Go Back   ManagementParadise.com | Management & Business Education Learning Platform Upload / Download Banking and Insurance Projects and Notes > Innovations in banking and insurance.

Banking Industry Overview

Discuss Banking Industry Overview within the Innovations in banking and insurance. forums, part of the Upload / Download Banking and Insurance Projects and Notes category; Banking Industry Overview Although some form of banking, mainly of the money-lending type, has been in existence in India since ...

Reply

 

Thread Tools Display Modes
Banking Industry Overview
Old
 (1 (permalink))
Sunanda K. Chavan
sunandaC has a spectacular aura aboutsunandaC has a spectacular aura aboutsunandaC has a spectacular aura about
 
sunandaC
Management Paradise Guru
 
Status: Offline
Posts: 6,680
Join Date: Jul 2010
Banking Industry Overview - September 15th, 2010

Banking Industry Overview


Although some form of banking, mainly of the money-lending type, has been in existence in India since ancient times, it was only over a century ago that proper banking began.

The earliest institutions which undertook banking business under the British regime were agency houses which carried on banking business, in addition to their trading activities.

With a view to bring commercial banks into the mainstream of economic development with definite social obligations and objectives, the Government issued ordinance on 19 July 1969 acquiring ownership and control of 14 major banks in the country, with deposits exceeding Rs 50 crores each. Six more commercial banks were nationalised from 15 April 1980. The objectives of public sector banking system were outlined on 21 July 1969.

The three decades after nationalization saw a phenomenal expansion in the geographical coverage and financial spread of the banking system in the country. As certain rigidities and weaknesses were found to have developed in the system, during the late eighties the Government of India felt that these had to be addressed to enable the financial system to play its role in ushering in a more efficient and competitive economy.

In the post-nationalization era, no new private sector banks were allowed to be set up. However, in 1993, in recognition of the need to introduce greater competition, which could lead to higher productivity and efficiency of the banking system, new private sector banks were allowed to be set up in the Indian banking system.


Commercial Banking System in India consisted of 302 scheduled banks (including foreign banks) and one non-scheduled bank at the end of March 1999. Over the period March 1998 to March 1999, the number of scheduled banks increased by three while that of non-scheduled banks remained unchanged at one. Of the scheduled banks, 223 are in public sector and these account for about 83 per cent of the deposits of all scheduled commercial banks. In the public sector banking system, there are 196 regional rural banks, specially set up to increase the flow of credit to small borrowers in the rural areas.

These banks have specified areas of operations usually limited to two to three districts. They also undertake some other commercial banking business. The remaining 27 banks in the public sector are regular commercial banks and transact all types of commercial banking business. Some important indicators in regard to progress of commercial banking in India during the recent past are given in table 13.4.

Amongst the public sector banks, as on March 1999, the State Bank of India (SBI) group (SBI and its seven associates) is the biggest unit with 13,290 offices and deposits exceeding 1,39,000 crore aggregating Rs 1,71,782.48 crore and advances of Rs 1,14,430.37 crore.

In the associate banks, SBI owns either the entire or the majority of share capital. The SBI and its associate banks as a group account for around 31.9 per cent of aggregate banking business (aggregate of deposits and advances) conducted by the public sector banks and around 26.2 per cent of the aggregate business of the entire banking system. The remaining 19 banks in the public sector are more nationalised in 1969 and 1980 respectively

Industry Characteristics

The banking industry has moved gradually from a regulated environment to a deregulated market economy. The market developments kindled by liberalization and globalization have resulted in changes in the intermediation role of banks. The pace of transformation has been more significant in recent times with technology acting as a catalyst. While the banking system has done fairly well in adjusting to the new market dynamics, greater challenges lie ahead.

The financial system is the lifeline of the economy. The changes in the economy get mirrored in the performance of the financial system, more so of the banking industry. Liberalization and de-regulation process started in 1991-92 has made a sea change in the banking system. From a totally regulated environment, we have gradually moved into a market driven competitive system. Our move towards global benchmarks has been, by and large, calibrated and regulator driven. The pace of changes gained momentum in the last few years.

Structure and ownership pattern would undergo changes. There would be greater presence of international players in the Indian financial system. Similarly, some of the Indian banks would become global players. Government is taking steps to reduce its holdings in Public sector banks to 33%.

However the indications are that their PSB character may still be retained.
Technology as an enabler is separately discussed in the report. It would not be out of place, however, to state that most of the changes in the landscape of financial sector discussed above would be technology driven.

In the ultimate analysis, successful institutions will be those, which continue to leverage the advancements in technology in re-engineering processes and delivery modes and offering state-of-the-art products and services providing complete financial solutions for different types of customers.

Banks will take on competition in the front end and seek co-operation in the back end, as in the case of networking of ATMs. This type of competition will become the order of the day as Banks seek to enlarge their customer base and at the same time to realize cost reduction and greater efficiency.
Advertisements

Friends: (0)
Reply With Quote
Re: Banking Industry Overview
Old
 (2 (permalink))
Jitendra Mazee
jiten005 is an unknown quantity at this point
 
jiten005
Management Paradise Guru
Status: Offline
Posts: 5,316
Join Date: Jan 2018
Re: Banking Industry Overview - February 7th, 2018

Quote:
Originally Posted by sunandaC View Post
Banking Industry Overview


Although some form of banking, mainly of the money-lending type, has been in existence in India since ancient times, it was only over a century ago that proper banking began.

The earliest institutions which undertook banking business under the British regime were agency houses which carried on banking business, in addition to their trading activities.

With a view to bring commercial banks into the mainstream of economic development with definite social obligations and objectives, the Government issued ordinance on 19 July 1969 acquiring ownership and control of 14 major banks in the country, with deposits exceeding Rs 50 crores each. Six more commercial banks were nationalised from 15 April 1980. The objectives of public sector banking system were outlined on 21 July 1969.

The three decades after nationalization saw a phenomenal expansion in the geographical coverage and financial spread of the banking system in the country. As certain rigidities and weaknesses were found to have developed in the system, during the late eighties the Government of India felt that these had to be addressed to enable the financial system to play its role in ushering in a more efficient and competitive economy.

In the post-nationalization era, no new private sector banks were allowed to be set up. However, in 1993, in recognition of the need to introduce greater competition, which could lead to higher productivity and efficiency of the banking system, new private sector banks were allowed to be set up in the Indian banking system.


Commercial Banking System in India consisted of 302 scheduled banks (including foreign banks) and one non-scheduled bank at the end of March 1999. Over the period March 1998 to March 1999, the number of scheduled banks increased by three while that of non-scheduled banks remained unchanged at one. Of the scheduled banks, 223 are in public sector and these account for about 83 per cent of the deposits of all scheduled commercial banks. In the public sector banking system, there are 196 regional rural banks, specially set up to increase the flow of credit to small borrowers in the rural areas.

These banks have specified areas of operations usually limited to two to three districts. They also undertake some other commercial banking business. The remaining 27 banks in the public sector are regular commercial banks and transact all types of commercial banking business. Some important indicators in regard to progress of commercial banking in India during the recent past are given in table 13.4.

Amongst the public sector banks, as on March 1999, the State Bank of India (SBI) group (SBI and its seven associates) is the biggest unit with 13,290 offices and deposits exceeding 1,39,000 crore aggregating Rs 1,71,782.48 crore and advances of Rs 1,14,430.37 crore.

In the associate banks, SBI owns either the entire or the majority of share capital. The SBI and its associate banks as a group account for around 31.9 per cent of aggregate banking business (aggregate of deposits and advances) conducted by the public sector banks and around 26.2 per cent of the aggregate business of the entire banking system. The remaining 19 banks in the public sector are more nationalised in 1969 and 1980 respectively

Industry Characteristics

The banking industry has moved gradually from a regulated environment to a deregulated market economy. The market developments kindled by liberalization and globalization have resulted in changes in the intermediation role of banks. The pace of transformation has been more significant in recent times with technology acting as a catalyst. While the banking system has done fairly well in adjusting to the new market dynamics, greater challenges lie ahead.

The financial system is the lifeline of the economy. The changes in the economy get mirrored in the performance of the financial system, more so of the banking industry. Liberalization and de-regulation process started in 1991-92 has made a sea change in the banking system. From a totally regulated environment, we have gradually moved into a market driven competitive system. Our move towards global benchmarks has been, by and large, calibrated and regulator driven. The pace of changes gained momentum in the last few years.

Structure and ownership pattern would undergo changes. There would be greater presence of international players in the Indian financial system. Similarly, some of the Indian banks would become global players. Government is taking steps to reduce its holdings in Public sector banks to 33%.

However the indications are that their PSB character may still be retained.
Technology as an enabler is separately discussed in the report. It would not be out of place, however, to state that most of the changes in the landscape of financial sector discussed above would be technology driven.

In the ultimate analysis, successful institutions will be those, which continue to leverage the advancements in technology in re-engineering processes and delivery modes and offering state-of-the-art products and services providing complete financial solutions for different types of customers.

Banks will take on competition in the front end and seek co-operation in the back end, as in the case of networking of ATMs. This type of competition will become the order of the day as Banks seek to enlarge their customer base and at the same time to realize cost reduction and greater efficiency.
Well, i am also going to share some important information on Banking Industry Overview which would help others. Well, i also appreciate your work for sharing information on Banking Industry Overview.
Attached Files
File Type: pdf Banking Industry Overview.pdf (312.3 KB, 0 views)
Friends: (0)
Reply With Quote
Reply

Bookmarks

Tags
banking, banking industry, banking overview, industry, industry overview, overview
Related to Banking Industry Overview
 

Similar Threads

Thread Thread Starter Forum Replies Last Post
TOOTHPASTE INDUSTRY: AN OVERVIEW anoop202 Effective Methods Of Communication (EC). 7 December 29th, 2015 03:17 PM
overview of indian banking sector smartguy Service Sector Management (S.S.M) 28 April 3rd, 2011 10:29 PM
e banking in india overview abidmanknoo Upload / Download Banking and Insurance Projects and Notes 2 March 6th, 2010 09:15 PM
Finance and Banking Overview rahul_parab2006 Financial Management 3 January 1st, 2010 03:36 PM
IT Industry Overview rahul_parab2006 Infosystems 2 August 2nd, 2009 11:22 PM
 


Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is On
Trackbacks are On
Pingbacks are On
Refbacks are Off


ManagementParadise.com is not responsible for the views and opinion of the posters. The posters and only posters shall be liable for any copyright infringement.



Search Engine Optimization by vBSEO ©2011, Crawlability, Inc.