Structure of Indian Banking System

Reserve Bank of India

(Apex Monetary Institution)
Scheduled Banks
Non- Scheduled Banks
Cooperative Banks
Commercial Banks
Central Cooperative
Banks
State Cooperative
Banks
Indian Banks
Foreign Banks
Public Sector Banks
Private Sector Banks
SBI & its associate
Banks
Other Nationalized
Banks
Regional
Rural Banks
Banking Structure Reforms by
Narasimhan Committee
The finance ministry of Govt of India set up various
committees with the task of analyzing Indias
banking sector and recommending legislation and
regulations to make it more effective, competitive
and efficient. Two such expert committees were set
up under the chairmanship of M.Narasimhan.
They submitted their recommendations in the 1990s
in reports widely known as the Narasimhan
Committee-I (1991) report and the Narasimhan
Committee-II (1998) report. These recommendations
not only helped unleash the potential of banking in
India, they are also recognized as a factor towards
minimizing the impact of global financial crisis.
Narasimhan Committee- I
Recommendation: Report 1991
Reduction in the SLR and CRR (Statutory
Liquid Ration and Cash Reserve Ratio)
Phasing out directed credit programme
Interest rate determination
Structural reorganizations of the banking
sector
Establishment of the ARF Tribunal: (Asset
Reconstruction Fund)
Removal of Dual Control
Banking Autonomy
Narasimhan Committee- II
Recommendation: Report 1998
Strengthening Banks in India
Narrow Banking
Capital Adequacy Ratio
Bank Ownership
Review of Banking Laws
Reserve Bank of India (RBI)
The Reserve bank of India (RBI) is the central bank of
the country. It has been established as a body
corporate under the Reserve Bank of India Act,
which came into effect from 1
st
April, 1935. The
Reserve Bank was started as share-holders bank with
a paid up capital of Rupees 5 Crores. On
establishment it took over the function of
management of currency from the government of
India and power of credit control.
The RBI was nationalized in 1949 soon after the
countrys independence.
Role of RBI
Promotion of Commercial banking
Promotion of Rural Credit
Promotion of Co-operative credit
Promotion of Industrial Finance
Promotion of Export Credit
Regulation of Credit
Credit to weaker sections
Exchange control
Functions of RBI
Central Banking Functions
Issues of Bank notes
Banker to Government
Bankers bank
Controller of Credit
Supervisory Functions:
Provide License
Coverage of bank operations
Restrict loans and advances
Collect and supply information
Functions of RBI
Promotional Functions:
Development of specialized financial institutions
Promote regional rural banks
Promote national housing bank
Promote Research