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A
PROJECT REPORT
ON
BANKING SECTOR
BY
MAZHAR KHAN
SUBMITTED TO
PUNJAB TECHNICAL UNIVERITY
Department of Management studies.
Title Page
1.0 ABSTRACT……………………………………….. 1
1.1 INTRODUCTION………………………………… 1
1.2 HISTORY…………………………………………... 2
1.3 FACTS & FIGURES………………………………. 2-3
1.4 MOTIVATION…………………………………….. 4-5
1.5 HYPOTHESIS……………………………………. 5
2.0 WHAT IS THE BANK…………………………… 6-7
2.1 TYPES OF BANK………………………………… 7-8
2.2 FUNCTION OF BANK…………………………… 9-10
2.3 ROLE OF BANK…………………………………. 10-12
2.4 INNOVATION IN BANKING
DUE TO TCHNOLOGY………………………….. 13-16
3.0 BANKING SECTOR IN INDIA………………….. 17-18
3.1 BANKS NETWORK IN INDIA…………………….19
3.2 ROLE OF BANKS IN INDIAN ECONMOMY…… 20
3.3 EVALUATION OF INDIAN BANKING ………… 21
3.4 TOP 20 BANKS IN INDIA………………………. 22
3.5 LAW RELATED TO BANKING……………….. 23
4.0 BANKING SECTOR REFORMS IN INDIA……. 24-25
4.1 NARASIMHAM COMMITTEE………………… 26-30
BANKING REFORMS
4.2 ROLE OF CENTRAL BANK (RBI) ………………..30-31
4.3 RBI- ORGANIZATIONAL STRUCTURE……….. 32
4.4 FUNCTION OF THE…………………………….. 33-35
RESERVE BANK OF INDIA (RBI)
4.5 RBI AND ITS CONTROL ………………………… 35-38
ON COMMERCIAL BANKS
4.6 GLOBAL “GDP” GROWTH…………………….. 38
5.0 7’ P’s OF BANKS………………………………. 39
5.1 SWOT ANALYSIS OF ………………………… 40
BANKING INDUSTRY…
5.2 THE CHALLENGES AHEAD…………………. 41-42
5.3 CONCLUSION………………………………….. 42
5.4 BIBLIOGRAPHY………………………………… 43
1.0 ABSRACT
1.1 INTRODUCTION
To curb the liquidity crises the RBI will continue to initiate liquidity
measures as long as the current unusually tight domestic liquidity
environment prevails. The current step to curb these being lowering
of interest rates and reducing the PLR. The BOP balance of payment
deficit-at a time when domestic credit demand is very high- is
resulting in vicious loop of reduced access to liquidity, showing
growth, and increased risk adversion in the financial system.
In present situation down fall in one sector one day leads to a negative
impact on the other sector thus all together everyone feel the impact
of the financial crises with the result of the current recession which
started in US and slowly and gradually due to linked global world
have impacted everyone.
Solution for the problem still remain at the mind of every one, still
everyone facing the impact of recession but now long is the major
question which is of great importance.
1.5 HYPOTHESIS
While the question may seen elementary, the answer can be quite
complex, understanding what banking is all about will help the paper
to illustrate the role of banks better.
o Credit cards
o Personal Loans
o Home and car loans
o Mutual fund
o Business Loans
o Safe deposit boxes
o Debit cards
o Trust services
o Signature Guarantees.
…...and many other investment services.
5. Anywhere Banking
6. Anytime Banking
The ATM facilities enable customers to transact with the bank any
time all through the 24 hours of the day.
7. Home Banking
8. Mobile Banking
9. SMS Banking
Balance enquiry
Last three transactions
Cheque payment status
Cheque book request
Statement request
Demat- free balance holdings
Demat- last two transactions
Bill payment
SMS banking is also very much safe. First, one authenticates the
mobile number with the authentications key. Second, the customer
uses secret mobile personal Identification Number (MPIN)
10. Telebanking
This card is similar to the commonly used plastic card, but can be
used for online transaction. SBI has applied for RBI’s approval to
start issuance of internet card.
Central Bank:
Reserve Bank of India the central bank that is fully owned by the
Government. It is governed by a central board (head by a
Governor) appointed by the central Government. It issues
guidelines for the functioning of all banks operating within the
country.
Private Banks:
The co-operative sector is very much useful for rural people. The
co-operative banking sector is divided into the followings
categories.
Prior to 1969, all bank, except state Bank of India and its seven
associate banks were privately owned/. However there was a
perception among policy makers that under private ownership, too
many rural and semi urban-area remained unserved by banks,
whereas the banking industry has to be developed to “touch the lives
of millions”. Further as India became an increasing planned economy,
policy makers felt that it would be difficult t undertake credit
planning unless the link control of industry and banks in the same
(private) banks is snapped by the nationalization Act of 1969 which
caused 14 largest privately owned domestic banks to be nationalized
in 1980 under the same Act, the Government of India acquire
ownership of 6 more private banks, bringing the total number of
nationalized banks to 20.
Not withstanding the positive role played by the banking sector since
nationalization in institutionalization savings and becoming a source
of credit to the small borrower, the cumulative effect of excessive
focus on quantitative achievement and social obligations took a tall
on profitability and efficiency Rates of Return became low by
international standards, the capital base was eroded, NPS’s were on
the rise, and customer service was below exception. These conditions
led to gradually liberalization of banking sector reforms of 1992 with
the acceptance of key recommendations of the Narasimham
Committee.
3.4 TOP 20’S BANKS IN INDIA
INTRODUCTION
Just a few decades ago, one would not have imagined about
the dramatic transformation that has taken/are taking place in the
banking industry. Perhaps no, where in the world de we have a record
of such a massive growth and wide ranging changes that have taken
place during the past two decades.
Sea change
PHASE-I
PHASE-II
INTRODCUTION:
1. Issue of Notes
The RBI is the sole authority for issuing bank notes in the
country which constitutes a significant part of the money
supply. The notes are issued in suitable denominations which
constitute the legal tender. Similarly, the RBI destroy
currency and coins not fir for circulation.
3. Banker’s Bank
The RBI does not deal with the public directly as the
Commercial Banks do. It is necessary to understand the difference
between the Commercial Banks and the Central Bank of the
country. The commercial bank act as a link between the public and
the Central bank and operate with the main motive of profits.
However, the Central Bank’s main objective is the economic
welfare of the country. The Reserve Bank of India is the monetary
authority of the country. It may be noted that monetary policy is
that part of the economic policy which regulated the level of
money supply in the economy in such a way to achieve the policy
objective of price stability, economic growth and equilibrium in
balance of payments position. Since the banks are the custodian of
the money supply, RBI operates the monetary policy by are the
custodian of the money supply, RBI operates the monetary policy
by controlling the Commercial Banks through various instruments
like Bank Rate, Open Market Operations etc. RBI also acts as the
lender of last resort t the other banks.
5. Credit Control
India being a predominantly agrarian economy, the RBI manages
the credit control on the basis of busy and slack season credit
policy generally coinciding with the sowing and harvesting seasons
of the country. Meeting are help with the bankers twice a year
during which the credit policy for the season is announced and
implementation is monitored. Credit control is such a unique and
importance function that through it all other functions are made to
serve the common purpose of the monetary policy objective of
economic growth with price stability. In order to regulate the
supply of credit RBI uses quantitative and qualitative instruments
or techniques of credit control. The qualitative techniques include
Bank Rate, Open Market Operation, Cash Reserve and Statutory
Liquidity Ratio requirements.
a) Bank Rate:
Section 49 of the RBI Act stipulated that the RBI shall make
public from time to time the standard rate at which it is prepared to
buy or discount bill of exchange or other commercial paper eligible
for purchase under this Act. In a developed money market
condition the Bank Rate acts as a pointer to general interest rate
structure in the economy and serves the purpose of regulatory
norm to which the money market as a whole should adjust. Thus
the Bank Rate is a very powerful instrument of credit control
indicative of dear money or cheap money policy followed by the
Central Bank of the country. The efficacy of Bank Rate depends
upon the extent to which commercial banks resort to financial
accommodation from the Central Bank. In the Indian conditions,
the RBI has not been using Bank Rate as a main instrument of
credit control because until recently we had a system of
administered interest rates for all types of commercial lending, and
deposits.
(Percentage)
PRODCUT
PROMOTION
PRICING
PHYSICAL EVIDENCE
PALCE
PEOPLE
PROCESS
5.1 SWOT ANALYSIS OF BANKING
INDUSTRIES
Strength Weakness
Opportunity Threat
Let me now turn to the major challenges facing the Banking system in
the country, particularly in the wake of the global financial crisis.
5.3 CONCLUSION:
5.4 BIBLIOGRAPHY
Book reference:
Internet:
http://finanance.indiamart.com/investment
in India/easy banking.html
www.rbi.org.in
www.wikipodia.org
www.imf.org.in
www.google.com
Newspapers:
Economic Times.
*≈ Thank you ≈*