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Overview of Banking

By
Mr Kishor Kalyan Mushrif

Training For You

1 6/12/2013

Money Lenders

Financial Institutions

Commercial banks Non-banking Finance Companies Leasing Companies Factoring Companies Forfaiting Companies

Training For You

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Financial Institutions
Central bank Discount and Finance House Development Financial Institutions Mutual Funds Special Financial Institutions Housing Finance Companies Regional Rural Banks

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Financial Institutions
NABARD State Finance Corporations SIDBI Residual Non-banking Finance Companies Infrastructure Finance Companies

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Indian Banking Growth Phases


Early Phase [1780s to 1960s] Various Banks Bank of Hindustan, Bank of Bombay Bank of madras Closure of banks, Amalgamation of banks

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Indian Banking Growth Phases


1969: Nationalization of 14 major commercial banks 1980: 7 more banks Nationalized Huge growth in bank branches during 1970s and 1980s SBI and Associates not clubbed with nationalized banks

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Training For You

Indian Banking: Growth Phases

Post 1991: New Generation Private Sector banks approved Initial paid up capital Rs One Hundred Crores IndusInd bank, Bank of Punjab, HDFC Bank, UTI Bank, Times Bank [merged with HDFC Bank] Global Trust Bank [merged with Oriental Bank of Commerce] ICICI Bank [merger of ICICI with Bank] IDBI Bank [merger of IDBI Bank with IDBI]
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Training For You

Functions of Reserve Bank of India


Central banking functions, Monetary Policy formulation and implementation, Regulation of commercial banks, Supervision of commercial banks, Bank and Branch Licensing,

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8 6/12/2013

Functions of Reserve Bank of India


Administration of FEMA Issue and Management of Public Debt of India, Management of MICR Clearing Custodian of Cash Reserves of commercial banks Provider of Liquidity Support Provider of Refinance

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Differentiating Commercial Banks


One of the oldest financial institutions Deal with all strata of society Deal with customers all over the world Play various roles Maintain variety of customer relationships

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Differentiating Commercial Banks


Undertake more functions than any other financial institution Failure more damaging than any other failure Highly leveraged business Existence depends upon faith.

Training For You

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Indian Banking System


Reserve Bank of India Nationalized banks Private Sector Banks [Old] Private Sector Banks [New Generation] Foreign banks Cooperative Banks SBI and Associates

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Banking Defined
Section 5 [b] of Banking Regulations Act defines Banking Acceptance of deposits of money For Lending or Investment Deposits repayable on Demand or Otherwise Deposits withdrawable by Cheque, Draft, Order, or Otherwise.

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Major Activities of Commercial Banks


Acceptance of deposits from Public Lending of various types, Investments Remittances Safe Deposit Lockers Safe Custody of Articles Collection of Negotiable Instruments

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Major Activities of Commercial Banks


Issuance of Letters of Credit Issuance of Letters of Guarantee Advising and Confirmation of LCs Dealings in Forex Collection of Taxes for Government Pension Payments

Training For You

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Major Activities of Commercial banks


Custodial Services Dealing in Bullion Merchant banking Investment banking Issuance of Indemnities for customers Purchase/ Sale of Bonds, Securities, Scrips etc.

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Types of Deposits
Current Accounts Savings Accounts Term Deposits Recurring Deposits Resident v Non Resident Deposits

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Types of Remittance
Issuance / Payment of DDs Issuance/ Payment of Bankers Cheques Issuance / Payment of telegraphic Transfers SWIFT Message Types Electronic Funds Transfer

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Types of Loans
Short term / Demand, Medium Term Long term Retail Corporate Funded facilities/ Non Funded facilities

Training For You

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Types of Loan
Short Term [Retail] Overdrafts Cash Credits IPO Funding Clean Loans Loans against Deposits/ Government Securities

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Types of Loans
Medium Term [Retail] Personal Loans Educational Loans Clean Loans Vehicle Loans

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Types of Loans [Retail]


Housing Loans Loans against House Property, Vehicle Loans Term Loans

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Types of Loans
Short Term [Corporate] Overdrafts Cash Credits Clean Loans

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Bill Finance
Cheque Purchase [Inland/ Foreign Currency] Bills Purchase [Inland] Bills Discounting [Inland] Bills Negotiation [Inland LCs] Bills Negotiation [Export LCs]

Training For You

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Non Funded Facilities


Issuance of Inland LCs Issuance of Import LCs Confirmation of Inland LCs Confirmation of Export LCs Issuance of Inland Guarantees Issuance of Foreign Guarantees Co acceptances [Inland] Co acceptances [Foreign]

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Functions of Reserve Bank of India


Management of Forex Reserves of India Currency management Management of value of INR against basket of currencies, Banker to Government

Training For You

26 6/12/2013