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Banking Service in India

I.. HISTORY OF BANKING STORY OF BANK NG

IN INDIAN ND AThere are three different phases in the history of banking in

India.

1) Pre-Nationalization Era.

2) Nationalization Stage.

3) Post iberalization Era.

1) Pre-Nationalization Era!

In India the b"siness of banking and #redit $as

pra#ti#es e%en in %ery early ti&es. The re&ittan#e of &oney thro"gh '"ndies(

an indigeno"s #redit instr"&ent( $as %ery pop"lar. The h"ndies $ere iss"ed

by bankers kno$n as Shroffs( Sah"kars( Shah"s or aha*ans in different

parts of the #o"ntry.

The &odern type of banking( ho$e%er( $as de%eloped by the +gen#y 'o"ses

of ,al#"tta and o&bay after the establish&ent of "le by the East India

,o&pany in 1/th and 10th #ent"ries.

"ring the early part of the 10th ,ent"ry( ht %ol"&e of foreign trade $as

relati%ely s&all. ater on as the trade epanded( the need for banks of the

E"ropean type $as felt and the go%ern&ent of the East India ,o&pany took

interest in ha%ing its o$n bank. The go%ern&ent of engal took the initiati%e

and the first presiden#y bank( the ank of ,al#"tta ank of engal) $as

established in 1/45. In 1/45( the ank of o&bay and IN 1/43( the ank of

adras $as also set "p.




These three banks also kno$n as 6Presiden#y ank7. The Presiden#y anks

had their bran#hes in i&portant trading #enters b"t &ostly la#ked in

"nifor&ity in their operational poli#ies. In 1/00( the 8o%ern&ent proposed to

a&alga&ate these three banks in to one so that it #o"ld also f"n#tion as a,entral ank( b"t the Presiden#y anks did not fa%or the idea. 'o$e%er( the

#onditions obtaining d"ring $orld $ar period 1014-101/) e&phasized the

need for a "nified banking instit"tion( as a res"lt of $hi#h the I&perial ank

$as set "p in 1021. The I&perial ank of India a#ted like a ,entral bank and

as a banker for other banks. The I eser%e ank of India) $as

established in 1039 as the ,entral ank of the ,o"ntry. In 1040( the anking

eg"lation a#t $as passed and the I $as nationalized and a#:"ired

etensi%e reg"latory po$ers o%er the #o&&er#ial banks. In 1095( the Indian

anking syste& #o&prised of the I( the I&perial ank of India(

,ooperati%e banks( E#hange banks and Indian ;oint Sto#k banks.




2) Nationalization Stages!

+fter Independen#e( in 1091( the +ll India "ral ,redit s"r%ey(

#o&&ittee of ire#tion $ith Shri. +. . 8or$ala as ,hair&an re#o&&ended

a&alga&ation of the I&perial ank of India and ten others banks into a

ne$ly established bank #alled the State ank of India SI). The 8o%ern&ent

of India a##epted the re#o&&endations of the #o&&ittee and introd"#ed the

State ank of India bill in the ok Sabha on 1<th +pril 1099 and it $as passed

by Parlia&ent and got the president=s assent on /th ay 1099. The +#t #a&e

into for#e on 1st ;"ly 1099( and the I&perial ank of India $as nationalized in

1099 as the State ank of India.

The &ain ob*e#ti%e of establishing SI by nationalizing the I&perial ank of

India $as 6to etend banking fa#ilities on a large s#ale &ore parti#"larly in

the r"ral and se&i-"rban areas and to di%erse other p"bli# p"rposes.7

In 1090( the SI S"bsidiary ank) a#t $as proposed and the

follo$ing eight state-asso#iated banks $ere taken o%er by the SI as its

s"bsidiaries.




>ith effe#t fro& 1st ;an"ary 10<3( the State ank of ikaner and

State ank of ;aip"r $ith head offi#e lo#ated at ;aip"r. Th"s( se%en

s"bsidiary banks State ank of India for&ed the SI 8ro"p.

The SI 8ro"p "nder stat"tory obligations $as re:"ired to

open ne$ offi#es in r"ral and se&i-"rban areas and &odern banking $as

taken to these "nbanked re&ote areas.

?n 10th ;"ly 10<0( then the Pri&e inister( rs. Indira 8andhi

anno"n#ed the nationalization of 14 &a*or s#hed"led ,o&&er#ial anks ea#h

ha%ing deposits $orth s. 95 #rore and abo%e. This $as a t"rning point in the

history of #o&&er#ial banking in India. ater the 8o%ern&ent Nationalized

si &ore #o&&er#ial pri%ate se#tor banks $ith deposit liability of not less

than s. 255 #rores on 19th +pril 10/5( %iz.

1) +ndhra ank.

2) ,orporation ank.

Name of the Bank Subsidiary with effectfrom

State Bank of Hyderabad 1st ?#tober 1090

State Bank of Bikaner 1st ;an"ary 10<5

State Bank of Jaipur 1st ;an"ary 10<5

State Bank of Saurashtra 1st ay 10<5

State Bank of Patiala 1st +pril 10<5

State Bank of Mysore 1st ar#h 10<5

State Bank of Indore 1st ;an"ary 10</

State Bank of Travancore 1st ;an"ary 10<5




3) Ne$ ank if India.

4) ?riental ank of ,o&&er#e.

9) P"n*ab and Sind ank.

<) @i*aya ank.

In 10<0( the ead ank S#he&e $as introd"#ed to etend

banking fa#ilities to e%ery #orner of the #o"ntry. ater in 10A9( egional

"ral anks $ere set "p to s"pple&ent the a#ti%ities of the #o&&er#ial banks

and to espe#ially &eet the #redit needs of the $eaker se#tions of the r"ral

so#iety.

Nationalization of banks pa%ed $ay for retail banking and as a

res"lt there has been an alt ro"nd gro$th in the bran#h net$ork( the deposit

&obilization( #redit disposals and of #o"rse e&ploy&ent.

The first year after nationalization $itnessed the total gro$th in

the agri#"lt"ral loans and the loans &ade to SSI by /AB and 4/B

respe#ti%ely. The o%erall gro$th in the deposits and the ad%an#es indi#ates

the i&pro%e&ent that has taken pla#e in the banking habits of the people in

the r"ral and se&i-"rban areas $here the bran#h net$ork has spread. S"#h

#redit epansion enabled the banks to a#hie%e the goals of nationalization( it

$as ho$e%er( a#hie%ed at the #oast of profitability of the banks.

• ,onse:"en#es of Nationalization!




The :"ality of #redit assets fell be#a"se of liberal #redit etension

poli#y.

Politi#al interferen#e has been as additional &alady.

Poor appraisal in%ol%ed d"ring the loan &eals #ond"#ted for #redit

disb"rsals.

The #redit fa#ilities etended to the priority se#tor at #on#essional

rates.

The high le%el of lo$ yielding S in%est&ents ad%ersely affe#ted the

profitability of the banks.

The rapid bran#h epansion has been the s:"eeze on profitability of

banks e&anating pri&arily d"e to the in#rease in the fied #osts.

There $as do$n$ard trend in the :"ality of ser%i#es and effi#ien#y of

the banks.




3) Post-iberalization Era---Thr"st on C"ality and

Profitability!

y the beginning of 1005( the so#ial banking goals set for the

banking ind"stry &ade &ost of the p"bli# se#tor res"lted in the pres"&ption

that there $as no need to look at the f"nda&ental finan#ial strength of this

bank. ,onse:"ently they re&ained "nder#apitalized. e%a&ping this

str"#t"re of the banking ind"stry $as of etre&e i&portan#e( as the health of

the finan#ial se#tor in parti#"lar and the e#ono&y $as a $hole $o"ld be

refle#ted by its perfor&an#e.

The need for restr"#t"ring the banking ind"stry $as felt greater$ith the initiation of the real se#tor refor& pro#ess in 1002. the refor&s ha%e

enhan#ed the opport"nities and #hallenges for the real se#tor &aking the&

operate in a borderless global &arket pla#e. 'o$e%er( to harness the benefits

of globalization( there sho"ld be an effi#ient finan#ial se#tor to s"pport the

str"#t"ral refor&s taking pla#e in the real e#ono&y. 'en#e( along $ith the

refor&s of the real se#tor( the banking se#tor refor&ation $as also addressed.

The ro"te #a"ses for the la#kl"ster perfor&an#e of banks(

for&ed the ele&ents of the banking se#tor refor&s. So&e of the fa#tors that

led to the dis&al perfor&an#e of banks $ere.

eg"lated interest rate str"#t"re.

a#k of fo#"s on profitability.

a#k of transparen#y in the bank=s balan#e sheet.

a#k of #o&petition.

E#essi%e reg"lation on organization str"#t"re and &anagerial

reso"r#e.

E#essi%e s"pport fro& go%ern&ent.




+gainst this ba#kgro"nd( the finan#ial se#tor refor&s $ere initiated to bring

abo"t a paradig& shift in the banking ind"stry( by addressing the fa#tors for

its dis&al perfor&an#e.

In this #ontet( the re#o&&endations &ade by a high le%el

#o&&ittee on finan#ial se#tor( #haired by . Narasi&ha&( laid the

fo"ndation for the banking se#tor refor&s. These refor&s tried to enhan#e

the %iability and effi#ien#y of the banking se#tor. The Narasi&ha&

,o&&ittee s"ggested that there sho"ld be f"n#tional a"tono&y( fleibility in

operations( dil"tion of banking strang"lations( red"#tion in reser%ere:"ire&ents and ade:"ate finan#ial infrastr"#t"re in ter&s of s"per%ision(

a"dit and te#hnology. The #o&&ittee f"rther ad%o#ated introd"#tion of

pr"dential for&s( transparen#y in operations and i&pro%e&ent in

prod"#ti%ity( only ai&ed at liberalizing the reg"latory fra&e$ork( b"t also to

keep the& in ti&e $ith international standards. The e&phasis shifted to

effi#ient and pr"dential banking linked to better #"sto&er #are and #"sto&er

ser%i#es.




• Pri%ate Se#tor anks

Pri%ate banking in India $as pra#ti#ed sin#e the begining of

banking syste& in India. The first pri%ate bank in India to be set "p in

Pri%ate Se#tor anks in India $as Ind"s Ind ank. It is one of the fastest

gro$ing ank Pri%ate Se#tor anks in India. II ranks the tenth largest

de%elop&ent bank in the $orld as Pri%ate anks in India and has pro&oted a

$orld #lass instit"tion in India.

The first Pri%ate ank in India to re#ei%e an in prin#iple

appro%al fro& the eser%e ank of India $as 'o"sing e%elop&ent Dinan#e

,orporation i&ited( to set "p a bank in the pri%ate se#tor banks in India as

part of the Is liberalization of the Indian anking Ind"stry. It $as

in#orporated in +"g"st 1004 as 'D, ank i&ited $ith registered offi#e in

"&bai and #o&&en#ed operations as S#hed"led ,o&&er#ial ank in

;an"ary 1009.

IN8 @aysya( yet another Pri%ate ank of India $as

in#orporated in the year 1035. angalore has a pride of pla#e for ha%ing the

first bran#h in#eption in the year 1034. >ith s"##essi%e years of patronage

and #onstantly setting ne$ standards in banking( IN8 @aysya ank has

&any #redits to its a##o"nt.




• Entry of Pri%ate Se#tor anks!

There has been a paradig& shift in &indsets both at the

8o%ern&ent le%el in the banking ind"stry o%er the years sin#e

Nationalization of anks in 10<0( parti#"larly d"ring the last de#ade 1005-

2555). 'a%ing a#hie%ed the ob*e#ti%es of Nationalization( the &ost i&portant

iss"e before the ind"stry at present is s"r%i%al and gro$th in the en%iron&ent

generated by the e#ono&i# liberalization greater #o&petition $ith a %ie$ to

a#hie%ing higher prod"#ti%ity and effi#ien#y in ;an"ary 1003 for the entry ofPri%ate Se#tor banks based on the Nationalization ,o&&ittee report of 1001(

$hi#h en%isaged a larger role for Pri%ate Se#tor anks.

The I pres#ribed a &ini&"& paid "p #apital of s. 155 #rores

for the ne$ bank and the shares are to be listed at sto#k e#hange. +lso the

ne$ bank after being granted li#ense "nder the anking eg"lation +#t shall

be registered as a p"bli# li&ited #o&pany "nder the #o&panies +#t( 109<.




S"bse:"ently 0 ne$ #o&&er#ial banks ha%e been granted li#ense to

start banking operations. The ne$ pri%ate se#tor banks ha%e been %ery

aggressi%e in b"siness epansion and is also reporting higher profile le%els

taking the ad%antage of te#hnology and skilled &anpo$er. In #ertain areas(

these banks ha%e e%en o"r #rossed the other gro"p of banks in#l"ding foreign

banks.

Private Sector

Banks

Old Pvt. Sector

Banks (25)

New Pvt. Sector

Banks (9)




• ,"rrent s#enario

,"rrently 2550)( o%erall( banking in India is #onsidered as

fairly &at"re in ter&s of s"pply( prod"#t range and rea#h-e%en tho"gh rea#h

in r"ral India still re&ains a #hallenge for the pri%ate se#tor and foreign

banks. E%en in ter&s of :"ality of assets and #apital ade:"a#y( Indian banks

are #onsidered to ha%e #lean( strong and transparent balan#e sheets-as

#o&pared to other banks in #o&parable e#ono&ies in its region. The eser%e

ank of India is an a"tono&o"s body( $ith &ini&al press"re fro& the

go%ern&ent. The stated poli#y of the ank on the Indian "pee is to &anage

%olatility-$itho"t any stated e#hange rate-and this has &ostly been tr"e.

>ith the gro$th in the Indian e#ono&y epe#ted to be strong for :"ite so&e

ti&e-espe#ially in its ser%i#es se#tor( the de&and for banking ser%i#es-

espe#ially retail banking( &ortgages and in%est&ent ser%i#es are epe#ted to

be strong. F+s( takeo%ers( asset sales and &"#h &ore a#tion as it is

"nra%eling in ,hina) $ill happen on this front in India.

In ar#h 255<( the eser%e ank of India allo$ed >arb"rg

Pin#"s to in#rease its stake in Gotak ahindra ank a pri%ate se#tor bank)

to 15B. This is the first ti&e an in%estor has been allo$ed to hold &ore than

9B in a pri%ate se#tor bank sin#e the I anno"n#ed nor&s in 2559 that any

stake e#eeding 9B in the pri%ate se#tor banks $o"ld need to be %etted by

the&. ,"rrently( India has // s#hed"led #o&&er#ial banks S,s) - 2/ p"bli#

se#tor banks that is $ith the 8o%ern&ent of India holding a stake)( 20

pri%ate banks these do not ha%e go%ern&ent stakeH they &ay be p"bli#ly

listed and traded on sto#k e#hanges) and 31 foreign banks.

http://en.wikipedia.org/wiki/Government_of_India





They ha%e a #o&bined net$ork of o%er 93(555 bran#hes and

1A(555 +Ts. +##ording to a report by I,+ i&ited( a rating agen#y( the

p"bli# se#tor banks hold o%er A9 per#ent of total assets of the banking

ind"stry( $ith the pri%ate and foreign banks holding 1/.2B and <.9Brespe#ti%ely.

http://en.wikipedia.org/wiki/Automated_teller_machine

http://en.wikipedia.org/wiki/Automated_teller_machine




II. . BANKING IN INDIAANK NG N ND A

• ?%er%ie$ of anking!

anking eg"lation +#t of India( 1040 defines anking as

6a##epting( for the p"rpose of lending or of in%est&ent of deposits of &oney

fro& the p"bli#( repayable on de&and or other$ise or $ithdra$able by

#he:"e( draft order or other$ise.7 The eser%e ank of India +#t( 1034 and

the anking eg"lation +#t( 1040( go%ern the banking operations in India.

• ?rganizational Str"#t"re of anks in India!

In India banks are #lassified in %ario"s #ategories a##ording to

differ rent #riteria. The follo$ing #harts indi#ate the banking str"#t"re.

eser%e ank of India

Commercial Banks Co-operative Banks Development Banks

Nationalied Private S!ort-term

credit"on#-term

credit

$#ric%lt%ralCredit

&r'anCredit

*+ *nd%strial $#ric%lt%ral




• road ,lassifi#ation of anks in India!

1) The I!

The I is the s"pre&e &onetary and banking a"thority in the

#o"ntry and has the responsibility to #ontrol the banking syste& in the

#o"ntry. It keeps the reser%es of all s#hed"led banks and hen#e is

kno$n as the 6eser%e ank7.

2) P"bli# Se#tor anks!

State ank of India and its +sso#iates /)

Nationalized anks 10)

egional "ral anks Sponsored by P"bli# Se#tor anks 10<)

3) Pri%ate Se#tor anks!

?ld 8eneration Pri%ate anks 22)

Doreign Ne$ 8eneration Pri%ate anks /)

anks in India 45)

4) ,o-operati%e Se#tor anks!

State ,o-operati%e anks

,entral ,o-operati%e anks

Pri&ary +gri#"lt"ral ,redit So#ieties

and e%elop&ent anks




State and e%elop&ent anks

9) e%elop&ent anks! e%elop&ent anks &ostly pro%ide long ter&

finan#e for setting "p ind"stries. They also pro%ide short-ter& finan#e for

eport and i&port a#ti%ities)

Ind"strial Dinan#e ,o-operation of India ID,I)

Ind"strial e%elop&ent of India II)

Ind"strial In%est&ent ank of India III)

S&all Ind"stries e%elop&ent ank of India SII)

National ank for +gri#"lt"re and "ral e%elop&ent N++)

Eport-I&port ank of India




•

ole of anks!

anks play a positi%e role in e#ono&i# de%elop&ent

of a #o"ntry as repositories of #o&&"nity=s sa%ings and as p"r%eyors of

#redit. Indian anking has aided the e#ono&i# de%elop&ent d"ring the last

fifty years in an effe#ti%e $ay. The banking se#tor has sho$n a re&arkable

responsi%eness to the needs of planned e#ono&y. It has bro"ght abo"t a

#onsiderable progress in its efforts at deposit &obilization and has taken an"&ber of &eas"res in the re#ent past for a##elerating the rate of gro$th of

deposits. +s re#o"rse to this( the #o&&er#ial banks opened bran#hes in

"rban( se&i-"rban and r"ral areas and ha%e introd"#ed a n"&ber of

attra#ti%e s#he&es to foster e#ono&i# de%elop&ent.

The a#ti%ities of #o&&er#ial banking ha%e gro$th

in &"lti-dire#tional $ays as $ell as &"lti-di&ensional &anner. anks ha%e

been playing a #atalyti# role in area de%elop&ent( ba#k$ard area

de%elop&ent( etended assistan#e to r"ral de%elop&ent all along helping

agri#"lt"re( ind"stry( international trade in a signifi#ant &anner. In a $ay(




#o&&er#ial banks ha%e e&erged as key finan#ial agen#ies for rapid e#ono&i#

de%elop&ent.

y pooling the sa%ings together( banks #an &ake a%ailable f"nds

to spe#ialized instit"tions $hi#h finan#e different se#tors of the e#ono&y(

needing #apital for %ario"s p"rposes( risks and d"rations. y #ontrib"ting to

go%ern&ent se#"rities( bonds and debent"res of ter&-lending instit"tions in

the fields of agri#"lt"re( ind"stries and no$ ho"sing( banks are also pro%iding

these instit"tions $ith an a##ess to the #o&&on pool of sa%ings &obilized by

the&( to that etent relie%ing the& of the responsibility of dire#tly

approa#hing the sa%er. This inter&ediation role of banks is parti#"larly

i&portant in the early stages of e#ono&i# de%elop&ent and finan#ial

spe#ifi#ation. + #o"ntry like India( $ith different regions at different stages of

de%elop&ent( presents an interesting spe#tr"& of the e%ol%ing role of banks(

in the &atter of inter-&ediation and beyond.

obilization of reso"r#es for&s an integral part of

the de%elop&ent pro#ess in India. In this pro#ess of &obilization( banks are at

a great ad%antage( #hiefly be#a"se of their net$ork of bran#hes in the

#o"ntry. +nd banks ha%e to pla#e #onsiderable relian#e on the &obilization of

deposits fro& the p"bli# to finan#e de%elop&ent progra&&es. D"rther(

deposit &obalization by banks in India a#:"ired greater signifi#an#e in their

ne$ role in e#ono&i# de%elop&ent.

,o&&er#ial banks pro%ide short-ter& and &edi"&-ter&

finan#ial assistan#e. The short-ter& #redit fa#ilities are granted for $orking

#apital re:"ire&ents. The &edi"&-ter& loans are for the a#:"isition of land(

#onstr"#tion of fa#tory pre&ises and p"r#hase of &a#hinery and e:"ip&ent.

These loans are generally granted for periods ranging fro& fi%e to se%en

years. They also establish letters of #redit on behalf of their #lients fa%o"ring




s"ppliers of ra$ &aterials&a#hinery both Indian and foreign) $hi#h etend

the banker=s ass"ran#e for pay&ent and th"s help their deli%ery. ,ertain

transa#tion( parti#"larly those in #ontra#ts of sale of 8o%ern&ent

epart&ents( &ay re:"ire g"arantees being iss"ed in lie" of se#"rity earnest&oney deposits for release of ad%an#e &oney( s"pply of ra$ &aterials for

pro#essing( f"ll pay&ent of bills on the ass"ran#e of the perfor&an#e et#.

,o&&er#ial banks iss"e s"#h g"arantees also.

• The ole of eser%e ank of

India I) J anker=s ank!

The eser%e ank of India

I) is the #entral bank of India( and $as

established on +pril 1( 1039 in a##ordan#e

$ith the pro%isions of the eser%e ank ofIndia +#t( 1034. Sin#e its in#eption( it has been head:"artered in "&bai.

Tho"gh originally pri%ately o$ned( I has been f"lly o$ned by the

8o%ern&ent of India sin#e nationalization in 1040.

I is go%erned by a #entral board headed by a 8o%ernor) appointed by the

,entral 8o%ern&ent. "%%"ri S"bbarao $ho s"##eeded Kaga @en"gopal

eddy on Septe&ber 2( 255/ is the #"rrent 8o%ernor of I. I has 22

regional offi#es a#ross India. The eser%e ank of India $as set "p on the

re#o&&endations of the 'ilton Ko"ng ,o&&ission. The #o&&issions"b&itted its report in the year 102<( tho"gh the bank $as not set "p for nine

years.

http://en.wikipedia.org/wiki/Central_bank

http://en.wikipedia.org/wiki/India

http://en.wikipedia.org/wiki/April_1

http://en.wikipedia.org/wiki/1935


http://en.wikipedia.org/wiki/Mumbai




http://en.wikipedia.org/wiki/Yaga_Venugopal_Reddy


http://en.wikipedia.org/wiki/September_2



http://en.wikipedia.org/wiki/Governor



http://en.wikipedia.org/wiki/Central_bank

http://en.wikipedia.org/wiki/India

http://en.wikipedia.org/wiki/April_1



http://en.wikipedia.org/wiki/Mumbai






http://en.wikipedia.org/wiki/September_2


http://en.wikipedia.org/wiki/Governor





• ain ?b*e#ti%e!

onetary +"thority-

Dor&"lates i&ple&ents and &onitors the &onetary poli#y.

?b*e#ti%e! &aintaining pri#e stability and ens"ring ade:"ate flo$ of

#redit to prod"#ti%e se#tors.

eg"lator and s"per%isor of the finan#ial syste&-

Pres#ribes broad para&eters of banking operations $ithin $hi#h the

#o"ntry=s banking and finan#ial syste& f"n#tions.

?b*e#ti%e! &aintain p"bli# #onfiden#e in the syste&( prote#t

depositors= interest and pro%ide #ost-effe#ti%e banking ser%i#es to the

p"bli#. The anking ?&b"ds&an S#he&e has been for&"lated by the

eser%e ank of India I) for effe#ti%e redressal of #o&plaints by

bank #"sto&ers

anager of E#hange ,ontrol-

anages the Doreign E#hange anage&ent +#t( 1000.

?b*e#ti%e! to fa#ilitate eternal trade and pay&ent and pro&ote

orderly de%elop&ent and &aintenan#e of foreign e#hange &arket in

India.

Iss"er of #"rren#y-

Iss"es and e#hanges or destroys #"rren#y and #oins not fit for

#ir#"lation.




?b*e#ti%e! to gi%e the p"bli# ade:"ate :"antity of s"pplies of #"rren#y

notes and #oins and in good :"ality.

e%elop&ental role

Perfor&s a $ide range of pro&otional f"n#tions to s"pport national

ob*e#ti%es.

elated D"n#tions-

anker to the 8o%ern&ent! perfor&s &er#hant banking f"n#tion for

the #entral and the state go%ern&entsH also a#ts as their banker.

anker to banks! &aintains banking a##o"nts of all s#hed"led banks.

?$ner and operator of the depository S8) and e#hange NS) for

go%ern&ent bonds.

There is no$ an international #onsens"s abo"t the need to fo#"s the tasks of a

#entral bank "pon #entral banking. I is far o"t of to"#h $ith s"#h a

prin#iple( o$ing to the spra$ling &andate des#ribed abo%e.

• S"per%isory D"n#tions!

In addition to its traditional #entral f"n#tions( the eser%e bank

has #ertain non-&onetary f"n#tions of the nat"re of s"per%ision of banks and

pro&otion of so"nd banking in India. The eser%e ank +#t( 1034( and the

anking eg"lation +#t( 1040 ha%e gi%en the I $ide po$ers of s"per%ision

and #ontrol o%er #o&&er#ial and #ooperati%e banks( relating to li#ensing and

establish&ents( bran#h epansion( li:"idity of their assets( &anage&ent and

&ethods of $orking( a&alga&ation( re#onstr"#tion and li:"idation. The I

is a"thorized to #arry o"t periodi#al inspe#tions of the banks and to #all for

ret"rns and ne#essary infor&ation fro& the&. The nationalization of 14




&a*or Indian s#hed"led banks in ;"ly 10<0 has i&posed ne$ responsibilities

on the I for dire#ting the gro$th of banking and #redit poli#ies to$ards

&ore rapid de%elop&ent of the e#ono&y and realization of #ertain desired

so#ial ob*e#ti%es. The s"per%isory f"n#tions of the I ha%e helped a greatdeal in i&pro%ing the standard of banking in India to de%elop on so"nd lines

and to i&pro%e the &ethods of their operation.

• Pro&otional D"n#tions!

>ith e#ono&i# gro$th ass"&ing a ne$ "rgen#y sin#e

Independen#e( the range of the eser%e ank=s f"n#tions ha%e steadily

$idened. The ank no$ perfor&s a %ariety of de%elop&ental and

pro&otional f"n#tions( $hi#h( at one ti&e( $ere regarded as o"tside the

nor&al s#ope of #entral banking. The eser%e ank $as asked to pro&ote

banking habit( etend banking fa#ilities to r"ral and se&i-"rban areas( and

establish and pro&ote ne$ spe#ialized finan#ing agen#ies. +##ordingly( the

eser%e bank has helped in the setting "p of the ID,I and the SD,! it set "p

the eposit Ins"ran#e ,orporation of India in 10<3 and the Ind"striale#onstr"#tion ,orporation of India in 10A2. These instit"tions $ere set "p

dire#tly or indire#tly by the eser%e ank to pro&ote sa%ing habit and to

&obilize sa%ings( and to pro%ide ind"strial finan#e as $ell as agri#"lt"ral

finan#e. +s far ba#k as 1039( the I set "p the +gri#"lt"ral ,redit

epart&ent to pro%ide agri#"lt"ral #redit. "t only sin#e 1091 the ank=s

role in this field has be#o&e etre&ely i&portant. The ank has de%eloped

the #o-operati%e #redit &o%e&ent to en#o"rage sa%ing( to eli&inate &oney-

lenders fro& the %illages and to ro"te its short ter& #redit to agri#"lt"re. The

I has set "p the +gri#"lt"ral efinan#e and e%elop&ent ,orporation to

pro%ide long-ter& finan#e to far&ers.




• ,o-operati%e anks!

The ,o-operati%e bank has a history of al&ost 155 years. The

,o-operati%e banks are an i&portant #onstit"ent of the Indian Dinan#ial

Syste&( *"dging by the role assigned to the&( the epe#tations they are

s"pposed to f"lfill( their n"&ber( and the n"&ber of offi#es they operate. The

#o-operati%e &o%e&ent originated in the >est( b"t the i&portan#e that s"#h

banks ha%e ass"&ed in India is rarely paralleled any$here else in the $orld.

Their role in r"ral finan#ing #ontin"es to be i&portant e%en today( and their

b"siness in the "rban areas also has in#reased pheno&enally in re#ent years

&ainly d"e to the sharp in#rease in the n"&ber of #o-operati%e banks.

>hile the #o-operati%e banks in r"ral areas &ainly finan#e

agri#"lt"ral based a#ti%ities in#l"ding far&ing( #attle( &ilk( hat#hery(

personal finan#e et#. along $ith so&e s&all s#ale ind"stries and self-

e&ploy&ent dri%en a#ti%ities( the #o-operati%e banks in "rban areas &ainly

finan#e %ario"s #ategories of people for self-e&ploy&ent( ind"stries( s&all

s#ale "nits( ho&e finan#e( #ons"&er finan#e( personal finan#e( et#. So&e of

the #o-operati%e banks are :"ite for$ard looking and ha%e de%eloped

s"ffi#ient #ore #o&peten#ies to #hallenge state and pri%ate se#tor banks.




+##ording to N+D,L the total deposits F lendings of ,o-

operati%e anks is &"#h &ore than ?ld Pri%ate Se#tor anks F also the Ne$

Pri%ate Se#tor anks. This eponential gro$th of ,o-operati%e anks is

attrib"ted &ainly to their &"#h better lo#al rea#h( personal intera#tion $ith

#"sto&ers( their ability to #at#h the ner%e of the lo#al #lientele. Tho"gh

registered "nder the ,o-operati%e So#ieties +#t of the espe#ti%e States

$here for&ed originally) the banking related a#ti%ities of the #o-operati%e

banks are also reg"lated by the eser%e ank of India. They are go%erned by

the anking eg"lations +#t 1040 and anking a$s ,o-operati%e So#ieties)

+#t( 10<9.

• There are t$o &ain #ategories of the #o-operati%e banks. -

Short ter& lending oriented #o-operati%e anks J $ithin this #ategory

there are three s"b #ategories of banks %iz state #o-operati%e banks(




istri#t #o-operati%e banks and Pri&ary +gri#"lt"ral #o-operati%e

so#ieties.

ong ter& lending oriented #o-operati%e anks J $ithin the se#ond

#ategory there are land de%elop&ent banks at three le%els state le%el(

distri#t le%el and %illage le%el.

• Deat"res of ,ooperati%e anks -

,o-operati%e anks are organized and &anaged on the prin#ipal

of #o-operation( self-help( and &"t"al help. They f"n#tion $ith the r"le of

6one &e&ber( one %ote7. D"n#tion on 6no profit( no loss7 basis. ,o-operati%e

banks( as a prin#iple( do not p"rs"e the goal of profit &ai&ization. ,o-

operati%e bank perfor&s all the &ain banking f"n#tions of deposit

&obilization( s"pply of #redit and pro%ision of re&ittan#e fa#ilities. ,o-

operati%e anks pro%ide li&ited banking prod"#ts and are f"n#tionally

spe#ialists in agri#"lt"re related prod"#ts. 'o$e%er( #o-operati%e banks no$

pro%ide ho"sing loans also.

L,s pro%ide $orking #apital loans and ter& loan as $ell. The

State ,o-operati%e anks S,s)( ,entral ,o-operati%e anks ,,s) and

Lrban ,o-operati%e anks L,s) #an nor&ally etend ho"sing loans "pto




s 1 lakh to an indi%id"al. The s#hed"led L,s( ho$e%er( #an lend "pto s 3

lakh for ho"sing p"rposes.

The L,s #an pro%ide ad%an#es against shares and debent"res

also. ,o-operati%e bank do banking b"siness &ainly in the agri#"lt"re and

r"ral se#tor. 'o$e%er( L,s( S,s( and ,,s operate in se&i "rban( "rban(

and &etropolitan areas also.

The "rban and non-agri#"lt"ral b"siness of these banks has

gro$n o%er the years. The #o-operati%e banks de&onstrate a shift fro& r"ral

to "rban( $hile the #o&&er#ial banks( fro& "rban to r"ral. ,o-operati%e

banks are perhaps the first go%ern&ent sponsored( go%ern&ent-s"pported(

and go%ern&ent-s"bsidized finan#ial agen#y in India. They get finan#ial and

other help fro& the eser%e ank of India N++( #entral go%ern&ent

and state go%ern&ents. They #onstit"te the 6&ost fa%o"red7 banking se#tor

$ith risk of nationalization. Dor #o&&er#ial banks( the eser%e ank of

India is lender of last resort( b"t #o-operati%e banks it is the lender of first

resort $hi#h pro%ides finan#ial reso"r#es in the for& of #ontrib"tion to the

initial #apital thro"gh state go%ern&ent)( $orking #apital( refinan#e.

,o-operati%e anks belong to the &oney &arket as $ell as to the

#apital &arket. Pri&ary agri#"lt"ral #redit so#ieties pro%ide short ter& and

&edi"& ter& loans. and e%elop&ent anks s) pro%ide long-ter&

loans. S,s and ,,s also pro%ide both short ter& and ter& loans. ,o-

operati%e banks are finan#ial inter&ediaries only partially. The so"r#es of

their f"nds reso"r#es) are a) #entral and state go%ern&ent( b) the eser%e

ank of India and N++( #) other #o-operati%e instit"tions( d)

o$nership f"nds and( e) deposits or debent"re iss"es. It is interesting to note

that intra-se#toral flo$s of f"nds are &"#h greater in #o-operati%e banking

than in #o&&er#ial banking. Inter-bank deposits( borro$ings( and #redit




fro& a signifi#ant part of assets and liabilities of #o-operati%e banks. This

&eans that intra-se#toral #o&petition is absent and intra-se#toral integration

is high for #o-operati%e bank.

So&e #o-operati%e banks are s#hed"led banks( $hile others are

non-s#hed"led banks. Dor instan#e( S,s and so&e L,s are s#hed"led

banks b"t other #o-operati%e bank are non-s#hed"led banks. +t present( 2/

S,s and 11 L,s $ith e&and and Ti&e iabilities o%er s 95 #rore ea#h

in#l"ded in the Se#ond S#hed"le of the eser%e ank of India +#t.

,o-operati%e anks are s"b*e#t to , and li:"idity

re:"ire&ents as other s#hed"led and non-s#hed"led banks are. 'o$e%er(

their re:"ire&ents are less than #o&&er#ial banks. Sin#e 10<< the lending

and deposit rate of #o&&er#ial banks ha%e been dire#tly reg"lated by the

eser%e ank of India. +ltho"gh the eser%e ank of India had po$er to

reg"late the rate #o-operati%e bank b"t this ha%e been eer#ised only after

10A0 in respe#t of non-agri#"lt"ral ad%an#es they $ere free to #harge any

rates at their dis#retion. +ltho"gh the &ain ai& of the #o-operati%e bank is to

pro%ide #heaper #redit to their &e&bers and not to &ai&ize profits( they

&ay a##ess the &oney &arket to i&pro%e their in#o&e so as to re&ain %iable.




III. PRODUCTS AND SERVICES . PRODUCTS AND SERV CES

OFFERED BY BANKSFFERED BY BANKS

• road ,lassifi#ation of Prod"#ts in a bank!

The different prod"#ts in a bank #an be broadly #lassified into!

etail anking.

Trade Dinan#e.

Treas"ry ?perations.

etail anking and Trade finan#e operations are #ond"#ted at the bran#h

le%el $hile the $holesale banking operations( $hi#h #o%er treas"ry

operations( are at the hand offi#e or a designated bran#h.

etail anking!

eposits

oans( ,ash ,redit and ?%erdraft




Negotiating for oans and ad%an#es

e&ittan#es

ook-Geeping &aintaining all a##o"nting re#ords)

e#ei%ing all kinds of bonds %al"able for safe keeping.

Trade Dinan#e!

Iss"ing and #onfir&ing of letter of #redit.

ra$ing( a##epting( dis#o"nting( b"ying( selling( #olle#ting of bills of

e#hange( pro&issory notes( drafts( bill of lading and other se#"rities.

Treas"ry ?perations!

"ying and selling of b"llion. Doreign e#hange

+#:"iring( holding( "nder$riting and dealing in shares( debent"res(

et#.

P"r#hasing and selling of bonds and se#"rities on behalf of

#onstit"ents.




The banks #an also a#t as an agent of the 8o%ern&ent or lo#al

a"thority. They ins"re( g"arantee( "nder$rite( parti#ipate in &anaging and

#arrying o"t iss"e of shares( debent"res( et#.

+part fro& the abo%e-&entioned f"n#tions of the bank( the bank

pro%ides a $hole lot of other ser%i#es like in%est&ent #o"nseling for

indi%id"als( short-ter& f"nds &anage&ent and portfolio &anage&ent for

indi%id"als and #o&panies. It "ndertakes the in$ard and o"t$ard

re&ittan#es $ith referen#e to foreign e#hange and #olle#tion of %aried types

for the 8o%ern&ent.

• ,o&&on anking Prod"#ts +%ailable!

So&e of #o&&on a%ailable banking prod"#ts are eplained belo$!

,redit ,ard ! ,redit ,ard is 6post paid7 or 6pay later7 #ard that

dra$s fro& a #redit line-&oney &ade a%ailable by the #ard iss"er bank) and

gi%es one a gra#e period to pay. If the a&o"nt is not paid f"ll by the end of the

period( one is #harged interest.




+ #redit #ard is nothing b"t a %ery s&all #ard #ontaining a &eans of

identifi#ation( s"#h as a signat"re and a s&all photo. It a"thorizes the holder

to #hange goods or ser%i#es to his a##o"nt( on $hi#h he is billed. The bank

re#ei%es the bills fro& the &er#hants and pays on behalf of the #ard holder.

These bills are asse&bled in the bank and the a&o"nt is paid to the bank by

the #ard holder totally or by install&ents. The bank #harges the #"sto&er a

s&all a&o"nt for these ser%i#es. The #ard holder need not ha%e to #arry

&oney#ash $ith hi& $hen he tra%els or goes for p"r#hasing.

,redit #ards ha%e fo"nd $ide spread a##eptan#e in the M&etros=

and big #ities. ,redit #ards are *oining

pop"larity for online pay&ents. The &a*or

players in the ,redit ,ard &arket are the

foreign banks and so&e big p"bli# se#tor banks

like SI and ank of aroda. India at present

has abo"t 3 &illion #redit #ards in #ir#"lation.

ebit ,ards! ebit ,ard is a 6prepaid7 or 6pay no$7 #ard $ith so&e

stored%al"e. ebit ,ards :"i#kly debit or s"btra#t &oney fro& one=s sa%ings

a##o"nt( or if one $ere taking o"t #ash.

E%ery ti&e a person "ses the #ard( the &er#hant $ho in t"rn #an

get the &oney transferred to his a##o"nt fro& the bank of the b"yers( by

debiting an ea#t a&o"nt of p"r#hase fro& the #ard. To get a debit #ard

along $ith a Personal Identifi#ation N"&ber PIN).




>hen he &akes a p"r#hase( he enters this n"&ber on the shop=s

PIN pad. >hen the #ard is s$iped thro"gh the ele#troni# ter&inal( it dials the

a#:"iring bank syste& J either aster ,ard or @isa that %alidates the PIN

and finds o"t fro& the iss"ing bank $hether to a##ept or de#line thetransa#tion. The #"sto&er ne%er o%erspread be#a"se the a&o"nt spent is

debited i&&ediately fro& the #"sto&ers a##o"nt. So( for the debit #ard to

$ork( one &"st already ha%e the &oney in the a##o"nt to #o%er the

transa#tion. There is no gra#e period for a debit

#ard p"r#hase. So&e debit #ards ha%e &onthly or

per transa#tion fees.

ebit ,ard holder need not #arry a

b"lky #he#kbook or large s"&s of #ash $hen heshe goes at for shopping. This

is a fast and easy $ay of pay&ent one #an get

debit #ard fa#ility as debit #ards "se one=s o$n

&oney at the ti&e of sale( so they are often easier

than #redit #ards to obtain.

The &a*or li&itation of ebit ,ard is that #"rrently only so&e

3555-4555 shops #o"ntry $ide a##epts it. +lso( a person #an=t operate it in

#ase the telephone lines are do$n.

+"to&ati# Teller a#hine! The introd"#tion of +T=s has gi%en the

#"sto&ers the fa#ility of ro"nd the #lo#k banking. The +T=s are "sed by

banks for &aking the #"sto&ers dealing easier. +T #ard is a de%i#e that

allo$s #"sto&er $ho has an +T #ard to perfor& ro"tine banking

transa#tion at any ti&e $itho"t intera#ting $ith h"&an teller. It pro%ides

e#hange ser%i#es. This ser%i#e helps the #"sto&er to $ithdra$ &oney e%en

$hen the banks ate #losed. This #an be done by inserting the #ard in the +T

and entering the Personal Identifi#ation N"&ber and se#ret Pass$ord.




+T=s are #"rrently be#o&ing pop"lar in India that enables the

#"sto&er to $ithdra$ their &oney 24 ho"rs a day and 3<9 days. It pro%ides

the #"sto&ers $ith the ability to $ithdra$ or deposit f"nds( #he#k a##o"nt

balan#es( transfer f"nds and #he#k state&ent infor&ation. The ad%antages of+T=s are &any. It in#reases eisting b"siness and generates ne$ b"siness. It

allo$s the #"sto&ers.

To transfer &oney to and fro& a##o"nts.

To %ie$ a##o"nt infor&ation.

To order #ash.

To re#ei%e #ash

• +d%antages of +T=s!

To the ,"sto&ers-

+T=s pro%ide 24 hrs. A days and 3<9 days a year ser%i#e.

Ser%i#e is :"i#k and effi#ient

Pri%a#y in transa#tion




>ider fleibility in pla#e and ti&e of $ithdra$als.

The transa#tion is #o&pletely se#"re J yo" need to key in Personal

Identifi#ation N"&ber Lni:"e n"&ber for e%ery #"sto&er).

No$ a days #an be "se any of the bank=s +T

To The anks-

+lternati%e to etend banking ho"rs.

,ro$ding at bank #o"nters #onsiderably red"#ed.

+lternati%e to ne$ bran#hes and to red"#e operating epenses.

elie%es bank e&ployees to fo#"s an &ore analyti#al and inno%ati%e

$ork.

In#reased &arket penetration.

+T=s #an be installed any$here like +irports( ail$ay Stations( Petrol

P"&ps( ig "siness ar#ades( &arkets( et#. 'en#e( it gi%es easy a##ess to the

#"sto&ers( for obtaining #ash.

The +T ser%i#es pro%ided first by the foreign banks like ,itibank( 8rind

lays bank and no$ by &any pri%ate and p"bli# se#tor banks in India like

I,I,I ank( 'D, ank( SI( LTI ank et#. The I,I,I has la"n#hed +T

Ser%i#es to its #"sto&ers in all the etropolitan ,ities in India. y the end of

1005 Indian Pri%ate anks and p"bli# se#tor banks ha%e #o&e "p $ith their

o$n +T Net$ork in the for& of 6S>+'+N7. ?%er the past year "pto 44

banks in "&bai( @ashi and Thane( ha%e be#a&e a part of 6S>+'+N7 a




syste& of shared pay&ents net$orks( introd"#ed by the Indian ank

+sso#iation I+).

E-,hea:"es ! The e-#hea:"es #onsists fi%e pri&ary fa#ts. They are

the #ons"&ers( the &er#hant( #ons"&er=s bank the &er#hant=s bank and the

e-&int and the #learing pro#ess. This #hea:"ring syste& "ses the net$ork

ser%i#es to iss"e and pro#ess pay&ent that e&"lates real $orld #ha:"ing. The

payers iss"e a digital #hea:"es to the payee ant the entire transa#tions are

done thro"gh internet. Ele#troni# %ersion of #hea:"es are iss"ed( re#ei%ed

and pro#essed. + typi#al ele#troni# #he:"e transa#tion takes pla#e in the

follo$ing &anner!

The #"sto&er a##esses the &er#hant ser%er and the &er#hant ser%er

presents its goods to the #"sto&er.

The #ons"&er sele#ts the goods and p"r#hases the& by sending an e-

#he:"e to the &er#hant.

The &er#hant %alidates the e-#he:"e $ith its bank for pay&ent

a"thorisation.

The &er#hant ele#troni#ally for$ards the e-#he:"e to its bank.

The &er#hant=s bank for$ards the e-#he:"e to the #learing ho"se for

#ashing.

The #learing ho"se *ointly $orks $ith the #ons"&er=s bank #lears the

#he:"e and transfers the &oney to the &er#hant=s banks.

The &er#hant=s bank "pdates the &er#hant=s a##o"nt.




The #ons"&er=s bank "pdates the #ons"&er=s a##o"nt $ith the

$ithdra$al infor&ation.

The e-#he:"ing is a great boon to big #orporate as $ell as s&all retailers.

ost &a*or banks a##ept e-#he:"es. Th"s this syste& offers se#"re &eans of

#olle#ting pay&ents( transferring %al"e and &anaging #ash flo$s.

Ele#troni# D"nds Transfer EDT) ! any &odern banks ha%e

#o&p"terised their #he:"e handling pro#ess $ith #o&p"ter net$orks and

other ele#troni# e:"ip&ents. These banks are dispensing $ith the "se of

paper #he:"es. The syste& #alled ele#troni# f"nd transfer EDT)

a"to&ati#ally transfers &oney fro& one a##o"nt to another. This syste&

fa#ilitates speedier transfer of f"nds ele#troni#ally fro& any bran#h to any

other bran#h. In this syste& the sender and the re#ei%er of f"nds &ay be

lo#ated in different #ities and &ay e%en bank $ith different banks. D"nds

transfer $ithin the sa&e #ity is also per&itted. The s#he&e has been in

operation sin#e Debr"ary A( 100<( in India.

The other i&portant type of fa#ility in the EDT syste& is a"to&ated #learing

ho"ses. These are the #o&p"ter #enters that handle the bills &eant for

deposits and the bills &eant for pay&ent. In big #o&panies pay is not

disb"rsed by iss"ed #he:"es or iss"ing #ash. The pay&ent offi#e dire#ts the

#o&p"ter to #redit an e&ployee=s a##o"nt $ith the person=s pay.




Telebanking! Telebanking refers to

banking on phone ser%i#es. + #"sto&er #an a##ess

infor&ation abo"t hisher a##o"nt thro"gh a

telephone #all and by gi%ing the #oded Personal

Identifi#ation N"&ber PIN) to the bank. Telebanking is etensi%ely "ser

friendly and effe#ti%e in nat"re.

To get a parti#"lar $ork done thro"gh the bank( the "sers &ay lea%e

his instr"#tions in the for& of &essage $ith bank.

Da#ility to stop pay&ent on re:"est. ?ne #an easily kno$ abo"t the

#he:"e stat"s.

Infor&ation on the #"rrent interest rates.

Infor&ation $ith regard to foreign e#hange rates.

e:"est for a or pay order.

-at +##o"nt related ser%i#es.

+nd other si&ilar ser%i#es.




obile anking! + ne$ re%ol"tion in the real& of e-banking is

the e&ergen#e of &obile banking. ?n-line banking is no$ &o%ing to the

&obile $orld( gi%ing e%erybody $ith a &obile phone a##ess to real-ti&e

banking ser%i#es( regardless of their lo#ation. "t there is &"#h &ore to

&obile banking fro& *"st on-lie banking. It pro%ides a ne$ $ay to pi#k "p

infor&ation and intera#t $ith the banks to #arry o"t the rele%ant banking

b"siness. The potential of &obile banking is li&itless and is epe#ted to be a

big s"##ess. ooking and paying for tra%el and e%en ti#kets is also epe#ted to

be a gro$th area.

+##ording to this syste&( #"sto&er #an a##ess a##o"nt details on

&obile "sing the Short essaging Syste& SS) te#hnology< $here sele#t

data is p"shed to the &obile de%i#e.

The $ireless appli#ation proto#ol >+P) te#hnology( $hi#h $ill allo$ "ser to

s"rf the net on their &obiles to a##ess anything and e%erything. This is a %ery

fleible $ay of transa#ting banking b"siness.

+lready I,I,I and 'D, banks ha%e tied "p #ell"lar

ser%i#e pro%ides s"#h as +irtel( ?range( Sky ,ell( et#. in

elhi and "&bai to offer these &obile banking ser%i#es

to their #"sto&ers.

Internet anking! Internet banking in%ol%es "se of internet for

deli%ery of banking prod"#ts and ser%i#es. >ith internet banking is no$ no

longer #onfir&ed to the bran#hes $here one has to approa#h the bran#h in

person( to $ithdra$ #ash or deposits a #he:"e or re:"est a state&ent of




a##o"nts. In internet banking( any in:"iry or transa#tion is pro#essed online

$itho"t any referen#e to the bran#h any$here banking) at any ti&e.

The Internet banking no$ is &ore of a nor&al rather than an

e#eption d"e to the fa#t that it is the #heapest $ay of pro%iding banking

ser%i#es. +s indi#ated by #Ginsey C"arterly resear#h( presently traditional

banking #osts the banks( &ore than a dollar per person( +T banking #osts

2A #ents and internet banking #osts belo$ 4 #ents approi&ately. I,I,I bank

$as the first one to offer Internet anking in India.

• enefits of Internet anking!

ed"#e the transa#tion #osts of offering se%eral banking ser%i#es and

di&inishes the need for longer n"&bers of epensi%e bri#k and &ortar

bran#hes and staff.

In#rease #on%enien#e for #"sto&ers( sin#e they #an #ond"#t &any

banking transa#tion 24 ho"rs a day.

In#rease #"sto&er loyalty.

I&pro%e #"sto&er a##ess.

+ttra#t ne$ #"sto&ers.

Easy online appli#ation for all a##o"nts( in#l"ding personal loans and

&ortgages.

• Dinan#ial Transa#tion on the Internet!




Ele#troni# ,ash! ,o&panies are de%eloping ele#troni# repli#as of all

eisting pay&ent syste&! #ash( #he:"e( #redit #ards and #oins.

+"to&ati# Pay&ents! Ltility #o&panies( loans pay&ents( and other

b"sinesses "se on a"to&ati# pay&ent syste& $ith bills paid thro"gh dire#t

$ithdra$al fro& a bank a##o"nt.

ire#t eposits! Earnings or 8o%ern&ent pay&ents) a"to&ati#ally

deposited into bank a##o"nts( sa%ing ti&e( effort and &oney.

Stored @al"e ,ards! Prepaid #ards for telephone ser%i#e( transit

fares( high$ay tolls( la"ndry ser%i#e( library fees and s#hool l"n#hes.

Point of Sale transa#tions! +##eptan#e of +T,he:"e at retail

stores and resta"rants for pay&ent of goods and ser%i#es. This syste& has

&ade f"n#tioning of the sto#k arket %ery s&ooth and effi#ient.

,yber anking! It refers to banking thro"gh online ser%i#es. anks

$ith $eb site 6,yber7 bran#hes allo$ed #"sto&ers to #he#k balan#es( pay

bills( transfer f"nds( and apply for loans on the Internet.

e&at ! e&at is short for de-&aterialisation of shares. In short(

e&at is a pro#ess $here at the #"sto&er=s re:"est the physi#al sto#k is

#on%erted into ele#troni# entries in the depository syste&.

In ;an"ary 100/ SEI Se#"rities and E#hange oard of India)

initiated E+T +,,?LNT+N,K Syste& to reg"late and to i&pro%e sto#k

in%esting. +s on date( to trade on shares it has be#o&e #o&p"lsory to ha%e a

share de&at a##o"nt and all trades take pla#e thro"gh de&at.

• 'o$ to ?perate E+T +,,?LNT




?ne needs to open a e&at +##o"nt $ith any of the bran#hes of

the bank. +fter opening an a##o"nt $ith any bank( by filling the de&at

re:"est for& one #an hando%er the se#"rities. The rest $ill be taken #are by

the bank and the #"sto&er $ill re#ei%e #redit of shares as soon as it is#onfir&ed by the ,o&panyegister and Transfer +gent. There is no

physi#al &o%e&ent of share #ertifi#ation any &ore. +ny b"ying or selling of

shares is done %ia ele#troni# transfers.

I. If the in%estor $ants to sell his shares( he has to pla#e an order

$ith his broker and gi%e a 6eli%ery Instr"#tion7 to his P

epository Parti#ipant). The P $ill debit hi s a##o"nt $ith the

n"&ber of shares sold by hi&.

II. If one $ants to b"y shares( he has to infor& his broker abo"t his

epository +##o"nt N"&ber so that the shares bo"ght by hi&

are #redited in to his a##o"nt.

III. Pay&ent for the ele#troni# shares bo"ght or sold is to be &ade in

the sa&e $ay as in the #ase of physi#al se#"rities.

IV.V. BANKINGANK NG

SERVICES.ERV CES.

anking #o%ers so &any ser%i#es that it is diffi#"lt to define it.

'o$e%er( these basi# ser%i#es ha%e al$ays been re#ognized as the hall&ark of

the gen"ine banker. These areO

The re#eipt of the #"sto&er=s deposits




The #olle#tion of his #he:"es dra$n on other banks

The pay&ent of the #"sto&er=s #he:"es dra$n on hi&self

• There are other %ario"s types of banking ser%i#es like!

1. +d%an#es J ?%erdraft( ,ash ,redit( et#.

2. eposits J Sa%ing +##o"nt( ,"rrent +##o"nt( et#.

3. Dinan#ial Ser%i#es J ill dis#o"nting et#.

4. Doreign Ser%i#es J Pro%iding foreign #"rren#y( tra%elers #he:"es( et#.

9. oney Trans&ission J D"nds transfer et#.

<. Sa%ings J Died deposits( et#.

A. Ser%i#es of pla#e or ti&e J +T Ser%i#es.

/. Stat"s J ebit ,ards( ,redit ,ards( et#.

• ,"sto&er Ser%i#es in ,o&&er#ial anks!

,"sto&er ser%i#e is the ser%i#e pro%ided in s"pport of a bank=s

#ore prod"#ts. ,"sto&er ser%i#e often in#l"des ans$ering :"estionsH handling

#o&plaints. ,"sto&er ser%i#e #an o##"r on site as $hen an onstage e&ployee




helps a #"sto&er or ans$ers a :"estion) or it #an o##"r o%er the phone or the

Internet. C"ality #"sto&er ser%i#e is essential to b"ilding #ordial #"sto&er

relationship.

anking being a ser%i#e ind"stry( a lot depends on effi#ient and

pro&pt #"sto&er ser%i#e. ,"sto&er ser%i#e is the &ost i&portant d"ty of the

banking operations. Pro&pt and effi#ient ser%i#e $ith s&ile $ill de%elop good

p"bli# relations red"#e #o&plaints and in#rease b"siness.

• >hy is ,"sto&er Ser%i#e I&portant

,hanging #"sto&er epe#tations! Today the #"sto&er is &ore

de&anding and &ore sophisti#ated than he or she $as thirty years ago.

The in#reased i&portan#e of #"sto&er ser%i#e! >ith #hanging

#"sto&er epe#tations( #o&petitors are seeing #"sto&er ser%i#e as a

#o&petiti%e $eapon $ith $hi#h they differentiate their prod"#ts and ser%i#es.

The need for a relationship strategy! To ens"re that a #"sto&er

ser%i#e strategy that $ill #reate a %al"e preposition for #"sto&ers sho"ld be

for&"lated i&ple&ented and #ontrolled. It is ne#essary to gi%e it a #entral

role and not one that is s"bs"&ed in the %ario"s ele&ents of the &arketing

&i.

The #"sto&er is the kingpi& in gro$th organizations like

#o&&er#ial banks. ?nly those instit"tions $hi#h $ork a##ording to hisdi#tates $ill flo"rish. C"ality( ,onsisten#y and "rability at lo$ pri#e are the

final epe#tations of a #"sto&er. C"ality $ill ha%e to be "na&big"o"s( of

$orld #lass :"ality. C"ality #annot be of &ini&"& a##eptable standards.




,"sto&er responsi%eness &"st be :"i#k and also #o&petent. Speed(

perfor&an#e and #ost $ill be the ne$ %al"es 6&antra7 for s"##ess.

The ten key areas of #"sto&er=s ser%i#es to be attended ti&ely

and reg"larly are!

1. S"b&ission of state&ent of +,s to #"sto&ers

2. Lpdating of sa%ings pass books.

3. Teller syste& effi#ien#y.

4. ,leanliness and Lpkeep of pre&ises.

9. Inter&ediate ,redit for instit"tion #he:"esland bills.

<. +d%an#e inti&ation to #"sto&ers for re$ards of Ter& eposits

e#eipts on &at"rity.

A. +d%an#e for ebit#redit to a##o"nts.

/. P"n#t"ality of staff.

0. 'andling of #o&plaint register.

15. aintain a #o&plaint register.

,"sto&er=s dissatisfa#tion in the banking ind"stry is neither

re#ent nor "nkno$n. This is &ainly d"e to delays in handling transa#tions

a#ross the #o"nter in #olle#tions( "pdate of passbooks s"pply of state&ents of

a##o"nts( et#.

Dail"re to pro%ide pro&pt and effi#ient #"sto&er ser%i#e is likely

to lead to red"#tion in the n"&ber of #"sto&ers and they &ay ha%e to fa#e




#los"re. To e%ent s"#h sit"ation the follo$ing i&pro%e&ents in the #"sto&er

ser%i#es &ay be #arried o"t!

1. Personal relations of the bank e&ployee $ith #"sto&ers $ill i&pro%e

#"sto&er satisfa#tion. 1 ser%i#e $ith s&ile sho"ld be the &otto of e%ery

bank e&ployee.

2. apid #"sto&er ser%i#es sho"ld be pro%ided thro"gh a"to&ation of

$ork and si&plifi#ation of pro#ed"res.

3. +T=s &ay be introd"#ed in all the bran#hes of the banks( based "ponthe %ol"&e of transa#tions. This shall fa#ilitate non-stop banking.

4. ,redit ,ards Ser%i#es( ebit ,ard Ser%i#es( $hi#h sho"ld be pro%ided

to the #"sto&ers( &"st a link ser%i#e $ith all the banks and bran#hes if

possible to fa#ilitate the #"sto&er and the b"siness organizations.

9. E-&ail ser%i#e &ade freely a%ailable at all banking #enters.

<. Doreign E#hange transa#tions are to be etended to all the bran#hes

to fa#ilitate trade and ind"stries.

A. +ll the #"sto&ers are not ho&ogeno"s in their needs. 'en#e need based

s#he&es &ay be introd"#ed.

/. Totally dereg"lated interest rate str"#t"re sho"ld be there.

0. The banking staff &"st be trained to "nderstand the #"sto&er=s

psy#hology( so they &ay pro%ide #"sto&er ser%i#e in a :"alified

&anner.




15. Ed"#ating the #"sto&ers $ill in#reases better "tilization of banking

ser%i#es.

V.BANK MARKETING:.BANK MARKET NG:The banking b"siness is essentially other people=s &oney and

banker=s brain. The se#ret of its s"##ess lies in satisfying #"sto&er needs for

$hi#h the banks ha%e to redis#o%er the &arketing #&o#ept.

It is right to &ention that bank &arketing is a &anagerial

pro#ess by $hi#h ser%i#es are &at#hed $ith &arkets. The &at#hing of

ser%i#es $ith &arket is &eant for&"lation of o%erall &arketing strategies

$hi#h s"it the taste( te&pera&ent( needs and re:"ite&ents of #"sto&ers.

In %ie$ of the abo%e( &arketing of banking ser%i#es is #on#erned

$ith prod"#t( pro&otion( pri#ing( and pla#e. In addition( it is also #on#erned

$ith people( pro#ess and physi#al appearan#e.




vi.Objectives ! B"#$i.Objectives ! B"#$

M"%$eti#&:"%$eti#&:

1) Profitability

2) Pro%iding high ret"rn on in%est&ent

3) +#hie%ing #ertain &arket sharegro$th

4) e%elop&ent of an i&age

9) e%eloping ne$ prod"#ts to &eet e&erging #"sto&er re:"ire&ents.

<) In#rease in deposits and loans

A) ire#ting #"sto&ers to #ertain prod"#ts

/) In#reasing a$areness

0) In#reasing #"sto&er base thro"gh

greater #"sto&er satisfa#tion.




II! "#$% #& IN&#"M'TI#NII! "#$% #& I &#"M'TI#

T%(HN#$#)* +IT, IN TH% B'N-IN)%(H #$#)* +IT, I TH% B' -I )

S%(T#"!%(T#"!

anking en%iron&ent has be#o&e highly #o&petiti%e today. To

be able to s"r%i%e and gro$ in the #hanging &arket en%iron&ent banks are

going for the latest te#hnologies( $hi#h is being per#ei%ed as an Menabling

reso"r#e= that #an help in de%eloping learner and &ore fleible str"#t"re that

#an respond :"i#kly to the dyna&i#s of a fast #hanging &arket s#enario. It is

also %ie$ed as an instr"&ent of #ost red"#tion and effe#ti%e #o&&"ni#ation

ethi# people and instit"tions asso#iated $ith the banking b"siness.

The Soft$are Pa#kages for anking +ppli#ations in India had

their beginnings in the &iddle of /5s( $hen the anks started #o&p"terising

the bran#hes in a li&ited &anner. The early

05s sa$ the pl"&&eting hard$are pri#es and

ad%ent of #heap and inepensi%e b"t high

po$ered P,=s and Ser%i#es and banks $ent in

for $hat $as #alled Total ran#h +"to&ation

T+) pa#kages. The &iddle and late 05s

$itnessed the tornado of finan#ial refor&s(




dereg"lation globalisation et#. #o"pled eith rapid re%ol"tion in

#o&&"ni#ation te#hnologies and e%ol"tion of no%el #on#ept of #on%ergen#e of

#o&&"ni#ation te#hnologies( like internet( &obile#ell phones et#. Te#hnology

has #ontin"o"sly played on i&portant role in the $orking of bankinginstit"tions and the ser%i#es pro%ided by the&. Safekeeping of p"bli# &oney(

transfer of &oney( iss"ing drafts( eploring in%est&ent opport"nities and

lending drafts( eploring in%est&ent being pro%ided.

Infor&ation Te#hnology enables sophisti#ated prod"#t

de%elop&ent( better &arket infrastr"#t"re( i&ple&entation of reliable

te#hni:"es for #ontrol of risks and helps the finan#ial inter&ediaries to rea#h

geographi#ally distant and di%ersified &arkets. Internet has signifi#antly

infl"en#ed deli%ery #hannels of the banks. Internet has e&erged as an

i&portant &edi"& for deli%ery of banking prod"#ts and ser%i#es.

The #"sto&ers #an %ie$ the a##o"ntsH get a##o"nt state&ents(

transfer f"nds and p"r#hase drafts by *"st p"n#hing on fe$ keys. The s&art

#ard=s i.e.( #ards $ith &i#ro pro#essor #hip ha%e added ne$ di&ension to the

s#enario. +n introd"#tion of M,yber ,ash= the e#hange of #ash takes pla#e

entirely thro"gh M,yber-books=. ,olle#tion of Ele#tri#ity bills and telephone

bills has be#o&e easy. The "pgradeability and fleibility of internet

te#hnology after "npre#edented opport"nities for the banks to rea#h o"t to its

#"sto&ers. No do"bt banking ser%i#es ha%e "ndergone drasti# #hanges and so

also the epe#tation of #"sto&ers fro& the banks has in#reased greater.

IT is in#reasingly &o%ing fro& a ba#k offi#e f"n#tion to a pri&e

assistant in in#reasing the %al"e of a bank o%er ti&e. IT does so by

&ai&izing banks of pro-a#ti%e &eas"res s"#h as strengthening and




standardising banks infrastr"#t"re in respe#t of se#"rity( #o&&"ni#ation and

net$orking( a#hie%ing inter bran#h #onne#ti%ity( &o%ing to$ards eal Ti&e

gross settle&ent T8S) en%iron&ent the fore#asting of li:"idity by b"ilding

real ti&e databases( "se of agneti# Ink ,hara#ter e#ognition and I&agingte#hnology for #he:"e #learing to na&e a fe$. Indian banks are going for the

retail banking in a big $ay.

The key dri%er to #harge has largely been the in#reasing

sophisti#ation in te#hnology and the gro$ing pop"larity of the Internet. The

shift fro& traditional banking to e-banking is #hanging #"sto&er=s

epe#tations.

• E-anking!

E-banking &ade its deb"t in LG and LS+ 1025s. It be#o&es

pro&inently pop"lar d"ring 10<5( thro"gh ele#troni# f"nds transfer and

#redit #ards. The #on#ept of $eb-based baking #a&e into eisten#e in

Ethiopia and LS+ in the beginning of 10/5.

In India e-banking is of re#ent origin. The traditional &odel for

gro$th has been thro"gh bran#h banking. ?nly in the early 1005s has there

been a start in the non-bran#h banking ser%i#es. The ne$ pri%ate se#tor

banks and the foreign banks are handi#apped by the la#k of a strong bran#h

net$ork in #o&parison $ith the p"bli# se#tor banks. In the absen#e of s"#hnet$orks( the &arket pla#e has been the e&ergen#e of a lot of inno%ati%e

ser%i#es by these players thro"gh dire#t distrib"tion strategies of non-bran#h

deli%ery. +ll these banks are "sing ho&e banking as a key 6p"ll= fa#tor to

re&o%e #"sto&ers a$ay fro& the $ell entered p"bli# se#tor banks.




any banks ha%e &odernized their ser%i#es $ith the fa#ilities of

#o&p"ter and ele#troni# e:"ip&ents. The ele#troni#s re%ol"tion has &ade it

possible to pro%ide ease and fleibility in banking operations to the benefit of

the #"sto&er. The e-banking has &ade the #"sto&er say good-bye to h"gea##o"nt registers and large paper bank a##o"nts. The e-banks( $hi#h &ay

#all as easy bank offers the follo$ing ser%i#es to its #"sto&ers!

,redit ,ards J ebit ,ards

+T

E-,he:"es

EDT Ele#troni# D"nds Transfer)

-+T +##o"nts

obile anking

Telephone anking

Internet anking

EI Ele#troni# ata Inter#hange)

• enefits of E-banking!

To the ,"sto&er!-




+ny$here anking no &atter $here%er the #"sto&er is in

the $orld. alan#e en:"iry( re:"est for ser%i#es( iss"ing instr"#tions et#.(

fro& any$here in the $orld is possible.

+nyti&e anking J anaging f"nds in real ti&e and &ost

i&portantly( 24 ho"rs a day( Adays a $eek.

,on%enien#e a#ts as a tre&endo"s psy#hologi#al benefit

all the ti&e.

rings do$n 6,ost of anking7 to the #"sto&er o%er a

period a period of ti&e.

,ash $ithdra$al fro& any bran#h +T

?n-line p"r#hase of goods and ser%i#es in#l"ding online

pay&ent for the sa&e.

To the ank!

Inno%ati%e( s#he&e( addresses #o&petition

and present the bank as te#hnology dri%en in the banking se#tor &arket

ed"#es #"sto&er %isits to the bran#h and

thereby h"&an inter%ention




Inter-bran#h re#on#iliation is i&&ediate

thereby red"#ing #han#es of fra"d and &isappropriation

?n-line banking is an effe#ti%e &edi"& of

pro&otion of %ario"s s#he&es of the bank( a &arketing tool indeed.

Integrated #"sto&er data pa%es $ay for

indi%id"alized and #"sto&ized ser%i#es

• I&pa#t of IT on the

Ser%i#e C"ality!-

The &ost %isible i&pa#t of

te#hnology is refle#ted in the $ay

the banks respond strategi#ally




for &aking its effe#ti%e "se for effi#ient ser%i#e deli%ery. This i&pa#t on

ser%i#e :"ality #an be s"&&ed "p as belo$!

>ith a"to&ation( ser%i#e no longer re&ains a &arketing edge $ith the

large banks only. S&all and relati%ely ne$ banks $ith li&ited net$ork of

bran#hes be#o&e better pla#ed to #o&pete $ith the established banks( by

integrating IT in their operations.

The te#hnology has #o&&oditising so&e of the finan#ial ser%i#es.

Therefore the banks #annot take a lifeti&e relationship $ith the #"sto&ers as

granted and they ha%e to $ork #ontin"o"sly to foster this relationship and

retain #"sto&er loyalty.

The te#hnology on one hand ser%es as a po$erf"l tool for #"sto&er

ser%i#ing( on the other hand( it itself res"lts in depersonalising of the banking

ser%i#es. This has an ad%erse effe#t on relationship banking. + de#ade of

#o&p"terization #an probably ne%er s"bstit"te a si&ple or a $ar&

handshake.

In order to red"#e ser%i#e deli%ery #ost( banks need to a"to&ate

ro"tine #"sto&er in:"iries thro"gh self-ser%i#e #hannels. To do this they need

to in%est in #all #enters( kiosks( +T=s and Internet anking today re:"ire

IT infrastr"#t"re integrated $ith their b"siness strategy to be #"sto&er

#entri#.

• I&pa#t of IT

on anking Syste&!




The banking syste& is slo$ly shifting fro& the Traditional

banking to$ards relationship banking. Traditionally the relationship bet$een

the bank and its #"sto&ers has been on a one-to-one le%el %ia the bran#h

net$ork. This $as p"t into operation $ith #learing and de#ision &akingresponsibilities #on#entrated at the indi%id"al bran#h le%el. The head offi#e

had responsibility for the o%erall #learing net$ork( the size of the bran#h

net$ork and the training of staff in the bran#h net$ork. The bank &onitored

the organisation=s perfor&an#e and set the de#ision &aking para&eters( b"t

the infor&ation a%ailable to both bran#h staff and their #"sto&ers $as

li&ited to one geographi#al lo#ation.

• Traditional anking

Se#tor-




The &odern bank #annot rely on its bran#h net$ork alone.

,"sto&ers are no$ de&anding ne$( &ore #on%enient( deli%ery syste&s( and

ser%i#es s"#h as Internet banking ha%e a d"al role to the #"sto&er. They

pro%ide traditional banking ser%i#es( b"t additionally offer &"#h greater

a##ess to infor&ation on their a##o"nt stat"s and on the bank=s &any other

ser%i#es. To do this banks ha%e to #reate a##o"nt infor&ation layers( $hi#h

#an be a##essed both by the bank staff as $ell as by th #"sto&ers the&sel%es.

The "se of intera#ti%e ele#troni# links %ia the Internet #o"ld go a

ling $ay in pro%iding the #"sto&ers $ith greater le%el of infor&ation abo"t

both their o$n finan#ial sit"ation and abo"t the ser%i#es offered by the bank.

• The Ne$ elationship ?riented ank-

C&S,O+ C&S,O+ C&S,O+

B$N B$NC/ B$N B$NC/ B$N B$NC/

C"$*N0 DC*S*ON C"$*N0 DC*S*ON C"$*N0 DC*S*ON

,ENT+ ,E+IN8 'E+ ?DDI,E




• I&pa#t of IT on Pri%a#y and ,onfidentiality of ata!

C&S,O+

,"P/ON1 B$NC/1 "C,ON*C B$N*N01 etc

S/$D *NO+$,*ON

C"$*N0 S3S,+ /$D O*C *S +ON*,O**N0




ata being stored in the #o&p"ters( is no$ being displayed $hen

re:"ired on thro"gh internet banking &obile banking( +T=s et#. all this has

gi%en raise to the iss"es of pri%a#y and #onfidentially of data are!

The data pro#essing #apabilities of the #o&p"ter( parti#"larly the rapid

thro"ghp"t( integration( and retrie%al #apabilities( gi%e rise to do"bts

in the &inds of indi%id"als as to $hether the pri%a#y of the indi%id"als

is being eroded.

So long as the indi%id"al data ite&s are a%ailable only to those dire#tly

#on#erned( e%erything see&s to be in proper pla#e( b"t the in#iden#e of

data being #ross referen#ed to #reate detailed indi%id"al dossiers gi%es

rise to pri%a#y proble&s.

,"sto&ers feel threatened abo"t the inade:"a#y of pri%a#y being

&aintained by the banks $ith regard to their transa#tions and link at

#o&p"terised syste&s $ith s"spi#ion.

+ side fro& any #onstit"tional aspe#t( &any nations dee& pri%a#y to be a

s"b*e#t of h"&an right and #onsider it to be the responsibility of those $ho

#on#erned $ith #o&p"ter data pro#essing for ens"ring that the #o&p"ter "se

does not re%ol%e to the stage $here different data abo"t people #an be

#olle#ted( integrated and retrie%ed :"i#kly. +nother i&portant responsibility

is to ens"re the data is "sed only for the p"rpose intended




Viii. RECENT TRENDS INiii. RECENT TRENDS N

BANKING:ANK NG:

Today( $e are ha%ing a fairly $ell de%eloped banking syste&

$ith different #lasses of banks J p"bli# se#tor banks( foreign banks( pri%ate

se#tor banks J both old and ne$ generation( regional r"ral banks and #o-

operati%e banks $ith the eser%e ank of India as the fo"ntain 'ead of the

syste&.

In the banking field( there has been an "npre#edented gro$th

and di%ersifi#ation of banking ind"stry has been so st"pendo"s that it has no

parallel in the annals of banking any$here in the $orld.

"ring the last 45 years sin#e 10<0( tre&endo"s #hanges ha%e

taken pla#e in the banking ind"stry. The banks ha%e shed their traditional

f"n#tions and ha%e been inno%ating( i&pro%ing and #o&ing o"t $ith ne$

types of the ser%i#es to #ater to the e&erging needs of their #"sto&ers.

assi%e bran#h epansion in the r"ral and "nderde%eloped

areas( &obilisation of sa%ings and di%ersifi#ation of #redit fa#ilities to the

either to negle#ted areas like s&all s#ale ind"strial se#tor( agri#"lt"ral and

other preferred areas like eport se#tor et#. ha%e res"lted in the $idening and

deepening of the finan#ial infrastr"#t"re and transferred the f"nda&ental

#hara#ter of #lass banking into &ass banking.




There has been #onsiderable inno%ation and di%ersifi#ation in

the b"siness of &a*or #o&&er#ial banks. So&e of the& ha%e engaged in the

areas of #ons"&er #redit( #redit #ards( &er#hant banking( leasing( &"t"al

f"nds et#. + fe$ banks ha%e already set "p s"bsidiaries for &er#hantbanking( leasing and &"t"al f"nds and &any &ore are in the pro#ess of doing

so. So&e banks ha%e #o&&en#ed fa#toring b"siness.

The &a*or #hallenges fa#ed by banks today are as to ho$ to #ope

$ith #o&petiti%e for#es and strengthen their balan#e sheet. Today( banks are

groaning $ith b"rden of NP+=s. It is rightly felt that these #onta&inated

debts( if not re#o%ered( $ill eat into the %ery %itals of the banks. +nother

&a*or aniety before the banking ind"stry is the high transa#tion #ost of

#arrying Non Perfor&ing +ssets in their books. The resol"tion of the NP+

proble& re:"ires greater a##o"ntability on the part of the #orporate( greater

dis#los"re in the #ase of defa"lts( an effi#ient #redit infor&ation sharing

syste& and an appropriate legal fra&e$ork pertaining to the banking syste&

so that #o"rt pro#ed"res #an be strea&lined and a#t"al re#o%eries &ade

$ithin an a##eptable ti&e fra&e. The banking ind"stry #annot afford tos"stain itself $ith s"#h high le%els of NP+=s th"s( 6lend( b"t lent for a p"rpose

and $ith a p"rpose o"ght to be the slogan for sal%ation.7

The Indian banks are s"b*e#t to tre&endo"s press"res to

perfor& as other$ise their %ery s"r%i%al $o"ld be at stake. IT plays an

i&portant role in the banking se#tor as it $o"ld not only ens"re s&ooth

passage of interrelated transa#tions o%er the ele#tri# &edi"& b"t $ill also

fa#ilitate #o&ple finan#ial prod"#t inno%ation and prod"#t de%elop&ent.

The appli#ation of IT and e-banking is be#o&ing the order of the day $ith the

banking syste& heading to$ards %irt"al banking.




+s an etre&e #ase of e-banking >orld >ide anking >>)

on the pattern of >orld >ide >eb >>>) #an be %is"alised. That &eans all

banks $o"ld be interlinked and indi%id"al bank identity( as far as the

#"sto&er is #on#erned( does not eist. There is no need to ha%e large n"&berof physi#al bank bran#hes( etension #o"nters. There is no need of person-to-

person physi#al intera#tion or dealings. ,"sto&ers $o"ld be able to do all

their banking operations sitting in their offi#es or ho&es and operating

thro"gh internet. This $o"ld be the #ase of banking rea#hing the #"sto&ers.

anking lands#ape is #hanging %ery fast. any ne$ players $ith

different &"s#le po$ers $ill enter the &arket. The eser%e ank in its bid to

&o%e to$ards the best international banking pra#ti#es $ill f"rther sharpen

the pr"dential nor&s and strengthen its s"per%isor &e#hanis&. There $ill be

&ore transparen#y and dis#los"res.

In the days to #o&e( banks are epe#ted to play a %ery "sef"l

role in the e#ono&i# de%elop&ent and the e&erging &arket $ill pro%ide

a&ple b"siness opport"nities to harness. '"&an eso"r#es anage&ent is

ass"&ing to be of greater i&portan#e. +s banking in India $ill be#o&e &ore

and &ore kno$ledge s"pported( h"&an #apital $ill e&erge as the finest

assets of the banking syste&. Llti&ately banking is people and not *"st

fig"res.




I.! ST"'INS 'N/ (H'$$N)%S.! ST"'I S ' / (H'$$ )%S

iberalisation pro#ess has in#reasingly eposed Indian Ind"stry

to international #o&petition and banking being a ser%i#e ind"stry is also not

an e#eption. anking Se#tor in India too fa#es sa&e strains and #hallenges at

lo#al( national and international le%el.

Indian anks( f"n#tionally di%erse and geographi#ally

$idespread( ha%e played a #r"#ial role in the so#io-e#ono&i# progress of the

#o"ntry after independen#e. 'o$e%er( the gro$th led to strains in the

operational effi#ien#y of banks and the a##"&"lation of non-perfor&ing

assets NP+=s) in their loan portfolios.

anks fa#e in#reasing press"re to stand o"t fro& the #ro$d. ?n

the Internet( this &eans offering yo"r target #"sto&ers an in#reasingly

broader range of ser%i#es than yo"r #o&petitors and that too in "ni:"e $ay.

+ll this has res"lted in a #hallenge to &anagers of banks to

de%elop the right &i of a#:"ired and internally gro$n IT appli#ations $hi#h

s"its #"sto&er=s epe#tations.

anking se#tor refor&s and liberalisation pro#ess raised &any

#hallenges before Indian anks and for s"stainable de%elop&ent it has

be#o&e ne#essary to fa#e these #hallenges effe#ti%ely!

Intense ,o&petition ! The I and

8o%ern&ent of India kept banking ind"stry




open for the parti#ipants of pri%ate se#tor banks and foreign banks. The

foreign banks $ere also per&itted to set "p shop on India either as bran#hes

or as s"bsidiaries. "e to this lo$ered entry barriers &any ne$ players ha%e

entered the &arket s"#h as pri%ate banks( foreign banks( non-bankingfinan#e #o&panies( et#. The foreign banks and ne$ pri%ate se#tor banks ha%e

spearheaded the hi-te#h re%ol"tion. 'ea%y $eight foreign banks $ith h"ge

base( latest te#hnology inno%ati%e and globally tested prod"#ts are spreading

their $ings and $ooing a$ay #"sto&ers for& other banks. Dor s"r%i%al and

gro$th in highly #o&petiti%e en%iron&ent banks ha%e to follo$ the ne$

68"r" antra7 of pro&pt and effi#ient #"sto&er ser%i#e( $hi#h #alls for

appropriate #"sto&er #entri# poli#ies and #"sto&er friendly pro#ed"res.

Te#hnologi#al Lp gradation ! +lready ele#troni# transfers(

#learings( settle&ents ha%e red"#ed translation ti&es. To fa#e #o&petition it is

ne#essary for banks to absorb the te#hnology and "pgrade their ser%i#es.

'o$e%er "se of 'igh-Te#h sophisti#ated te#hnology lea%es the

predo&inantly r"ral( poor and e%en illiterate &ans in the l"r#h to $hi#h the

le%el of a"to&ation and effi#ien#y of ser%i#es are i&&aterial.

Pri%a#y and Safety! +&ong the &ost i&portant aspe#ts( of sa%ings(

i.e.( safety li:"idity and profitability( safety has to be a##orded top &ost

priority. The safety aspe#t ass"&es &ore signifi#an#e in the e&erging

s#enario as the e#ono&i# loss #a"sed internationally by these types of #ri&es

&ight risk area and any la#"nae is safety $o"ld res"lt in erosion of

#onfiden#e and the sa&e &ight possibly paralyse the entire net$ork.

The areas a&ong other things( $hi#h &ight endanger se#"rity in e-banking(

#an be!




,hanges in inp"t data s"#h as #hanging the a&o"nt in ledges(

in#reasing the li&its in a##o"nts or fa#e %al"e of #hea:"es. Tho"gh these

trends #o"ld be dete#ted #onse:"ently( pre%ention is a &a*or proble& $ith

these types of #ri&es.

Lse of stolen or falsified #ards in +T &a#hines.

,o&p"ter forgery #o"ld be #o&&itted by $ay of gaining a##ess to

other a##o"nt( deliberate da&age thro"gh %ir"ses on data stored in

#o&p"ters. In this #ase( sa&e #ri&inals &ight gain entry into the #o&p"ters

and #a"se da&age to the syste&. This apart( another thro"gh $hi#h se#"rity

and pri%a#y are &aintained. If a ha#ker has fo"nd o"t the pass$ord( he #an#a"se ha%o# to the entire net$ork. +lso( if the pass$ord is stolen &oney

#o"ld be transferred fro& one a##o"nt to another.

Soft$are pri%a#y is another area of potential danger fa#ed by the

banking ind"stry. In this the entire soft$are #o"ld be stolen. If this is done(

the ha#kers #o"ld operate a parallel net$ork.

'"&an eso"r#es anage&ent! In the re#ent past

the h"&an reso"r#e Poli#ies in banks $ere &ainly g"ided by the #on#ept of

per&anent e&ploy&ent and its ne#essary #on#o&itants of #reating #areer

paths( ter&inal benefits( et#. for the e&ployees. In today=s fast-#hanging

$orld of e&ployee &obility both horizontally and %erti#ally and %al"e

syste&s( the p"bli# se#tor banks need to hire the right talent at &arket

related #o&pensation and to shed s"rpl"s &anpo$erstaff. Th"s &any banks

are going for LS s#he&es to red"#e the b"rden of e#essi%e staff. S#he&es

like @S are going to #hange the nat"re of $orkfor#e $ith &any senior and

eperien#ed persons opting for it.




The key ele&ents that shall pro%ide a #o&petiti%e edge to banking se#tor $ill

not be physi#al assets b"t kno$ledge assets and infor&ation. Therefore(

banks &"st "nderstand ho$ to retain kno$ledge based e&ployees and

pre%ent the& to &igrating to so&e other organisation. anks &"st belie%e inpeople( #"sto&er orientation( and #ontin"o"s i&pro%e&ent of e#ellen#e.

Therefore it be#o&es ne#essary for banks to en#o"rage all e&ployees to take

risks and $ork to$ards #ontin"o"s i&pro%e&ents and breakthro"ghs.

S"##essf"l banks o%er#o&ing the #hallenges $ill be those that harness

te#hnology in a #"sto&er friendly yet #ost effe#ti%e $ay. This re:"ires

enor&o"s internal and eternal &anage&ent and the #r" of the sol"tion lies

in blending h"&an reso"r#es $ith infor&ation te#hnology.

'. CASE STUDY. CASE STUDY




• ,?-?PE+TI@E +NG +N ITS SE@I,ES!-

S++S>+T ,?-?PE+TI@E +NG IITE-

The ank has a %ery h"&ble b"t a %ery inspiring beginning. ?n

14th Septe&ber 101/1 The Saras$at ,o-operati%e

anking So#iety $as fo"nded. r. ;.G. Par"lkar

be#a&e its first ,hair&an( r. N.. Thak"r( the first

@i#e-,hair&an( r. P.N. >arde( the first Se#retary

and r. Shi%ra& 8opal a*adhyaksha( the first

Treas"rer. These $ere the people $ith deep and

abiding ideals( faith( %ision( opti&is& and

entreprene"rial skills. These dedi#ated &en in #harge of

the So#iety had a #o&&endable sense of ser%i#e and

d"ty i&bibed in the&. E%en today( o"r hono"rable fo"nders inspire a sense of

a$e and respe#t in the ank and a&ongst the shareholders.

The So#iety $as initially set "p to help fa&ilies in distress. Its

ob*e#ti%e $as to pro%ide te&porary a##o&&odation to its &e&bers in

e%ent"alities s"#h as $eddings of dependent &e&bers of the fa&ily(

repay&ent of debt and epenses of &edi#al treat&ent et#. The So#iety $as

#on%erted into a f"ll-fledged Lrban ,o-operati%e ank in the year 1033.

The ank has the "ni:"e distin#tion of being a $itness to

'istory. The ank( $hi#h $as originally fo"nded in 101/( i.e. #lose on the

heels of the "ssian e%ol"tion( also $itnessed as a So#iety and as ank-the

Dirst >orld >ar( the Se#ond >orld >ar( Indias freedo& o%e&ent and the

glorio"s #hapter of post-independen#e India. "ring this #ata#lys&i#

#a%al#ade of history( the ank as a finan#ial instit"tion and its &e&bers

#o"ld not of #o"rse re&ain "naffe#ted by the e#ono&i# #onse:"en#es of the




&a*or e%ents. The t$o $ars in parti#"lar bro"ght in their $ake( pa"#ities of

all kinds and realities and stand by its &e&bers in distress as a solid b"l$ark

of strength.

The Do"nder e&bers and the later-day &anage&ents of the

ank #ontin"ed to de&onstrate their "n$a%ering faith in the destiny of the

#o&&on &an and the #o-operati%e &o%e&ent and they en#o"raged the

shareholder to sa%e despite all odds.

ISSI?N ST+TEENT

To e&erge as one of the pre&ier and &ost preferred banks in

the #o"ntry by adopting highest standards of professionalis& and e#ellen#e

in all the areas of $orking.7

IEST?NES

Thanks to these s"stained and assid"o"s efforts o%er 29 years

after its in#eption( the ank had gained Strong fo"ndation in ter&s of its

&e&bership( reso"r#es( assets and profits. y 1042( the ank $as f"lfilling all

the banking needs of its #"sto&ers.

"ring the late fifties( the ank gre$ fro& strength to strength.

The ank had established fi%e bran#hes $ithin the #ity of "&bai and one

ea#h at P"ne and elga"&. In its 95th year( the ank #hose a bee &otif to

sy&bolise the anks e&ble& - a fitting and appropriate #hara#teristi#s of a

ank that belie%ed in hard $ork( a sear#h for all that is good( a tea& spirit to

a#hie%e its ob*e#ti%es and a selfless ser%i#e to its &e&bers and #"sto&ers. The

ank has gro$n in stat"re( progressed in its so#ial and e#ono&i# ob*e#ti%es

and prod"#ed an i&age of $hat an ideal bank sho"ld be. es"ltantly( in the

year 10AA-A/( the anks gross in#o&e #rossed the s.3.55 #rore &ark for the

first ti&e.




ast t$o de#ades the bank has $itnessed a steady gro$th in the

b"siness. The bank has a net$ork of /< f"lly #o&p"terised bran#hes #o%ering

fi%e states %iz. aharashtra( 8"*arat( adhya Pradesh( Garnataka and 8oa.

The ank is pro%iding 24- ho"r ser%i#e thro"gh +T at 41 lo#ations. In 10//the bank $as #onferred $ith S#hed"led stat"s by eser%e ank of

India.The bank is the first #o-operati%e bank to pro%ide er#hant anking

ser%i#es. The bank got a per&anent li#ense to deal in foreign e#hange in

10A/. Presently the ank is ha%ing #orrespondent relationship in 49 #o"ntries

#o%ering 0 #"rren#ies $ith o%er 129 banks

SE@I,ES P?@IE

Saras$at ,o-operati%e ank being the No.1 #o-operati%e bank

in +sia( o"r efforts are al$ays dire#ted to$ards de%eloping and offering

#o&petiti%e and inno%ati%e prod"#ts and ser%i#es. In the $holesale banking

b"siness( the Saras$at ,o-operati%e ank td. pro%ides a $ide range of

prod"#ts fro& a traditional ter& loans to short ter& prod"#ts like ills

dis#o"nting "nder etter of ,redit et#.

The ank also offers a bo":"et of etail oan Prod"#ts s"#h as @ast" Siddhi

'o&e oan( Saras$ati Ed"#ation oan( ,ar oan et#. and $ide array of

eposit s#he&es $ith #"sto&er friendly feat"res and attra#ti%e ate of

Interest. >ith a %ie$ of f"lfilling all the needs of the #"sto&ers "nder one

roof ank has entered into tie-"ps $ith %ario"s pre&i"& instit"tions(

thro"gh $hi#h $e are offering third party prod"#ts like ife and non-ife

Ins"ran#e( "t"al D"nds and e&at Ser%i#es.




• Dollo$ing are the Ser%i#es Pro%ided by the Saras$at

ank!-

PES?N+

1. eposits S#he&e

2. Personal oans

1. eposits S#he&e!-

Saras$at ank provides in4ormation o4 its vario%s deposit sc!emes

c%stomers can avail o4 wit! t!e 'ank.

,LS eposit

,"rrent eposit

Elite Sa%ings

;anhit +##o"nt No frills a##o"nt)

Sa%ings eposit

,o-operati%e So#ieties

Sa%ings for Gids ,LS)

http://www.saraswatbank.in/view_section.jsp?id=0,4,6,20


http://www.saraswatbank.in/view_section.jsp?lang=0&id=0,4,6,104









Deat"res!

Ko" sho"ld be a &inorst"dent "pto the age of 21 years) to

be#o&e ,LS a##o"nt holder.

Initial deposit of ,"bs a##o"nt is s 95- and s"bse:"ent

deposits in &"ltiples of s 15- no periodi# #o&p"lsion for

s"bse:"ent eposit.

Starting $ith a s&all a&o"nt of s. 95-( a ,L +##o"nt holder

has to sa%e s. 955 - o%er a period of one year.

Da#ility to deposit #ash in s#hool pre&ises on predeter&ined

days.

+fter #o&pletion of 14 years of age &inorst"dent #an operate

the a##o"nt

,he:"e book fa#ility not a%ailable.

No #harges for non-&aintenan#e of &ini&"& balan#e for first

year.

enefits

Dree 8ift for all a##o"nt holders.

Earn Interest Q 3.9 p.a. e%ery :"arter possess spe#ially designed passbook.




ini&"& alan#e!

+##o"nt opening - s. 95- $ith f"rther deposit of s. 15- s. 955- after one

year of opening a##o"nt.

• ,"rrent eposits-

Deat"res!

ini&"& +%erage alan#e.

Eligibility - Indi%id"al( "siness&en( ?rganizations.

ini&"& alan#e of s 9555- .

Dree +T #ards.

Non-aintenan#e of &ini&"& a%erage :"arterly balan#e re:"ire to pay

ser%i#e #harges of s. 255- per &onth.

If a##o"nt is #losed $ithin < &onths s. 35- pl"s s. 2- per "n"sed #hea:"es.

Elite Sa%ings-

Eligibility! Indi%id"als( inor by g"ardian( ?rganisations( ,o-

operati%e So#ieties.

ini&"& alan#e! s. 9555- +%erage C"arterly alan#e)

ate of Interest! 3.95B p.a.

Penalty for Non-&aintenan#e of &ini&"& balan#e

ini&"& :"arterly a%erage balan#e!




elo$ s. 4555- to s. 4000- - s. 95 per :"arter.

elo$ s. 4555- - s. 155 per :"arter.

Spe#ial feat"res fa#ilities

Dree Personal +##ident Ins"ran#e ,o%er of s. 2.55 akhs for one

year.

Dree Ltility ills Pay&ent fa#ility.

Dree Iss"e of e&and raft Pay ?rder one o##asion per &onth

$itho"t #eiling on &ai&"& a&o"nt)

Dree +T ,ard

;anhit +##o"nt No Drills +##o"nt) -

Eligibility!

1) Persons $hose balan#es do not e#eed s 95(555- in all the a##o"nts

taken together.

2) Total #redits to the ;anhit a##o"nt sho"ld not e#eed s 1 lakh in a

year.




3) ?n#e a #"sto&er opens a ;anhit +##o"nt $ith the ank( heshe $ill

ha%e to #lose all other transa#tion a##o"nts $ith any other bank $ithin

a period of <5 days fro& the date of opening the ;anhit +##o"nt $ith

o"r bank.

4) The initial deposit a&o"nt re:"ired to open a##o"nt $o"ld be s.295

ini&"& alan#e!

ini&"& alan#e re:"ired to be &aintained $o"ld be s.155-.

• Sa%ings eposits!-

ini&"& +%erage alan#e-

s. 1555 - $ith or $itho"t ,he:"e ook F Dree +T #ard.

Interest -

3.9B p.a. $ith :"arterly rest.

Penalty Ser%i#e ,harges!-

Non-aintenan#e of &ini&"& a%erage :"arterly balan#e of s 1555-

re:"ire to pay s 95- per &onth

If a##o"nt is #losed $ithin < &onths




>itho"t #he:"e book - s. 15 -

>ith #he:"e book - s. 19 - pl"s s. 2 per "n"sed #he:"e

• ,o-operati%e So#ieties-

Eligibility-

,o-operati%e so#ieties

ini&"& +&o"nt-

ini&"& :"arterly a%erage balan#e of s. 19555- in Sa%ing,"rrent

+##o"nt ini&"& s. 3.55 lakhs in Ter& eposit

ate of Interest-

5.9B etra interest as #o&pared to 8eneral P"bli# for Ter& eposit.

Dor Sa%ing +##o"nt 3.9B

Dor ,"rrent +##o"nt J Nil

Spe#ial Deat"resDa#ilities-




Dree +ffinity ,ard

Dree ,he:"e ,olle#tion Ser%i#e.

Dree deli%ery of State&ent of +##o"nt on#e in a &onth)

Dree Ltility ill Pay&ent Easy Pay S#he&e)

Dree transfer of D"nds fro& the a##o"nt of &e&ber of the So#iety to

So#iety=s a##o"nt for &onthly &aintenan#e

Dree iss"e of ..P.?. "pto s. 29555- ea#h.

• Personal oans-

Saras$at ,o-operati%e ank offers %ario"s loans to its #"sto&ers( one #an opt

for any of the belo$ listed loans for their assort&ent of needs.

• edi#al oan-

P"rpose

Ter& oan for a#:"iring N"#le"s ,o#hlear I&plant

anking elation

Pre%io"s banking relations are not #o&p"lsory.

+ppli#ant sho"ld be residing in the #ity $here the bran#h is lo#ated.






Eligibility

'earing i&paired indi%id"al ? their Parents.

i&it of oan

s. 15.55 akhs

155B of the #ost of e:"ip&ent and hospitalisation and allied #harges A5B of

the arket %al"e based on %al"ation by appro%ed %al"e of the #o&&er#ial or

residential property

EI

Died onthly Install&ents! Dor s 1.55 akh )

Kear 1 2 3 4 9

+&o"nt //30 4<<1 32A4 29/9 21A9

epay&ent Period

ai&"& 9 Kears6

Se#"rity

E:"itable &ortgage of residential #o&&er#ial pre&ises Pledge of tangible

se#"rities %iz. NS,s( [email protected], poli#ies( Ds( 8old or any other appro%ed

se#"rities 2 8"arantors of $ell pla#ed &eans.




• Property oan-

P"rpose

+#:"iring another asset( for any other p"rpose( b"t end "se sho"ld beens"red.

i&it of oan

ini&"& - s.2 lakhs

ai&"& - s. 95 akhs

asis of +d%an#e

29 ti&es of net salary in #ase of salaried person ?r

3 ti&es of net #ash a##r"als.Net of ta and dra$ing pl"s depre#iation)

?r

<5B of agree&ent #ost If the property is less than 3 years old.).In

other #ases( <5B of %al"e as per %al"ation report.

>hi#he%er is lo$er






Eligibility

Indi%id"al $ho are salaried e&ployees ha%ing &ini&"& net salary of

s.15555- p.&. The in#o&e of the spo"se &ay be added)

Professional( Self-E&ployed and others $ho are in#o&e ta assessee

ha%ing net ann"al taable in#o&e of s.195555- for at least 3 years

#ontin"o"sly.

Dir&,o&pany( $hose net ann"al taable in#o&e is s.195555- p.a.

and fir&#o&pany( is in operation for last 3 years and &aking #ash profit for

last 3 years( at the abo%e le%el.

ate of Interest

Ter& loan - 12.95B on aily ed"#ing alan#e

,ash #redit - 13B on aily ed"#ing alan#e

epay&ent Period

Ter& oan - ai&"& 9 years

,ash ,redit - $ith red"#ing li&it in <5 &onthly install&ents) s"b*e#t to

rene$al e%ery year.

Se#"rity

E:"itable ortgage of esidential( #o&&er#ial or ind"strial property.




8"arantor!

Need not be obtained ho$e%er in #ase of fir&s( #o&panies( g"arantee of

partners( dire#tors to be obtained.

• 'o&e oan

P"rpose of oans

P"r#hase of flat b"ngalo$

i&its of oans

ai&"& s.29.55 lakhs.

asis of +d%an#e Eligibility.

09B of #ost of land F #onstr"#tion or #ost of flat R registration #harges R

sta&p d"ty.

155B of #ost on #ase to #ase basis $ith 15B #ollateral se#"rity in the for& of

appro%ed li:"id se#"rities like Ter& eposit( 8o%t. Se#"rities( NS,( G@P(

I, et#.

?ption Ieg"lar epay&ent) - <5 ti&es of net &onthly salary a%g. for the

last three &onths)?r 3 ti&es of Net ,ash a##r"als a%erage for the last 2-3

years net profit after adding ba#k of depre#iation) of appli#ant( spo"se and

#lose blood relati%e

?ption II "llet epay&ent) F ?ption III Progressi%e epay&ent)- <9

ti&es of net salary a%g. for the last three &onths) or 3 ti&es of net #ash

a##r"als a%erage for the last 2-3 years net profit after adding ba#k of






depre#iation) of the appli#ant( spo"se( and dependent blood relati%e( if

appli#ant opts for "llet pay&ent &ode.

epay&ent Period

ai&"& 19 years

ate of Interest

Dlei Died! 11.55B p.a. - @arying e%ery 3 years

Dloating! 11.95B p.a.

Died! 12.95B p.a.

• ,?P?+TE

7,"sto&er is not an inter%entionH he is the %ery reason for o"r

eisten#e.7




The ank realises this. >e pro%ide a $ide array of #o&&er#ial and ele#troni#

anking prod"#ts to #orporate &id #orporateSE. espite rapid gro$th in

#redit portfolio( anks asset :"ality has sho$n #onstant i&pro%e&ent. Ko"r

ank has a $ide epos"re to %ario"s ind"stries. >e are pro%iding %ario"sfa#ilities fro& f"nded to none f"nded fro& short ter& to long ter& ens"ring

that yo" get finan#e as per yo"r needs.

id ,orporate Prod"#ts

S&all F edi"& Enterprises SEs)

1) id ,orporate Prod"#ts.

ank pro%ides %ariety of #redit fa#ilities to its ,orporate ,lients as "nder!

>orking ,apital

The ank $ith a tea& of te#hni#ally :"alified #o&petent #"sto&er dri%en

relationship &anagers possessing $ide ind"stry eperien#e in %ario"s

seg&ents( the ank has taken lot of efforts to "nderstand #"sto&ers F

e&pathizing $ith their needs.

They #an offer yo" $orking #apital finan#e by $ay of #ash #redit or loans

s"itably str"#t"red to yo"r need and risk profile in #onsorti"& or as a lead

banker. ?"r $orking #apital sol"tions are based on finan#ial( :"antitati%e F

:"alitati%e e%al"ation of yo"r b"siness thro"gh o"r te#hni#ally :"alified

eperts.

Ter& oan








The ank pro%ides ter& finan#eter& loans for b"siness epansion( "p

gradation of eisting fa#ilities et# to ease the press"res on &argins of the

#o&pany .The ank is pro%iding str"#t"red ter& loans to &eet yo"r short ter& as

$ell as long ter& f"nding re:"ire&ents. >e offer spe#ifi# sol"tion so as to &at#h

repay&ent $ith yo"r #ash flo$s to repay the debt thereby enhan#ing yo"r

profitability.

2) S&all F edi"& Enterprises SEs)

Dor a b"siness on the gro$th phase $ith a $ide range of opport"nities to

eplore( ti&ely a%ailability of #redit is essential to s#ale ne$ heights. +t

Saras$at ank $e see o"rsel%es as partners to ,lients b"siness enabling yo"

to fo#"s on yo"r b"siness needs.

>orking ,apital

The ank $ith a tea& of te#hni#ally :"alified #o&petent #"sto&er dri%en

relationship &anagers possessing $ide ind"stry eperien#e in %ario"s

seg&ents. The ank has taken lot of efforts to "nderstand #"sto&ers F

e&pathizing $ith their needs.

The #an offer yo" $orking #apital finan#e by $ay of #ash #redit or loans

s"itably str"#t"red to yo"r need and risk profile in #onsorti"& or as a lead

banker. Their $orking #apital sol"tions are based on finan#ial( :"antitati%e

F :"alitati%e e%al"ation of yo"r b"siness thro"gh o"r te#hni#ally :"alified

eperts.

I&port Dinan#e






ank is pro%iding i&port finan#e to its %al"able #"sto&ers by pro%iding letter

of #redit fa#ility for its #"sto&ers to p"r#hase their ra$ &aterials. These are

generally pro%ided for 05 to 1/5 days.

• SE@I,ES

Saraswat Co-operative Bank pro%ides infor&ation of %ario"s

@al"e added ser%i#es that the ank pro%ides for its estee&ed ,"sto&ers

"nder this se#tion.

• E+SK P+K

'ere is one &ore e#iting fa#ility the ank has offered to relie%e

yo"( its estee&ed #lient( fro& their %al"able ti&e standing in a :"e"e for

ro"tine "tility bill pay&ents.

+ll they ha%e to do is to $alk into any of the bran#h and register

the&sel%es "nder! 6Easy Pay7 s#he&e for all their re#"rring "tility bill

pay&ents s"#h as Telephone( Ele#tri#ity ills( ,ell"lar Phone ills( Ins"ran#e

Pre&i"& F &any &ore. ?n#e the #"sto&ers are registered all their f"t"re

bills $ill be paid a"to&ati#ally thro"gh their bank a##o"nt $ith bank.

+ny ,"sto&er #an do$nload the for& and s"b&it it to nearby bran#h.

• +T SE@I,ES

Please do not $aste the %al"able Ti&e for oney( as the Ti&e itself is

oney.




The Saraswat Co-operative Bank iss"e +T #ard to all their

#lients $ho open a##o"nt $ith the ank.

eing + Saras$at ank +T #ardholder( the a##o"nt holder

en*oy the pri%ilege and #on%enien#e of $ithdra$ing #ash at their #on%enien#e

at ti&e d"ring day and night on all 3<9 days in a year. They #an dra$ #ash

fro& +Ts of Saras$at ank as $ell as o%er 24<1 +Ts of 25 &e&bers

anks in +N,S net$ork. Dor dra$ing #ash fro& the +Ts of

,onsorti"& banks( no #harges are le%ied.

To a%ail +T ,ard( a##o"nt holder #an do$nload the for& and

s"b&it it to nearby bran#h.

• INSL+N,E

It is the ank=s earnest endea%or to offer s"ite of ne$ and

#o&petiti%e finan#ial prod"#ts and ser%i#es. The ank has for this p"rpose




tied "p $ith %ario"s ins"ran#e #o&panies. The details of tie-"p and prod"#ts

offered are gi%en belo$!

IDE INL+N,E.

Dor ife Ins"ran#e prod"#ts( $e ha%e entered into a tie-"p $ith s. 'D,

Standard ife Ins"ran#e ,o&pany i&ited. >e offer follo$ing prod"#ts!

Endo$&ent Plan!

This being a pop"lar sa%ings plan is "sef"l for &eeting all long short-ter&

finan#ial needs and also #o%ers the risk of the appli#ants life. Ta benefit

"nder Se# /5 , is also a%ailable.

,hildren=s o"ble benefit plan

It is the &ost pop"lar plan $hi#h helps yo" sa%e and se#"re yo"r #hilds

f"t"re to &eet epenses for ed"#ation( &arriage et#. It is also kno$n as

do"ble benefit plan as on death of life ins"red the benefi#iary #hild) gets the

s"& ass"red on death of appli#ant as $ell as on &at"rity of the poli#y. Ta

benefit "nder Se# /5 , is also a%ailable.

Ter& +ss"ran#e plan!

It is p"rely life risk #o%er plan. ?n death of the life ins"red the no&inee gets

the poli#y a&o"nt. Ta benefit "nder Se# /5 , is a%ailable.

eg"lar Personal Pension Plan!

It is plan( $hi#h pro%ides ann"ity at the retire&ent age. This plan is a $ith

profit pension plan s"itable for e%eryone to help pro%ide reg"lar finan#ial




se#"rity to the fa&ily. Plan takes #are of retire&ent age( ret"rn on

in%est&ent( inflation et#. Ta benefit "nder Se# /5 , a%ailable.

N?N-IDE INL+N,E!

Dor Non-ife Ins"ran#e $e ha%e a tie-"p $ith s. a*a* +llian#e 8eneral

Ins"ran#e ,o td. Lnder the arrange&ent $e offer follo$ing ins"ran#e

prod"#ts!

'ealth g"ard!

This plan pro%ides for rei&b"rse&ent of 'ospitalisation epenses in#"rred

for illness diseases or in*"ry s"stained. The key feat"res are lo$est pre&i"&(

takes #are of pre and post hospitalisation epenses( a&b"lan#e #harges(

fa&ily dis#o"nt( #ashless fa#ility $ith net$ork of <55 hospitals a#ross India.

Ta benefit "nder Se# /5 is a%ailable.

Tra%el ,o&panion!

It is an ?%erseas Tra%el Ins"ran#e that #o%ers rei&b"rse&ent of &edi#al

epenses at abroad( along $ith loss of passport baggage d"ring o%erseas

tra%el.

Personal +##ident Ins"ran#e! It #o%ers risk of death on a##ident.

@ehi#le Ins"ran#e! It ins"res yo"r %ehi#le in#ase of da&age or loss to

the %ehi#le.




'I.CONC(USION .CONC(US ON

The banking s#enario has #hanged drasti#ally. The #hanges

$hi#h ha%e taken pla#e in the last ten years are &ore than the #hanges took

pla#e in last fifty years be#a"se of the instit"tionalisation( liberalisation(

globalisation and a"to&ation in the banking ind"stry.

Indian banking syste& has se%eral o"tstanding a#hie%e&ents to

its #redit( the &ost striking of $hi#h is its rea#h. Indian banks are no$ spread

o"t into the re&ote #orners of o"r #o"ntry. In ter&s of the n"&ber of

bran#hes( India=s banking syste& is one of the largest in the $orld. +##ording

to the anker 2554( India has 25 banks $ithin the $orld=s top 1555 o"t of

$hi#h only < are $ithin the top 955 banks.

Today banking se#tor is &arked by high #"sto&er epe#tations

and te#hnologi#al inno%ations. Te#hnology is playing a #r"#ial role in the day

to day f"n#tioning of the banks. These banks that ha%e harnessed and

le%eraged te#hnology best ha%e a strategi# ad%antage. To fa#e #o&petition it is

ne#essary for banks to absorb the te#hnology and "pgrade their ser%i#es.




In today=s #ontet banks are follo$ing the strategy of

6relationship banking7 than 6&ass banking7 $hi#h is need of the ho"r. The

#"sto&er ser%i#es are playing a %ery signifi#ant role in banking b"siness. In

India &a*or e%ents leading to dereg"lation( liberalisation and pri%atisationha%e "nleashed for#es of #o&petition( &aking the banks r"n for their

b"siness( not only to #reate the #"sto&er( b"t &ore diffi#"lt to r"n for their

b"siness( not only to #reate the #"sto&er( b"t &ore diffi#"lt to retain the

#"sto&er. Pro&pt and effi#ient #"sto&er ser%i#e( th"s( has be#o&e %ery

signifi#ant. elationship banking is the ne$ paradig& for s"r%i%al and

s"##ess( e&bra#ing a Mshare of #"sto&er= approa#h to gro$th by identifying(

prote#ting and epanding #"sto&er relationship.

'II.BIB(IOGRAPHY .B B( OGRAPHY

• >ebsites @isited

www.google.com .google.com

www answers com

http://www.google.com/



http://www.answers.com/





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