Introduction to Banking

PROF. CA. MAHESH KUMAR SHARDA

CHRIST UNIVERSITY, BANGALORE

Prof. CA. Mahesh Kumar Sharda, Christ

University, Bangalore
 WHAT IS BANK?

 A banker or bank is a financial institution whose

primary activity is to act as a payment agent for
customers and to borrow and lend money.
 An institution where one can place and borrow
money and take care of financial affairs; A branch
office of such an institution.

Prof. CA. Mahesh, Christ University, Bangalore

 FUNCTIONS OF
BANKS

 Accepting Deposits from public/others(Deposits).

 Lending money to public (Loans).
 Transferring money from one place to another
(Remittances).
 Keeping valuables in safe custody(Locker facility).
 Government business.

Prof. CA. Mahesh , Christ University, Bangalore

 TYPES OF BANKS

 Public sector banks

 Private sector banks
 Co-operative banks
 Development banks

Prof. CA. Mahesh, Christ University, Bangalore

 Private sector banks

 Old generation pvt banks

 New generation pvt banks
 Foreign banks

Prof. CA. Mahesh, Christ University, Bangalore

 Co-operative banks

 Co-operative banks in India started functioning

almost 100 years ago. They are set up to provide easy
loans to farmers or other persons to set up his
business.

Prof. CA. Mahesh, Christ University, Bangalore

 Development banks

 These banks are mainly used for developing

industries like NABARD,IFCI,SIDBI etc.

Prof. CA. Mahesh, Christ University, Bangalore

 Phases in Indian banking system

 Phase-1
Early phase from 1786 to 1969 of Indian Banks
 Phase-2
Nationalization of Indian Banks and up to 1991 prior
to Indian banking sector Reforms
 Phase-3
New phase of Indian Banking System with the
advent of Indian Financial & Banking Sector
Reforms after 1991

Prof. CA. Mahesh, Christ University, Bangalore

 Phase 1

 General bank of India (1786)

 RBI-1935
 Slow growth and periodic failure
 Banking Regulation Act, 1949
 People mostly save in postal deposits

Prof. CA. Mahesh, Christ University, Bangalore

 Phase 2

 Nationalization of Imperial bank of India and

formation of State bank of India(1955)
 Nationalization of SBI and Subsidiaries(1960)
 Creation of regional rural banks
 Merger of Five associates and the Bharatiya Mahila
Bank with SBI making it the country’s largest lender
among the top 50 banks in the world w.e.f 1-4-2017.

Prof. CA. Mahesh, Christ University, Bangalore

 Phase 3

 Entry of Foreign Banks

 Phone Banking and Net-Banking
 System become more convenient, fast & User
friendly.

Prof. CA. Mahesh, Christ University, Bangalore