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EVOLUTION OF BANKING
BACHELOR OF COMMERCE
SEMESTER-V
YEAR 2017-2018
UNIVERSITY OF MUMBAI
SUBMITTED BY:
AASHISH RUPREJA
T.Y.B.C.B.I.
MANSUKHANI COLLEGE
ULHASNAGAR-421003
SMT.CHANDIBAI HIMATHMAL
MANSUKHANI COLLEGE
ULHASNAGAR – 421 003
CERTIFICATE
(PROJECT GUIDE)
SIGNATURE
AASHISH RUPREJA
ROLL NO. 54
T.Y.B.C.B.I.
Date -
FOR BANK
Branch Manager
ACKNOWLEDGEMENT
existence.
old times.
banks in past
in past
Research Methodology
Definition
As per Section 5(b) of the Banking Regulation Act, 1949,
"banking" means the accepting, for the purpose of lending or investment,
of deposits of money from the public, repayable on demand or otherwise,
and withdraw able by cheque, draft, order or otherwise
Basic Concepts Used In Banking:
Banking
Banking has been defined as "Accepting for the purpose of lending and
investment, of deposits of money from public, repayable on demand,
order or otherwise and withdrawable by cheque, draft or otherwise."
Banker
Customer
Banking Company
• To set equal norms and conditions (i.e. rate of interest, period of lending
etc. to all types of customers.
History of Indian Banking System
The first bank in India, called The General Bank of India was
established in the year 1786. The East India Company established The
Bank of Bengal/Calcutta (1809), Bank of Bombay (1840) and Bank of
Madras (1843). The next bank was Bank of Hindustan which was
established in 1870. These three individual units (Bank of Calcutta, Bank
of Bombay, and Bank of Madras) were called as Presidency Banks.
Allahabad Bank which was established in 1865, was for the first time
completely run by Indians. Punjab National Bank Ltd. was set up in 1894
with head quarters at Lahore. Between 1906 and 1913, Bank of India,
Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank, and
Bank of Mysore were set up. In 1921, all presidency banks were
amalgamated to form the Imperial Bank of India which was run by
European Shareholders. After that the Reserve Bank of India was
established in April 1935.
At the time of first phase the growth of banking sector was very
slow. Between 1913 and 1948 there were approximately 1100 small
banks in India. To streamline the functioning and activities of commercial
banks, the Government of India came up with the Banking Companies
Act, 1949 which was later changed to Banking Regulation Act 1949 as
per amending Act of 1965 (Act No.23 of 1965). Reserve Bank of India
was vested with extensive powers for the supervision of banking in India
as a Central Banking Authority. After independence, Government has
taken most important steps in regard of Indian Banking Sector reforms. In
1955, the Imperial Bank of India was nationalized and was given the
name "State Bank of India", to act as the principal agent of RBI and to
handle banking transactions all over the country. It was established under
State Bank of India Act, 1955. Seven banks forming subsidiary of State
Bank of India was nationalized in 1960. On 19th July, 1969, major
process of nationalization was carried out. At the same time 14 major
Indian commercial banks of the country were nationalized. In 1980,
another six banks were nationalized, and thus raising the number of
nationalized banks to 20. Seven more banks were nationalized with
deposits over 200 Crores. Till the year 1980 approximately 80% of the
banking segment in India was under government’s ownership. On the
suggestions of Narsimhan Committee, the Banking Regulation Act was
amended in 1993 and thus the gates for the new private sector banks were
opened.
The following are the major steps taken by the Government of India to
Regulate Banking institutions in the country:-
During the Moghul period, ‘metallic’ money was issued and the
indigenous bankers played a very important role in lending money and
financing trade and commerce. Modern banking started in India only
from the beginning of 19th century. The earliest commercial banks were
started in India by the employees of the East India Company. These
banks were known as ‘Agency Houses’. They were mainly trading
concerns which combined banking business with other activities, such as;
trading & speculation.
The Banking Regulations Act was passed in the year 1949, which
provided a frame work for regulation and supervision of commercial
banking activity. This regulation brought RBI, an Apex Bank under
Government control. Under this act, RBI got wide ranging powers for
supervision and control of banks. The act also vested licensing powers
and the authority to conduct inspections.
Nationalization of Banks
The Reserve Bank derives its powers from the RBI Act of 1935
and the Banking Regulation Act, 1949. It performs the same functions as
central banks do all over the world. But the RBI has taken developmental
function also. Under this, it is responsible for institutionalizing of the vast
savings of the country, through spread of banking habits and banking
infrastructure. RBI is also supposed to help in a rapid industrialization
through developmental organization set up for the purpose like the IDBI,
IFCI, so on. It also overseas the agricultural development is not stifled for
want of credit and has, for the purpose, set up National Agricultural
Board for Rural Development (NABARD).
Scheduled Banks
The Scheduled Banks are those which are included in the second
schedule of RBI Act, 1935, others are non-scheduled banks. The state co-
operative banks also come under the category of scheduled banks. To be
included in the second schedule a bank (a) must have a paid up capital
and reserves of not less than Rs.5 lakhs, (b) it must also satisfy the RBI
that its affairs are not conducted in a manner detrimental to the interests
of its depositors. Scheduled banks are required to maintain a certain
amount of results with the RBI. They enjoy the facility of financial
accommodation and remittance facilities at a concessional rates from the
RBI.
The Non-Scheduled banks are those joint stock banks that are not
listed in the second schedule to the RBI Act, in 1939, i.e., when the RBI
Act had been around for four years, there were about 1500 joint stock
banks in the country of which as many as about 1400 were unscheduled.
However, now the number has come down and the volume of their
business is negligible small. The other unscheduled banks have since
Reserve Bank of India Scheduled Banks Non-Scheduled Bank State Co-
op Banks Commercial Banks Central Coop. Banks & Primary Credit
Commercial Banks Indian Banks Foreign Banks Public Sector Banks
Private Sector Banks State Bank of India & its Subsidiaries Nationalized
Banks Regional Rural Banks 55 either closed down or merged with other
scheduled banks, or converted themselves into non-banking companies.
Public Sector Banks
The State Bank Group comprises of State Bank of India and its
seven associates, viz.;
Co-operative Banks
Foreign Banks
Development Banks
c) prudential measures
d) legal measures,
Innovation in Banking
Innovations in banking have become the order of the day and the
concept of the bank a mere manager of liquidity belongs to the past. New
services, both credit and non-credit one’s have been introduced and
existing services developed by banks throughout the world as they meet
increasing competition for business from within the banking industry and
from without, fill-up in their range of services to steal a march over their
competitors by endeavoring to satisfy the needs of their present and
potential customers demanding more flexible, advantageously priced and
comprehensive facilities. Apart from selective introduction of modern
technology to speed up, banking operations require an increasing degree
of sophistication, there will be changes in the composition of banking
business reflecting the changes is occurring in trade and industry. The
banks, the world over, are becoming financial supermarkets in which a
wide variety of services can be purchased and often conduct business that
do not always resemble banking.
2. The salaried middle class has risen fast and they are in need of
financial assets with higher income growth potential than usual
commercial bank deposits;
Chapter 2
Literature Review
This chapter reviews the various literature reviews available on the
Subject of externalities relevant reference from literature and Research
studies were collected from books ,research, articles, research paper and
various Internet websites Were also used on the basis of identified issued
objectives where drawn to prosecute a fresh study in the study region. A
large volume of literature thus available on the different aspect of small
scale industries have been studied at length .A brief review of such
important studies is made here.
General Review
Malhotra R N (1986)
has highlighted the fact that nationalisation of Indian commercial
banks has brought dramatic changes in the profile of Indian banking.
Banking has emerged as an effective catalytic agent of socioeconomic
change. It has acquired a broad base and has also emerged as an agent of
development in the rural sector. The new phase of banking will be
characterised by increasing sophistication. Increased sophistication will
be reflected in introduction of modern technology and changes in the
composition of bank business. Policies and specific measures are being
framed to bring about all round improvement in banking operations.
Robert M (1991)
Agarwal R N (1993)
in his paper analysed the profits of Public Sector Banks since their
nationalisation and discuss the determinants of profitability. The study
covers State Bank Group and Nationalized Bank Group. Time series data
for the period 1970-1987 has been used. The profit equation is estimated
by ordinary least square method. Empirical results indicate that
profitability of public sector banks has been adversely affected by
increasing statutory reserve ratios, lending to priority sectors at lower
rates of interest, expansion of bank branches in the rural and semi-urban
regions and rising wages of employees. Declining labour productivity has
also adversely affected profitability. Time deposits are found important to
encourage profitability. The two banking groups are found significantly
different in their financial performance. Zacharias Thomas (1997)6 This
study is undertaken to review and analyze the performance effectiveness
of Syndicate Bank and other Nationalized banks in India using an
Economic Managerial- Efficiency Evaluation Model (EMEE Model)
developed by researcher. A period of ten years from 1984 to 1993-94 is
taken for the study. Thomas in this study found that Syndicate Bank got
5th position in capital adequacy and quality of assets, 15th in
profitability, 14th position in social banking, 8th in growth, 7th in
productivity and 15th position in customer service among the
nationalized banks. Further, he found that five nationalized banks showed
low health performance, seven low priority performance and eleven low
efficiency performance in comparison with Syndicate Bank.
Chapter 3
The primary data has been collected through
visiting a bank name union bank situated at Ulhasnagar
03 interacting with us very politely and efficiently
Ans. No
6) Are there any loan schemes available for large scale
industries?
Ans. Yes
Ans. Being the apex institution for MSMEs (micro, small and
medium enterprises), SIDBI's role has been that to solving
the sector's problems and meeting its needs. We, at SIDBI,
have re-oriented our business strategy to cater to the specific
needs of Indian MSMEs that are not fulfilled through
traditional sources.
Ans. SIDBI aims to have more than 100 branches in the next
2-3 years. It aids small and medium enterprises (SMEs).
Chapter 3
Finding and analysis
MAIN SCHEMES OF SIDBI
To provide both term loan for fixed assets and loan for working
capital through the same agency. The total working capital requirement of
such units inclusive of all fund based facilities may be taken into account
for determining the working capital facility eligible for refinance
Ans.
Ans
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8. What are the necessary measure to overcome those
problem?
Ans
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Article
16/08/2017 01:40pm
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