Structures and banking changes, processor also

1. Banking Structure and Financial
Refoms In India

2. Meaning of Bank
# Bank is a lawful organization, which accepts
deposits that can be withdrawn on demand. It
also lends money to individuals and business
housesthat need it.

3. Financial System
An institutional framework existing in a country to enable
financial transactions.
Three main parts
Financial assets (loans, deposits, bonds, equities, etc.)
Financial institutions (banks, mutual funds, insurance companies, etc.)
Financial markets (money market, capital market, forex market, etc.)

4. Commercial
banks
a. Public sector
b. Private sector
c. Foreign banks
d. Cooperative
institutions
(i) Urban cooperative
banks
(ii) State cooperative
banks
(iii) Central cooperative
banks
Financial institutions
a. All-India financial institutions (AIFIs)
b. State financial corporation’s (SFCs)
c. State industrial development corporations
(SIDCs)
Nonbanking
financial
companies
(NBFCs)
Capital market
intermediaries
Financial Structure

5. Functions of Bank
• Accepting deposits from Public
• Lending money to public
• Collection Business
• Keeping valuables in safe custody
• Government business
• Acting as trustee
• Treasury services
• Capital Market activity

6. History of Banking in India

7. The reminisce of banking in India can be traced back to the 4th century
BC in the 'Kautilya Arthashastra‘.
However the real roots of commercial banking in India can be traced
back to the early eighteenth century.
Bank of Hindustan was set up in 1870,it was the earliest Indian Bank.
Later, three presidency banks under Presidency Bank's act 1876 i.e.
Bank of Calcutta, Bank of Bombay and Bank of Madras were set up,
which laid foundation for modern banking in India
In 1921, all presidency banks were amalgamated to form the Imperial
Bank of India.

8. The first bank which was exclusively set up by Indians was Allahabad Bank, followed by Punjab
National Bank Ltd. set up in 1895 with headquarters at Lahore
The Reserve Bank of India was established on April 1, 1935 to control & regulate these banks
in accordance with the provisions of the Reserve Bank of India Act, 1934.
In 1955, RBI acquired control of the Imperial Bank of India, which was renamed as State
Bank of India. In 1959, SBI took over control of eight private banks .
The plan for nationalization was passed in1968. Thus forming the third turning point in the
history of Indian Banking in India.
The Narasimha Committee report suggested wide ranging reforms for the banking sector in
1992 to introduce internationally accepted banking practices. The amendment of Banking
Regulation Act in 1993 saw the entry of new private sector banks. private sector banks.

9. Regulates the Financial Sector in India
Ministry of Finance
• Controls and assists the financial sector
• Every year the finance minister announces the budget
• Also acts as the policy maker and regulates the financial sector
Reserve Bank of India
• Apex Financial Institution of India, established in April 1935
• Advises the central board on various matters
• Acts as the investment banker to the Government
Securities and Exchange Board of India
• Regulator of securities market in India
• Protects the interest of investors in securities
• Also regulates the development of securities market
Insurance Regulatory and Development Authority
• An agency of the Government, based in Hyderabad
• It works on the guidelines of IRDA Act, 1999
• Safeguards the interest of the common man

10. Some other Laws related to Banking Sector
Other Acts
Companies
Act (1956)
Banking
Companies
Act
Negotiable
Instruments
Act (1881)
SARFAESI
act (2002)
Bankers’
Books
Evidence
Act (1891)
Regional
Rural Bank
Act (1976)
SBI Act
(1955)

11. Banking Structure in India

12. Indian Financial System –Share by Asset Size
- 2013
Segment Market Share of
Financial Assets (%)
Banks 63
Insurance Companies 19
Non-Banking Financial
Institutions
8
Mutual Funds 6
Provident and Pension
Funds
4
Indian Banking System – Share by Asset Size
- 2013
Institutions Market Share of
Banking Assets
(%)
Scheduled Commercial
Banks
92.4
Public Sector Banks 67.2
Private Sector Banks 18.7
Foreign Banks 6.5
Regional Rural Bank 2.7
Co-operative Banks 3.4
Local Area Banks 1.5
Banks dominate the Indian Financial System The Banking System is dominated by Commercial Banks

13. Share in the Banking Space
Type of Banks Number of
Banks
Number of
Branches
%age Share of Number of
Branches
Market Share of
Assets (%)
Public Sector 26 67,466 83.0 72.8
Private Sector 20 13,452 16.6 20.2
Foreign Banks 41 323 0.4 7.0
Total 87 81,241 100.0 100.0
Public sector banks have more presence relative to their share of assets.

14. Types of Banks
Central Bank (RBI)
Non Banking Finance
Companies (NBFCs)
Commercial Banks Term Financial Institutions
State Finance Corporations
(SFCs)
Indian Financial
Institutions
E.g.
IFCI
NABARD
SIDBI
Public Sector Private Sector Foreign Co-operative
Banks
Regional Rural
Banks
E.g.
SBI
PNB
BOB
E.g.
HDFC Bank
UTI Bank
ICICI Bank
E.g.
Citibank
ABN Amro
HSBC
State/Central Private
Primary Credit
Societies

15. Loan Products
• Auto Loan
• Gold Loan
• House Loan
• Credit cards
• Education Loan
• Loan against Securities
• Retail Banking Business
Deposit Products
• Deposits
• Saving Accounts
• Current Accounts
• Fixed / Recurring
• Corporate Salary A/C
Other Products/Services
• NRI services
• POS Terminals
• Private Banking
• Demat Services
• Mutual Fund Sales
• Foreign Exchange Services
Commercial Banking
• Term Loan
• Guarantees
• Bill Collection
• Letter of Credit
• Working Capital
• Forex & Derivatives
• Wholesale Deposits
Transaction Banking
• Cash Management
• Custodian Services
• Clearing Bank Services
• Tax Collections
• Banker to Public Issues
Commodities(Inc Hedging)
Key Segment
• Large Corporate
• Emerging Corporate
• Financial Institutions
• Government/PSUs
• Agriculture Commodities
Product Segment
• Equities
• Derivatives
• Capital Market
• Debt Securities
• Foreign Exchange
Other Financing
• Cash Management
• Statutory Reserve
• Financial Decisions
• Asset Liability Management
Retail Banking1
Wholesale Banking2
Treasury Banking3
WORKING

16. Analysis of Previous Data
• Since nationalization of 14 major commercial banks in 1969,
followed by nationalization of another 6 banks in 1980, Indian
banking system has expanded rapidly.
• The number of bank offices increased from about 8,000 in 1969 to
over 100,000 by 2014.
• The average population per branch office has from 64,000 in 1969
to 13,000 today.
• Both per capita deposit and per capita credit have expanded about
600 times.

17. Bank Credit Growth Compared with Economic and
Banking aggregates

18. Key Player in Indian Banking Sector
Public sector banks
Allahabad Bank
Andhra Bank
Bank of Baroda
Bank of India
Bank of Maharashtra
Canara Bank
Central Bank of India
Corporation Bank
Dena Bank
IDBI Bank Ltd
Indian Bank
Indian Overseas bank
Oriental Bank of Commerce
Punjab & Sindh Bank
Punjab National Bank
State Bank of India
State Bank of Bikaner & Jaipur
State Bank of Hyderabad
State Bank of Indore
State Bank of Mysore
State Bank of Patiala
State Bank of Travancore
UCO Bank
Syndicate Bank

19. Private banks
• Axis Bank
• Bank of Rajasthan
• Catholic Syrian Bank
• City Union Bank
• Development Credit
Bank
• Dhanalakshmi Bank
• Federal Bank
• HDFC Bank
• ICICI Bank
• IndusInd Bank
• ING Vysya Bank
• Jammu & Kashmir Bank
• Karnataka Bank
• Karur Vysya Bank
• Kotak Mahindra Bank
• Lakshmi Vilas Bank
• Nainital Bank
• Ratnakar Bank
• SBI Comm& Intl Bank
• South Indian Bank
• Tamil Nadu Mercantile
Bank
• Yes Bank

20. Foreign banks
• The Royal Bank of Scotland
• Abu Dhabi Commercial Bank
• American Express Banking
• Corporation
• Antwerp Diamond Bank
• AB Bank
• Bank International Indonesia
• Bank of America
• Bank of Bahrain & Kuwait
• Bank of Ceylon
• Bank of Nova Scotia
• Bank of Tokyo Mitsubishi UFJ
• Barclays Bank
• BNP Paribas
• Calyon Bank
• Chinatrust Commercial Bank
• Citibank
• DBS Bank
• Deutsche Bank
• Hongkong & Shanghai
Banking Corpn
• JP Morgan Chase Bank
• JSC VTB Bank
• Krung Thai Bank
• Mizuho Corporate Bank
• Mashreq Bank

21. Different stages of developments
• From 1786 till today, the journey of Indian Banking System can be segregated into three distinct
phases. They are as mentioned below:
• Early phase from 1786 to 1969 of Indian Banks.Phase-I
• Nationalization of Indian Banks and up to 1991
prior to Indian banking sector Reforms.Phase-II
• New phase of Indian Banking System with the
arrival of Indian Financial & Banking Sector
Reforms after 1991.
Phase-III

22. Innovation in the Banking Industry
Biometric ATM’s
• These ATMs use the finger print of the card holder or eye retina scan as a PIN for verification purpose
• Banks are more focused to put these ATMs in rural areas because biometrics makes it possible for the low
literacy population to use banks
M-Pesa
• M-pesa is a mobile-phone based money transfer and micro financing service, which allows users with a
national ID to use their money easily with a mobile
• Vodafone is expected to launch M-pesa in India, in association with ICICI & HDFC bank
Plastic Money
• Plastic money, cash cards, credit/debit cards and polymer notes will boom as the e-commerce space boom in
India and people get used to the idea of carrying less cash
• Many cards have a micro chip embedded in them which makes it a transit card also
Virtual Banking
• This technology will have a deep impact on the lives of professionals who believe in the life-on-the-go approach
• A user can have access to his/her bank accounts at a nominal cost and at a fast speed from anywhere in the
world

23. Thank You