BANKING

“BANKING IS WHAT A BANK DOES”

DEFINITION OF BANKING

Banking Regulation Act 1949 defines

banking as, “ACCEPTING FOR THE

PURPOSE OF LENDING AND INVESTMENT,

OF DEPOSITS OF MONEY FROM THE

PUBLIC, REPAYABLE ON DEMAND, ORDER

OR OTHERWISE AND WITHDRAWABLE BY

CHEQUE,DRAFT,ORDER OR OTHERWISE”.

BANK IS PART OF FINANCIAL SYSTEM

Financial system is one

which supplies the necessary financial

inputs for the production of goods and

services. Economic development of any

country depends upon the existence of

well organized financial system.

Financial system

Financial markets

Financial intermediaries

Financial assets

Financial instruments

BANKS

BANKING SYSTEMThere has been a rapid development

in the banking institutions in various

countries. With development, various

systems of banking have come into

existence. Banks can be classified on

the basis of volume of operator,

business pattern & areas of

operations.

COMMON BANKINGSYSTEM

BRANCH BANKING

UNIT BANKING

CORRESPONDANCE BANKNG

DEPOSIT BANKING

INVESTMENT BANKNG

MIXED BANKING

UNIVERSAL BANKNG

CLASSIFICATION OF BANKING

Banking institutions are

indispensable part in a modern

developing society.

On the basis of functions performed

banks can be classified as follows.

BANKING STRUCTURE UNORGANIS

ED

INDIGENIOUS

BANKS

MONEY LENDERS

TRADERS

ORGANISED

COMMERCIAL BANKS

COPOERATIVE BANKSREGIONAL

RURAL BANKS

ALL INDIA FINANCIAL

INSTITUTIONFOREIGN

BANKS

INDUSTRIAL DEVELOPMENT

BANKS

INDIAN BANKING UNIVERSE

INDIAN BANKING UNIVERSE

PUBLIC SECTOR BANKS

26

FOREIGN BANKS

41

PRIVATE BANKS

20

FUNCTIONS OF COMMERCIAL BANK

PRIMARYFUNCTION

SECONDARY

FUNCTION

ACCEPTANCE OF DEPOSITS

ADVANCING OF LOANS & CREDIT

CREATION

INVESTMENT FUNCTION

DEAING IN FOREIGN

EX-CHANGE

PRIMARY FUNCTIO

N

AGENCYSERVICES GENERAL

UTILITY SERVICES

SECONDARY FUNCTIONS

C

RESERVE BANK OF INDIA

RBI was established

in 1st April 1935.

Present governor is

Duvvuri Subbarao.

There are 22 regional

offices and most of

them in share capital.

CENTRAL BANK OF INDIA

It was started as shareholders bank with a paid up capital of 5crores.It was privately owned. In 1949, RBI was fully owned by government.

FIRST GOVERNOR

Sir OSBORNE A.

SMITH. [April 1st 1935

to June 30,1937]

(AUSTRALIA).

FIRST INDIAN GOVERNOR

Sir CHINTAMAN

D. DESHMUKA

(August11,1943 to

June30,1949).

LIST OF GOVERNOR IN RBI

HE IS MR.YAGA

VENUGOPAL REDDY.

HE WAS ELECTED AS

GOVERNOR FROM

PERIOD (6TH

SEPTEMBER 2003 TO

5TH SEPTEMBER 2008).

PRESENT GOVERNOR OF RBI

MR.DUVVURI

SUBBARAO WAS THE

22ND & CURRENT

GOVERNOR OF RBI.

HE ELECTED FOR

PERIOD OF (5TH

SEPTEMBER 2008 TO 4TH

SEPTEMBER 2013).

FUNTIONS OF RBI

To regulate the issue of bank notes and keep reserves , with a view to secure monetary stability in India.Generally to operate the currency and credit system of the country.

ORGANISATIONCENTRAL BOARD---MUMBAI.

LOCAL BOARD----MUMBAI, DELHI,

CHENNAI, KOLKATA.

FUNCTION OF CENTRAL BOARD & LOCAL BOARD

FUNCTION OF CENTRAL BOARD: General superintendence and direction of the bank’s affairs. FUNCTIONS OF LOCAL BOARD: Advise to the Central Board and economic interest of local co-operative indigenous bank.

FUNCTIONS OF RBI

TRADITIONAL FUNCTIONPROMOTIONAL FUNCTIONSUPERVISORY FUNCTION

TRADITIONAL FUNCTION

Monopoly of currency notes issue.

Banker to government (both central

&state)

Agent & Advisor to Government

Banker to Banker’s

Act as clearing house of country

Lender of last resort

Controller of credit

Custodian of foreign exchange reserves.

PROMOTIONAL FUNCTION

Promotion of banking habit and expansion of banking system Provider refinance for expert promotionExpansion of facilities for provision of the agricultural credit through NABARDExtension of n facilities for SBIHelping Co-Operative sectorPrescribe minimum statutory requirement.Innovating new banking business transactions.

SUPERVISIORY FUNCTION

Granting license to banksInspects and makes enquiry in various section of RBI and banking regulations.Implement deposit insurance schemePeriodical review of work of the commercial bankGiving directives to commercial bankControl non banking finance corporationEnsuring health of financial corporation system through on site & offsite verification.

STATE BANK OF INDIA

ACTS AS AGENT OF

RESERVE BANK OF

INDIA.

EVOLUTION OF SBI

EVOLUTION OF SBI CAN BE TRACED BACK

TO THE FIRST DECADE ON 19TH CENTURY.

IT BEGAN WITH ESTABLISHMENT OF

THE BANK OF CALCUTTA ON 2ND JUNE 1806.

ON 2ND JANUARY 1809 RENAMED AS THE

BANK OF BANGAL.

FIRST JOIINT STOCK BANK IN BRITISH INDIA ESABLISHED UNDER THE SPONSORSHIP OF GOVERNMENT OF BENGAL.FOLLOWED BY BANK OF BENGAL: BANK OF BOMBAY-15TH APRIL1840 BANK OF MADRAS-1ST JULY 1843THESE THREE DOMNIATED MODERN BANKING SCENARIO IN INDIA.

THREE BANKS WERE AMALGAMATED TO FORM THE IMPERIAL BANK OF INDIA ON 27TH JANUARY 1921.TO SERVE THE ECONOMY IN ACCORDANCE WITH FIVE YEAR PLAN (1951), THE ALL INDIA RURAL CREDIT SURVEY COMMITTEE PROPOSED THE TALE OVER OF THE IMPERIAL BANK OF INDIA.

AN ACT WAS PASSED IN PARLIMENT OF INDIA IN MAY 1955 . AS A RESULT THE STATE BANK OF INDIA WAS ESTABLISHED ON 1ST JULY 1955.

ON 1959 SBI

[SUBSIDARY BANKS] ACT

WAS PASSED . IT

ENABLED THE SBI TO

MAKE EIGHT STATE

ASSOCIATED BANKS AS

ITS SUBSIDIARIES.

SUBSIDIARIES OFSBI:

STATE BANK OF BIKANER & JAIPUR

STATE BANK OF HYDRABAD

STATE BANK OF MYSORE

STATE BANK OF PATIALA

STATE BANK OF TRAVANGORE

PRODUCTS & SERVICES OF SBI

E-TICKETING

SBI E-TAX

EZTRADE @ SBI

RTGS/NEFT

E-PAYMENTS

FUND TRANSFER

THIRD PARTY TRANSFER

DEMAND DRAFT

CHEQUE BOOK REQUEST

ACCOUNT OPENING REQUEST

ACCOUNT STATEMENT

TRANSACTION ENQUIRY

DEMAT ACCOUNT

DONATION

STATE BANK VIRTUAL CARD

GREEN CHANNEL COUNTER

KIOSK BANKING SYSTEM

RISE OF E-MONEY

CHEQUES

2009-10

2011-12

ELECTRONIC PAYMENTS

2009-10

2011-1265%

52%

35%

48%

RECENT TRENDS

RECENT TRENDS IN COMMERCIAL BANKING

BANKING SECTOR IS THE HEART OF ECONOMY.IN 1969, 14 BANKS WERE NATIONALISED AND FOLLOWED BY 6 BANKS IN 1980.BANKING SECTOR WERE FULLY COMPUTERISED IN 1985.SOME OF THE RECENT TRENDS ::

NET BNKING

It is also known

as Internet banking

or Online Banking.

It is the process of

conducting Banking

transactions over

the internet.

MOBILE BANKING

It is also known

as M-Banking.

The customer

can operate his

account over the

mobile phone.

PHONE BANKING

The customer can

obtain information

about his account

quickly, but however

deposit and withdrawal

cannot be made over

the phone. Otherwise

the information about

his account can obtain.

REAL TIME GROSS SETTLEMENT

It is the system of funds transfer from one to another. The transactions are settled one to one without bunching with any other transactions .Once processed the payments are final and irrevocable. . Minimum amount of remittance is Rs.2 lakhs and no upper ceiling is there.

NATIONAL ELECTRONICFUNDS TRANSFER

It is a system of funds transfer. Its simple, secure, safe, fastest and cost effective pay to transfer of funds. To use this facility they furnish INDIAN FINANCIAL SYSTEM CODE[IFSC], of the beneficiary and also branch name, full account number of the beneficiary. It is chargeable.

MONEYGRAM MoneyGram is a

new internet based

remittance product.

It is cashless money

transfer. These

facilities available to

NRIs to remit money

to India.

XPRESS MONEY

X-Press money offered

in arrangement with M/s

UAE exchange financial

service limited for

remitting money to India.

Money can be remitted

from 180 countries

across the globe.

MINISTRY OF COMPANY AFFAIRS

This facilities is

provided by some

banks only. MCA

Payments can be done

via credit card,

internet banking and

physical challan

currently.

KIOSK BANKING

It performs basic

banking activities.

GREEN CHANNEL COUNTER

STATE BANK OF INDIA

introduced this

services on 1st July

2010 at 57 pilot

branches across

country.

Through this one can

do all works in bank

without using challen.

CHEQUE TRUNCATION SYSTEM

It is a image based

clearing system. It is

issued u/s 18 of the

payment &

settlement system

act 2007.

THANKS FOR WATCHING…

by

3 RD B.COM STUDENTS

STAFF ADVISOR

DR.S.KOTHAI.