Structure of indian banking system

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In this article we will discuss about:- 1. Introduction to the Banking Industry 2. Need of the Banks 3. History 4. Structure 5. Growth 6. Banking and Insurance Sectors after Liberalization 7. Challenges 8. Strategic Options to Cope with the Challenges. Contents: • Introduction to the Banking Industry • Need of the Banks • History of Indian Banking System • Structure of Indian Banking Industry • Growth of Banking in India • Banking and Insurance Sectors after Liberalization • Challenges Faced by Banking Industry • Strategic Options to Cope with the Challenges 1. Introduction to the Banking Industry: The rapid transformation in the banking industry over the last decade has made the industry stronger, cleaner, transparent, efficient, faster, disciplined and a lot more competitive. The banking industry in India has a huge canvass of history, which covers the traditional banking practices from the time of Britishers to the reforms period, nationalization to privatization of banks and now increasing numbers of foreign banks in India. Therefore, banking in India has been through a long journey. Rural banking and micro financing are the two gateways for the Indian banks to grow and compete with international banks. The use of technology has brought a revolution in the working style of the banks and it has pervaded each and every aspect of human life in a drastic manner. Advent of anytime, anywhere banking has become possible due to technology adoption. Life has changed enormously ...

https://bit.ly/2XgFPBA The article is by Neelam Prusty of Madhusudan Law College, Cuttack. The article talks about the challenges faced by the Indian banking system.  “Financial institutions must be able to deliver an easy to navigate, a seamless digital platform that goes for beyond a miniaturized online banking offering.” –Jim Marous • • • • • • • • • • • • • • • • • • • • • • • • • • Introduction The banking sector in India has a huge canvas of history. It includes the traditional banking practices from the time of Zamindar to Independence of India, nationalization of banks to the privatization of banks and now the increasing numbers of foreign banks in India. The banking sector of India has been through a long journey of ups and downs. The banking sector in India has also reached a height with the changing times. The use of technology has brought a revolutionary change in the working of the banks. Still, the fundamental features of the banking sector in India i.e. trust, faith and the confidence of the people on the institution remain the same. The majority of the banks are successful in holding the assurance of the shareholders as well as stakeholders. However, a new kind of risk exposure is carried with the changing aspects of the banking sector. In recent time, some complicated conditions such as bankruptcy of banking & financial institutions, the debt crisis in major economies of the world have been proved to be the major problems for the world economy which ...

The Banking system of a country is an important pillar holding up the financial system of the country’s economy. The major role of banks in a financial system is the mobilization of deposits and disbursement of credit to various sectors of the economy. The existing, elaborate banking structure of India has evolved over several decades. Reserve Bank of India is the central bank of the country and regulates the banking system of India. The structure of the banking system of India can be broadly divided into scheduled banks, non-scheduled banks and development banks. Banks that are included in the second schedule of the Reserve Bank of India Act, 1934 are considered to be scheduled banks. All scheduled banks enjoy the following facilities: • Such a bank becomes eligible for debts/loans on bank rate from the RBI • Such a bank automatically acquires the membership of a clearing house. All banks which are not included in the second section of the Reserve Bank of India Act, 1934 are Non-scheduled Banks. They are not eligible to borrow from the RBI for normal banking purposes except for emergencies. Scheduled banks are further divided into commercial and cooperative banks.

• • • • What is being done to strengthen India's banking system? What is being done to strengthen India's banking system? Banks will need to rework their business strategies, innovate on products tailored to customer needs and improve efficiency in the delivery of customer-centric financial services Image: Shutterstock Another article on Banking Sector? Well, the Punjab National Bank (PNB) failure to deal with the Nirav Modi default showcases the weakness in the banking system and this article highlights the steps that the Government proposes to undertake to strengthen the banking system in India so as to avoid such defaults in the future. Banking in India originated in the last decade of the 18th century. Among the first banks were the Bank of Hindustan, which was established in 1770 and liquidated in 1832 and the General Bank of India, established in 1786 but failed in 1791. The largest bank, and the oldest still in existence, is the State Bank of India. Today, our banking system is divided into commercial banks, regional rural banks and cooperative banks. Commercial banks play an important role in the financial system and the economy. As a key component of the financial system, banks allocate funds from savers to borrowers in an efficient manner, thereby making the overall economy more efficient. India requires stability, efficient service delivery, inclusion and a monetary policy transmission from our banking system. Recognising this need, the Government has, over the ...

Banking structure is regulated for the promotion of financial stability and economic development. Though post-independence era witnessed increasing public sector ownership of banks and a combination of joint-stock companies, subsidiaries, cooperatives and corporations, it does not guarantee optimal banking structure that the financial reforms sought to achieve since 1991. This chapter focuses on changing the dimension of banking structure on various quantitative measures: (a) density-ratio, (b) relative size of banking system, (c) size distribution of banks within the banking system and (d) geographical concentration . Each of these indicators recorded a positive gain, in some more than double, approaching towards optimality in banking structure for better performance than otherwise would have been possible. Keywords • Banking structure • Optimal banking structure • Productive efficiency • Allocative neutrality • Credit allocation • Outreach and accessibility • Basu, C.R. 1978. Central Banking in a Planned Economy: The Indian Experiment. New Delhi: Tata McGraw-Hill. • Bhatia, R.C. 1983. Banking Structure and Performance. Bombay: NIBM. • Bishnoi, T.R., and Sofia Devi. 2015. Mergers and Acquisitions of Banks in Post-Reform India. Economic and Political Weekly 50 (37): 50–58. • Bishnoi, Tulchha Ram. 1988. Size and Performance of Commercial Banks in India—1961 to 1982. Ph.D. thesis, Department of Economics, University Of Mumbai. • Camron, R. (ed.) 1972. Banking and Economic De...