Central Bank of India Shri. Rajeev Rishi Mumbai

21 December,
1911

Corporation Bank

Shri S.R. Bansal

Mangalore

1906

Indian Bank

T.M. Bhasin

Chennai

1907

10

Indian Overseas Bank Shri M. Narendra Chennai

February 10th,
1937

11

Oriental Bank of
Commerce

New Delhi

February 19th,
1943

12

Punjab National Bank Shri K.R Kamath

New Delhi

1895

13

Punjab & Sind Bank

SH. Devinder
Singh

New Delhi

1908

14

Syndicate Bank

Shri Sudhir Kumar

Mani pal
Jain

1925

15

UCO Bank

Shri Arun Kaul

Mumbai

6th January,
1943

16

Union Bank of India

Shri D. Sarkar

Kolkata

11th November,
1919

17

United Bank of India

Ms. Archana
Bhargava

Kolkata

1950

18

Vijaya Bank

Shri. H.S. Upendra

Bangalore
Kamath

1931

19

IDBI bank

Mr. M.S.
Raghavan

Mumbai

July, 1964

20

Dena Bank

Shri. Ashwani
Kumar

Mumbai

1938

21

ECGC

Shri N Shankar

Mumbai

30th July, 1957

Shri S.L. Bansal

Important Details about State Bank of India and their Subsidiaries

State Bank of India has 5 associate banks State Bank of Bikaner & Jaipur, State Bank of
Hyderabad, State Bank of Mysore, State Bank of Patiala and State Bank of Travancore. State
Bank of Saurashtra and State Bank of Indore are merged into SBI. On October 7th, 2013
Arundhati Bhatacharya is appointed as the first lady chairperson for SBI.

Year of
Commenceme
nt

Sl.NO

Name of the
Bank

Chairman

State Bank of India

Arundhati
Mumbai
Bhattacharya

1st July, 1955

State Bank of
Hyderabad

Pratip
Chaudhuri

Hyderabad

8th August,
1941

State Bank of
Mysore

Pratip
Chaudhuri

Bangalore

2nd October,
1913

State Bank of
Patiala

Pratip
Chaudhuri

Patiala

1st April, 1960

State Bank of
Bikaner & Jaipur

Pratip
Chaudhuri

Jaipur

1963

State Bank of
Travancore

Pratip
Chaudhuri

Thiruvananthapura 12th
m
September,

Head Office

1945
7

State Bank of
Saurashtra

Merged into SBI on 13th August, 2013

State Bank of
Indore

Merged into SBI on 2010

NABARD is an apex development bank in India established on 12 July, 1982 with an aim of providing
services to rural India by increasing the credit flow for evaluation of agriculture & rural non form sectors.
It was set up by the Reserve Bank of India (RBI) under the chairmanship of Shri B. Sivaraman.
NABARD is a development bank for providing and regulating credit and other facilities for the promotion and
development of cottages, small scale industries, development of agriculture, village industries, handicrafts and
other rural crafts
With a view of promoting rural development and securing rural areas, NABARD is entrusted with
1.

Providing refinance to lending institutions in rural areas

2.

Bringing about or promoting institutional development and

3.

Evaluating, monitoring and inspecting the client banks

RBI sold its stake in NABARD to the Government of India, which now holds 99% STAKE. NABARD is
active in developing financial inclusion policy.

Study More Banking Awareness Materials here

Important Points about NABARD
Head Quarters: Mumbai
Established on: 12 July, 1982
Chairman: Dr. Harsh kumar Bhanwala
NABARD completed its 25 years on 12 July, 2007
NABARD is active in developing Financial Inclusion

It is Indias specialized bank developed by Shivaramans committee to provide credit in rural areas. It 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).
NABARD undertakes the monitoring and evolution of projects will be refinanced by it
It provides training for the institutions working for the rural development.
NABARD keeps a check on client institutions
It regulates the cooperative banks and RRBs
It takes measures for improving credit delivery system, monitoring, schemes credit institutions, and training of
personnel
Helps the state governments in reaching their targets of providing assistance to eligible institutions in
agriculture and rural development
BANKING OMBUDSMAN
Banking Ombudsman is a quasi judicial authority functioning under Banking Ombudsman Scheme 2006.It
provides independent, expeditious and inexpensive forum to aggrieved/Un-satisfied Bank customers. RBI
introduced this Scheme under powers granted U/s 35-A of Banking Regulation Act.
Complaints are accepted only if they ar e made within one year after the complaint has received the

reply from bank.

Types of Complaints :
1.

Non-payment or inordinate delay in the payment or collection of cheques, drafts ,bills etc.

2.
Non-acceptance, without sufficient cause, of coins tendered and for charging of commission for this
service.
3.
Non-acceptance without sufficient cause of small denomination notes tendered for any purpose and for
charging of commission for the service.
4.

Failure to issue or delay in issue, of drafts pay orders or bankers cheque.

5.

Non-adherence to prescribed working hours.

6.

No payment or delay in payment of inward remittances.

7.

Failure to honor guarantee or letter of credit commitments.

8.
Failure to provide or delay in providing a banking facility promised in writing by a bank or its direct
selling agents.
9.
Delays, non-credit of proceeds to partiesaccounts, non-payment of deposit or non-observance of the
Reserve Bank directives, if any applicable to rate of interest on deposits in any savings, current or other
account maintained with a bank.
10. Delays in receipts of export proceeds, handling of export bills, collection of bills etc. for exporters
provided the said complaints pertain to the Banks operations in India.
11. Refusal to open deposit accounts without any valid reason for refusal.
12. Levying of charges without adequate prior notice to the customers.
13. Non-adherence by the bank or its subsidiaries to the instructions of Reserve Bank on ATM/debit card
operations or credit card operations.
14. Non-disbursement or delay in disbursement of pension to the extent the grievance can be attributed to the
action on the part of the Bank concerned but not with regard to its employees.
15. Refusal to accept or delay in accepting payment towards taxes, as required by Reserve Bank/Government.
16. Customers should have complained to the concerned Bank first and wait for one month. Complaint to
Ombudsman can be writing or in electronic mode.

Award :
Ombudsman can give maximum award upto Rs.10 Lacs.
Appeal :
Any party can file appeal within 30 days on receiving appeal award or the Ombudsman rejecting his complaint
to Appellate authority. If the appeal is the bank, it should be made with approval of CMD or ED or CEO only.

Financial Inclusion
Financial inclusion or inclusive Financing is the delivery of financial service at affordable costs to
sections of disadvantaged and low income segments of society. Or we can say that financial inclusion may be
defined as the process of ensuring access to Financial inclusion in timely and adequate Credit when needed by
vulnerable groups such as weaker sections and low income groups at an affordable cost.
Unrestrained access to public goods and services is the sine qua of an open and efficient society. It is argued
that as banking services are in the nature of public good it is essential that availability of banking services and
payment services to the nature of public good it is essential that availability of banking and payment services
to the entire population without discrimination should be the prime objective of public policy. the term
Financial inclusion has gained importance since the early 2000s and is a Result of findings about Financial
inclusion and it direct correlation to poverty. Financial inclusion is now a common objective for many central
banks among the Developing nations

Worried about SBI Clerk Exam this product is

recommended for you

Financial inclusion offers people the following things

1. Access to Financial markets
2. Access to Credit markets
3. Financial literacy
Objectives of Financial inclusion
1. Access at a reasonable cost for all house holds and enterprises to the range of Financial services for which
they bankable including savings , short and long term credit , leasing and factoring , mortgages , insurance ,
pensions, payment , local money Transfers and international remittances.
2. Sound institutions guided by appropriate internal management systems, industry performance standards and
performance monitoring by the market as well as sound prudential regulation wherever required.
3. Financial and institutional sustainability as a means of providing access to Financial services over time.
4. Multiple provides of Financial services wherever feasible so as to bring cost effective and a wide variety of
alternatives to customers
Financially excluded sections largely comprise of the following activities.
1. Marginal farmers
2. Landless laborers
3. Oral lessees
4. Self Employed and unorganized sector enterprises
5. Urban slum dwellers
6. Migrants

7. Ethnic minorities and society excluded groups

8. Senior citizens
9. Women
The north east eastern and central regions of India contain most of the Financially excluded population.
Benefits of inclusive financial growth
The benefits of inclusive financial growth can be described
1. Growth with equity:- In the path of becoming super power we the Indians need to achieve the growth of
our country with equality. It is provided by inclusive finance.
2. Getting rid of poverty:- To remove poverty from the Indian context everybody will have to be given access
to formal Financial services . Because if they borrow loans for business or Education or any other purpose then
that will pave the way for their Development.
3. Financial transactions made easy:- Inclusive finance will provide banking related Financial transactions
in an easy and speedy way.
4. Safe savings along with Financial services:- People will have safe savings along with other allied services
like insurance cover, entrepreneurial loans payment and settlement facility etc.
5. Increasing National income:- boosting business opportunities will definitely increase GDP that will be
reflected in our National income growth.
6. Becoming global player:- Financial access will attract global market players to our country that would
Result in increased Employment and business oppurtunities.