IBPS - BANKING/INSURANCE EXAMINATIONS – RAPID READING EXERCISE
BANKING HISTORY IN THE COUNTRY
BANKING HISTORY IN THE COUNTRY
v The first bank of limited liability managed by an Indian national was – Oudh commercial bank in 1881
v Punjab National Bank was established in 1894
v Imperial Bank of India was the largest bank in the country
v Imperial Bank of India was nationalized during 1955 and renamed as State Bank of India
v Seven SBI associate banks were formed during the year, 1959
v The step towards social banking was taken during 19.07.1969
v 14 banks were nationalized on 19.07.1969
v 6 banks were nationalized during the second phase on 15.04.1980
v The scheduled commercial banks are those banks which are
o Included in the second schedule of RBI Act 1934
o These banks have a paid up capital and reserves of an aggregate value of not less than Rs. 5 lakhs
o They got their banking licences through Banking regulation act 1949 for conducting banking business
o They have been registered either under companies act or cooperatives act
v The following are the scheduled commercial banks:
o All commercial banks – public sector banks, SBI group, old and private sector banks, foreign banks, regional rural banks, state cooperative banks
v Non scheduled banks are those banks which are not included in the second schedule of RBI act, 1934
v RESERVE BANK OF INDIA
v Reserve Bank of India is the central bank of the country
v RBI was set up by on the basis of Hilton Young Commission recommendations during 1st April, 1935
v RBI was established by an act of Parliament during 1934
v The first Governor was Sir Osborne Smith
v RBI was nationalized during 1949
v The first Indian Governor of Reserve Bank of India was – CD Deshmuk
v RBI has its head quarters at Mumbai
v RBI has four regional centres at Mumbai, Kolkata, Chennai and Delhi
v There are fourteen directors in central board of directors
v Apart from the above, RBI has one governor, four deputy governors and one government official
v The following are the main functions of Reserve Bank of India:
o Regulation of credit
o Issue of currency notes and coins
o Regulation of foreign exchange
o Banker to the government and commercial bank
o Lender of last resort
o Banker’s bank
o Agent of the government
v Since 1952, the monetary policy of RBI emphasise on twin goals
o Economic growth
o Inflation control
v The instrument of credit control by RBI can be bifurcated into:
o Qualitative credit control/selective credit control
o Quantitative credit control
v Currency notes other than one rupee notes and coins are issued by RBI
v FUNCTIONS OF RESERVE BANK OF INDIA
v Reserve Bank of India has the following functions:
o Traditional functions
o Development functions
o Regulatory functions
v Traditional functions of RBI are:
o Issue of currency
o Forex management
o Other functions which include: export assistance, clearing house operations, exchange of currency, transfer of currency, publication of statistics and other information, training in banking
v The development banks include:
o Agriculture development
o Promotion of industrial finance
o Promotion of export through refinance
o Development of bill market
o Development and reposition of banking system
v The regulatory functions include:
o Qualitative credit control
o Bank rate
o Differential rate of interest
o Open market operations
o Maintenance of CRR
o Maintenance of SLR
o Direct action
o Credit authorization scheme
o Moral persuasion
v BANKS IN INDIA
v 14 banks which were nationalized on 19.07.1969 are:
o Central Bank of India
o Bank of Maharashtra
o Dena Bank
o Punjab National Bank
o Syndicate Bank
o Canara Bank
o Indian Bank
o Indian Overseas Bank
o Bank of Baroda
o Union Bank of India
o Allahabad Bank
o United Bank of India
o United Commercial Bank
o Bank of India
v 6 banks which were nationalized on 15.04.1980 were:
o Andhra Bank
o Punjab and Sind Bank
o Vijaya Bank
o Corporation Bank
o Oriental Bank of Commerce
o New Bank of India
v New Bank of India merged with Punjab National Bank
v Old private sector banks in the country are:
o City Union Bank Limited
o Tamilnadu Mercantile Bank Limited
o SBI Commercial and International Bank Limited
o Federal Bank Limited
o Jammu and Kashmir Bank Limited
o Karnataka Bank Limited
o Karur Vysya Bank Limited
o Lakshmi Vilas Bank Limited
o Nainital Bank Limited
o The Ratnakar Bank Limited
o The South Indian Bank Limited
o ING Vysya Bank Limited
o Catholic Syrian Bank Limited
o Dhanalakshmi Bank Limited
v The new private sector banks in the country are:
o Axis Bank Limited
o Development Credit Bank Limited
o HDFC Bank Limited
o ICICI Bank Limited
o Indus Ind Bank Limited
o Kotak Mahindra Bank Limited
o Yes Bank Limited
v The minimum capital for new private sector banks were fixed at Rs. 100 crore
v The following include SBI group banks:
o State Bank of India
o State Bank of Hyderabad
o State Bank of Travancore
o State Bank of Bikaneer and Jaipur
o State Bank of Mysore
v The foreign banks in the country are: 32
v Foreign banks have 310 branches across the country
v QUANTITATIVE CREDIT CONTROL OF RESERVE BANK OF INDIA
v The purpose of quantitative credit control are:
o To control the volume of credit
o To control the inflationary and deflationary pressures caused by expansion and contraction of credit
v The following are the different qualitative credit control strategies:
o Bank rate
o Cash reserve ratio
o Statutory liquidity ratio
o Repo rate
o Open market operations
o Reverse repo rate
v Bank rate
o It is called as the rediscount rate
o It is the rate at which RBI gives finance to commercial banks
v Cash reserve ratio is effective from 1962
v According to CRR banks have to deposit with RBI CRR-cash without any floor rate or ceiling rate
v Statutory Liquidity ratio
o It is the rate of liquid asset which all commercial banks have to keep in the form of cash, gold and unencumbered approved securities equal to not less than 25 percent of their total demand and time deposit liabilities
v Repo rate is the rate at which RBI lends short term money to the banks against the securities and it injects liquidity in the market
v Open market operations:
o Under open market operations, when RBI sells government securities in the market, it withdraws money liquidity from the market and thus reduces volume of credit leading to control of inflation
v Reverse repo rate – It is the rate at which banks park short term excess liquidity with the RBI. Reverse repo rate withdraws liquidity from the market
v QUALITATIVE CREDIT CONTROL RESERVE BANK OF INDIA
v Qualitative/selective credit controls are used
o To control and check the rising tendency of the prices of certain individual commodities of common use
v Three kinds of qualitative credit control measures are:
o Minimum margins for lending against specific securities
o Ceiling on the amount of credit for certain purposes
o Discriminatory rate of interest charged on certain types of advances
v FOREIGN PRESENCE
v The following are the details about foreign presence of Indian Banks
o 22 Indian banks – 6 private banks and 16 public sector banks
o 52 countries with a network of 244 offices as on 30.6.2011
o SBI has the largest network of foreign offices followed by Bank of Baroda (August, 2011)
o Among private sector banks, ICICI bank has the largest foreign presence
v BANKING OMBUDSMAN
v Banking Ombudsman scheme is in operation since 1995
v Banking Ombudsman works under the control and supervision of Reserve Bank of India
v The scheme is applicable to all commercial banks, Regional Rural Banks and scheduled cooperative banks in the country
v The Banking Ombudsman is currently having their offices at 15 centers
v STATE BANK OF INDIA
v Imperial Bank of India was created during the year 1921 by amalgamation of three presidency banks called as Bank of Bengal, Bank of Bombay and Bank of Madras
v Imperial Bank of India was renamed as State Bank of India and SBI was nationalized during 1955
v SBI has five subsidiaries namely:
o State Bank of Bikaneer and Jaipur
o State Bank of Hyderabad
o State Bank of Mysore
o State Bank of Patiala
o State Bank of Travancore
v State Bank of India is ranked 292 in the Fortune 500 companies and is one of the four bigs – ICICI Bank, Punjab National Bank,
v PRIVATE SECTOR BANKS
v Private sector banks can be called as old private sector banks and new private sector banks
v Banking regulation act 1949 was amended during 1993
v Banking regulation act 1949 was again amended during 2001
v 10 new banks were set up in the private sector after the 1993 guidelines and 2 new banks after 2001 revised guidelines
v Top five private sector banks in the country as on date are:
o ICICI Bank – 1991 – VADODARA
o HDFC Bank – 1994 – Mumbai
o Axis Bank – 1994 – Ahmedabad
o Kotak Mahindra Bank – 1985 – Mumbai
o Yes Bank – 2004 – Mumbai
v CRITERIA FOR NEW PRIVATE SECTOR BANKS
v Revised guidelines were enacted during 2001 for the establishment of new private sector banks
v The guidelines are:
o The bank should have minimum networth of Rs. 100 crore
o The promoters holding should be a minimum of 25% of the paid up capital
o Within three years of the starting of the operations, the bank should offer shares to the public
v The first private sector bank to receive licence after 1993 economic reforms was – Housing Development Finance Corporation
v PRIORITY SECTOR LENDING
v Dr. K.S. Krishnaswamy chaired the working group on priority sector lending in the country
v The broad categories of advances under priority sector lending now include – agriculture, MSME sector, microcredit, education and housing
v The priority sector lending targets have been fixed as mentioned below:
o Domestic commercial banks – 40% (Nationalised banks, SBI group and private sector banks)
o Foreign banks – 32%
o Regional Rural Banks – 40%
v DIFFERENTIAL INTEREST RATE SCHEME
v Differential interest rate scheme was introduced during 1972
v Public sector banks are required to fulfill the target of at least 1% of the previous year advances
v Loans should be weaker sections at 4% p.a.
0 comments:
Post a Comment