DOCSLIB.ORG

1 CHAPTER 1 INTRODUCTION 1.1 Definition Banking Is "Accepting, For

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
1 CHAPTER 1 INTRODUCTION 1.1 Definition Banking Is CHAPTER 1 INTRODUCTION 1.1 Definition Banking is "accepting, for the purpose of lending or investment of deposits of money from the public, repayable on demand or otherwise and withdrawable by cheques, draft, order or otherwise." Bank is defined as a person who carries on the business of banking. Banks also perform certain activities which are ancillary to this business of accepting deposits and lending. Since Banking involves dealing directly with money, governments in most countries regulate this sector rather stringently. Banking in India was defined under Section 5(A) as "any company which transacts banking, business" and the purpose of banking business defined under Section 5(B),"accepting deposits of money from public for the purpose of lending or investing, repayable on demand through cheque/draft or otherwise". In the process of doing the above-mentioned primary functions, they are also permitted to do other types of business referred to as Utility Services for their customers (Banking Regulation Act, 1949). 1 1.2 History of Banks Banking in India originated in the last decades of the 18th century. The first banks were The General Bank of India which started in 1786, and the Bank of Hindustan, both of which are now defunct. The oldest bank in existence in India is the State Bank of India, which originated in the Bank of Calcutta in June 1806, which almost immediately became the Bank of Bengal. This was one of the three presidency banks, the other two being the Bank of Bombay and the Bank of Madras, all three of which were established under charters from the British East India Company. For many years the Presidency banks acted as quasi-central banks, as did their successors. The three banks merged in 1925 to form the Imperial Bank of India, which, upon India's independence, became the State Bank of India. Indian merchants in Calcutta established the Union Bank in 1839, but it failed in 1848 as a consequence of the economic crisis of 1848-49. The Allahabad Bank, established in 1865 and still functioning today, is the oldest Joint Stock bank in India. It was not the first though. That honor belongs to the Bank of Upper India, which was established in 1863, and which survived until 1913, when it failed, with some of its assets and liabilities being transferred to the Alliance Bank of Simla. When the American Civil War stopped the supply of cotton to Lancashire from the Confederate States, promoters opened banks to finance trading in Indian cotton. With large exposure to speculative ventures, most of the banks opened in India during that period failed. The depositors lost money and lost interest in keeping deposits with banks. Subsequently, banking in India remained the exclusive domain of Europeans for next several decades until the beginning of the 20th century. Foreign banks too started to arrive, particularly in Calcutta, in the 1860s. The Comptoire d'Escompte de Paris opened a branch in Calcutta in 1860, and another in Bombay in 1862; 2 branches in Madras and Pondicherry, then a French colony, followed. HSBC established itself in Bengal in 1869. Calcutta was the most active trading port in India, mainly due to the trade of the British Empire, and so became a banking center. The Bank of Bengal, which later became the State Bank of India. The first entirely Indian joint stock bank was the Oudh Commercial Bank, established in 1881 in Faizabad. It failed in 1958. The next was the Punjab National Bank, established in Lahore in 1895, which has survived to the present and is now one of the largest banks in India. Around the turn of the 20th Century, the Indian economy was passing through a relative period of stability. Around five decades had elapsed since the Indian Mutiny, and the social, industrial and other infrastructure had improved. Indians had established small banks, most of which served particular ethnic and religious communities. The presidency banks dominated banking in India but there were also some exchange banks and a number of Indian joint stock banks. All these banks operated in different segments of the economy. The exchange banks, mostly owned by Europeans, concentrated on financing foreign trade. Indian joint stock banks were generally undercapitalized and lacked the experience and maturity to compete with the presidency and exchange banks. The period between 1906 and 1911, saw the establishment of banks inspired by the Swadeshi movement. The Swadeshi movement inspired local businessmen and political figures to found banks of and for the Indian community. A number of banks established then have survived to the present such as Bank of India, Corporation Bank, Indian Bank, Bank of Baroda, Canara Bank and Central Bank of India. 3 1.3 Pre-Independence The banks in India were established by the British .The period during the First World War (1914-1918) through the end of the Second World War (1939-1945), and two years thereafter until the independence of India were challenging for Indian banking. The years of the First World War were turbulent, and it took its toll with banks simply collapsing despite the Indian economy gaining indirect boost due to war-related economic activities. At least 94 banks in India failed between 1913 and 1918 as indicated in the following table: Years Number of banks Authorised capital Paid-up Capital that failed (Rs. Lakhs) (Rs. Lakhs) 1913 12 274 35 1914 42 710 109 1915 11 56 5 1916 13 231 4 1917 9 76 25 1918 7 209 1 World War I and its Impact on Banking in India The World War I years (1913 to 1918) were indeed difficult years for the world economy. The alarming inflationary situation that had developed as a result of war financing and concentration on the war led to other problems like neglect of agriculture. During the war period, a number of banks failed. Some banks that failed had combined trading functions with banking functions. More importantly, several of the banks that failed had a low capital base. 4 1.4 Post-independence The partition of India in 1947 adversely impacted the economies of Punjab and West Bengal, paralyzing banking activities for months. India's independence marked the end of a regime of the Laissez-faire for the Indian banking. The Government of India initiated measures to play an active role in the economic life of the nation, and the Industrial Policy Resolution adopted by the government in 1948 envisaged a mixed economy. This resulted into greater involvement of the state in different segments of the economy including banking and finance. The major steps to regulate banking included: In 1948, the Reserve Bank of India, India's central banking authority, was nationalized, and it became an institution owned by the Government of India. In 1949, the Banking Regulation Act was enacted which empowered the Reserve Bank of India (RBI) "to regulate, control, and inspect the banks in India." The Banking Regulation Act also provided that no new bank or branch of an existing bank may be opened without a license from the RBI, and no two banks could have common directors. In 1959, the Government of India passed the State Bank of India (Subsidiary Banks) Act, which enabled SBI to take over eight former State-associated banks as its subsidiaries. Name of the Bank Subsidiary wef 1. State Bank of Bikaner 1st January 1960 2. State Bank of Jaipur 1st January 1960 3. State Bank of Hyderabad 1st October 1959 4. State Bank of Indore 1st January 1968 5 5. State Bank of Mysore 1st March 1960 6. State Bank of Patiala 1st April 1960 7. State Bank of Saurashtra 1st May 1960 8. State Bank of Travancore 1st January 1960 In about 5 years after nationalisation of banks, the branch network expanded by 129 per cent. Nationalisation was also visualised as a process that would entail large scale reorganization of the nationalised banks with only one or two major banks acting as all-India banks catering to the wholesale market for credit and with a monopoly of foreign exchange business However, despite these provisions, control and regulations, banks in India except the State Bank of India, continued to be owned and operated by private persons. This changed with the nationalization of major banks in India on 19th July, 1969. 1.5 Banking Regulations Act, 1949 The Banking Regulation Act was passed as the Banking Companies Act 1949 and came into force wef 16.3.49. Subsequently it was changed to Banking Regulations Act 1949 wef 01.03.66. Summary of some important sections is provided hereunder. Banking means accepting for the purpose of lending or investment of deposits of money from public repayable on demand or otherwise and withdrawable by cheque, drafts order or otherwise 5(i) (b). Banking company means any company which transacts the business of banking 5(i)(c) Transact banking business in India 5 (i) (e). Demand liabilities are the liabilities which must be met on demand and time liabilities means liabilities which are not demand liabilities 5(i)(f) 6 Secured loan or advances means a loan or advance made on the security of asset the market value of which is not at any time less than the amount of such loan or advances and unsecured loan or advances means a loan or advance not secured 5(i)(h). Defines business a banking company may be engaged in like borrowing, lockers, letter of credit, traveller cheques, mortgages etc 6(1). States that no company shall engage in any form of business other than those referred in Section 6(1) & 6(2).
Load more

Recommended publications
  • Introduction Banking in India
    Introduction Banking in India Banking in India originated in the last decades of the 18th century. The first banks were The General Bank of India which started in 1786, and the Bank of Hindustan, both of which are now defunct. The oldest bank in existence in India is the State Bank of India, which originated in the Bank of Calcutta in June 1806, which almost immediately became the Bank of Bengal. This was one of the three presidency banks, the other two being the Bank of Bombay and the Bank of Madras, all three of which were established under charters from the British East India Company. For many years the Presidency banks acted as quasi-central banks, as did their successors. The three banks merged in 1921 to form the Imperial Bank of India, which, upon India’s Independence became the State Bank of India. Origin of Banking in India Indian merchants in Calcutta established the Union Bank in 1839, but it failed in 1848 as a consequence of the economic crisis of 1848-49. The Allahabad Bank, established in 1865 and still functioning today, is the oldest Joint Stock bank in India. (Joint Stock Bank: A company that issues stock and requires shareholders to be held liable for the company’s debt) It was not the first though. That honor belongs to the Bank of Upper India, which was established in 1863, and which survived until 1913, when it failed, with some of its assets and liabilities being transferred to the Alliance Bank of Simla. When the American Civil War stopped the supply of cotton to Lancashire from the Confederate States, promoters opened banks to finance trading in Indian cotton.
    [Show full text]
  • List of Foreign Banks and Bankers
    LIST OF FOREIGN BANKS AND BANKERS In the Principal Towns and Cities of the World except the United States, Canada, Cuba, Philippine Islands, Porto Rico, Hawaii, and Mexico. AFRICA. (AFRICA Continued) ALGERIA. Queenstown...................African Banking Corporation, Limited. Algiers. , Bank de 1’Algerie. BANK OF AFRICA, LIMITED. Compagnie Algerienne. Standard Bank of South Africa, Limited. Thomas Cook & Son. Richmond.......................Standard Bank of South Africa, Limited. Credit Foncier & Agricole d’Algerie. BANK OF AFRICA, LIMITED. Credit Lyonnais. Bone................. Banque de L’Algerie. Salt River.........................BANK OF AFRICA, LIMITED. Compagnie Algerienne. Stutterheim......................BANK OF AFRICA, LIMITED. Credit Foncier et Agricole d’Algerie. Sydney...............................BANK OF AFRICA, LIMITED. Credit Lyonnais. Bougie.............. Worcester..........................African Banking Corporation. Banque de L’Algerie. Nat’l Bank of So. Africa, Limited Compagnie Algerienne. Standard Bank of South Africa, Limited. Credit Foncier <;t Agricole d’Algerie. Constantine. .. Banque de 1’Algerie. CAPE OF GOOD HOPE. Compagnie Algerienne. (South Africa.) Credit Foncier et Agricole d’Algerie. Credit Lyonnais. Vryburg...........................BANK OF AFRICA, LIMITED. Oran.................. .Banque de L’Algerie. Standard Bank of South Africa, Limited. Compagnie Algerienne. EAST AFRICA. Credit Foncier et Agricole d’Algerie. Credit Lyonnais. Beira................................ BANK OF AFRICA, LIMITED. ^hilippeville .. .Banque de 1’Algerie. Standard Bank of South Africa, Limited. Credit Foncier & Agricole d’Algerie. Delagoa Bay.................BANK OF AFRICA, LIMITED. Credit Lyonnais. Lourenco Marques . African Banking Corporation, Limited. Setif................ .Banque de 1’Algerie. Banco Nacional Ultramarino. Compagnie Algerienne. BANK OF AFRICA, LIMITED. Credit Foncier et Agricole d’Algerie. Sfax............ National Bank of So. Africa, Limited. Banque de Tunis. Standard Bank of South Africa, Limited. Banque de L’Algerie.
    [Show full text]
  • S ~~ the Journal
    2~e:rJfk.~e:r~:1Ce:r~:1Ce:r~:1Ce:r~~e:r~~~ - ... S ~~ THE JOURNAL . ~ ~ , .. ~ S ~ .. OF THE 8 ~ SEVENTY-THIRD SESSION ~ « ~ ~ OF THE ~ § NORTH INDIA ~ S~ ANNUAL CONFERENCE a~ « ~ sa~ OF THE ~ ~ METHODIST EPISCOPAL CHURCH ~ S a ~ ~ « ~ ~~~. ~ ~".17 _ HELD AT BAREILLY ~ ~ - Janual}' 7th to 12th. 1937 ~ !f.~Jd~~~~~¥~~Jt:J~~~~~Jd~ BISHOP B. T. BADLEY, D.D., LL.D .. President. THE JOURNAL OF THE • SEVENTY -THIRD SESSION .. OF THE NORTH INDIA ANNUAL CONFERENCE OF THE METHODIST EPISCOPAL CHURCH HELD AT BAREILL Y January 7th to 12th, 1937 ~~=="E~~le~-="E~~'e~~~~ Secretary's Oertificate I I This certifies that the following pages contain a complete and accurate record of the proceedings I of the North India Annual Conference of the Methodist Episcopal Church, at its seventy-third I Session held at Bareilly, India, January 7-12, I 1937, together with the reports, statistics and all other matters required, and that by vote of the I Conference the same is adopted as its Official I Journru. I I ¥~~I L~. ~~"E~~ia~· ~e~~leE~~ • 1 TABLE OF CONTENTS Page I. Officers of the Conference 1 II. Boards and Committees 1 III. Daily Proceedings 4 IV. Disciplinary Questions 15 V. Appointments 1937 19 VI. Roll of Marriage Registrars 23 VII. Reports:- (a) District Superintendents 25 b) Standing Committees and Boards 39 (1) Registrar 39 (2) Board of Education 40 (3) Board of Evangelis1Jl 40 (3) Temperance Committee 40 (4) Church Finance Committee 43 (c) Statistician 1-23 (d) Provident Fund 44 (e) Conference Treasurer 47 <f) Endowment 47 (g) Benevolences 48 (h) Pensions 48 (i) Minutes and Members of Lay Conference .
    [Show full text]
  • 1914 and 1939
    APPENDIX PROFILES OF THE BRITISH MERCHANT BANKS OPERATING BETWEEN 1914 AND 1939 An attempt has been made to identify as many merchant banks as possible operating in the period from 1914 to 1939, and to provide a brief profle of the origins and main developments of each frm, includ- ing failures and amalgamations. While information has been gathered from a variety of sources, the Bankers’ Return to the Inland Revenue published in the London Gazette between 1914 and 1939 has been an excellent source. Some of these frms are well-known, whereas many have been long-forgotten. It has been important to this work that a comprehensive picture of the merchant banking sector in the period 1914–1939 has been obtained. Therefore, signifcant efforts have been made to recover as much information as possible about lost frms. This listing shows that the merchant banking sector was far from being a homogeneous group. While there were many frms that failed during this period, there were also a number of new entrants. The nature of mer- chant banking also evolved as stockbroking frms and issuing houses became known as merchant banks. The period from 1914 to the late 1930s was one of signifcant change for the sector. © The Editor(s) (if applicable) and The Author(s), 361 under exclusive licence to Springer Nature Switzerland AG 2018 B. O’Sullivan, From Crisis to Crisis, Palgrave Studies in the History of Finance, https://doi.org/10.1007/978-3-319-96698-4 362 Firm Profle T. H. Allan & Co. 1874 to 1932 A 17 Gracechurch St., East India Agent.
    [Show full text]
  • Methodist Episcopal Church. North India Conference. Reports And
    THE JOURNAL OF THE SEVENTY-FIFTH SESSION OF THE NORTH " INDIA ANNUAL C·ONFERENCE OF THE METHODIST EPISCOPAL CHURCH ..~ , HELD AT BAREILL Y December 14th to 19th, 1938 LUCKNOW PUBLISHING HOUSE. LUCKNOW. INDIA. 1939. (Print.d for PrirJate Circulation) EaX:E55555a'X'E'====5a'XXEi====~lxeC~==~'XE9e:m OJ Secretary's Oertificate m I This certifies that th: "f:1I0Wing pages contain a I complete and accurat~ record of the proceedings of x x the North India Annual Conference of the Methodist I Episcopal Church, at its seventy·fifth Session held at Bareilly, India, December 14·19,1938, together with I the reports, statistics and all other rna tters required. x x and that by vote of the Conference the same ii ~ I adopted as its Official Journal. ~ I I I Se~etary. I x x OJ lD axe.i5!ii5:=:i3'X lEI======·XXE' ====='xecz==-=:=i3' Xe:uJ TABLE OF CONTENTS ---:0:--- Page 1. Officers of the Conference 149 II. Boards and Committees 149 III. Daily Proceedings 152 IV. Disciplinary Questions 163 V. Appointments 1939 167 VI. Certificates of ordination, of authority to baptise 170 VII. Roll of Marriage Registrars 171 VIn. Reports:- (a) District Superintendents 174 (b) Standing Committees and Boards 188 (1) Registrar 188 (2) Board of Ed ucation 188 (3) Board of Evangelism 116 (c) Statistician 169 (d) Church Finance Committee 193 (e) Provident Fund 121 (f) Conference Treasurer 196 (g) Minutes and Members of Lay Conference 201 IX. Memoirs 133 X. Roll of the Dead 204 XI. His torical :- (a) Sessions of the Conference 206 (b) Conference Programme 208 XII.
    [Show full text]
  • Chapter 1 Rationale of Study
    Chapter 1 Rationale of study Banking in India in the modern sense originated in the last decades of the 18th century. The first banks were The General Bank of India, which started in 1786, and Bank of Hindustan, which started in 1770; both are now defunct. The oldest bank still in existence in India is the State Bank of India, which originated in the Bank of Calcutta in June 1806, which almost immediately became the Bank of Bengal. This was one of the three presidency banks, the other two being the Bank of Bombay and the Bank of Madras, all three of which were established under charters from the British East India Company. For many years the presidency banks acted as quasi-central banks, as did their successors. The three banks merged in 1921 to form the Imperial Bank of India, which, upon India's independence, became the State Bank of India in 1955. Colonial era During the colonial era merchants in Calcutta established the Union Bank in 1839, but it failed in 1840 as a consequence of the economic crisis of 1848–49. The Allahabad Bank, established in 1865 and still functioning today, is the oldest Joint Stock bank in India, it was not the first though. That honors belongs to the Bank of Upper India, which was established in 1863, and which survived until 1913, when it failed, with some of its assets and liabilities being transferred to the Alliance Bank of Simla Foreign banks too started to appear, particularly in Calcutta, in the 1860s. The Comptoir d'Escompte de Paris opened a branch in Calcutta in 1860, and another in Bombay in 1862; branches in Madras and Pondicherry, then a French possession, followed.
    [Show full text]
  • A Study on Customer Satisfaction of Commercial Banks:Case Study on State Bank of India
    IOSR Journal of Business and Management (IOSR-JBM) e-ISSN: 2278-487X, p-ISSN: 2319-7668. Volume 15, Issue 1 (Nov. - Dec. 2013), PP 60-86 www.iosrjournals.org A Study On Customer Satisfaction Of Commercial Banks:Case Study On State Bank Of India Amruth Raj Nippatlapalli Business Management,V.R.College,Vikrama Simhapuri University,India Abstract: Customer satisfaction, a term frequently used in marketing, is a measure of how products and services supplied by a company meet or surpass customer expectation. Customer satisfaction is defined as "the number of customers, or percentage of total customers, whose reported experience with a firm, its products, or its services (ratings) exceeds specified satisfaction goals."Banking in India originated in the last decades of the 18th century. The first banks were The General Bank of India, NOW which started in 1786, and Bank of Hindustan , which started in 1790; both are now defunct. The oldest bank in existence in India is the State Bank of India , which originated in the Bank of Calcutta in June 1806, which almost immediately became the Bank of Bengal. This was one of the three presidency banks, the other two being the Bank of Bombay and the Bank of Madras , all three of which were established under charters from the British East India Company. For many years the Presidency banks acted as quasi-central banks, as did their successors. The three banks merged in 1921 to form the Imperial Bank of India. Keywords: Bankinghistory in INDIA, Conclusion,Customers satisfaction, List of Commercial Banks, Research Methodology, I. Introduction "Customer satisfaction is measured at the individual level, but it is almost always reported at an aggregate level.
    [Show full text]
  • Bank of Baroda, Canara Bank and Central Bank of India
    Banking in India Banking in India Originated in the last decades of the 18th century. The oldest bank in existence in India is the State Bank of India, a government-owned bank that traces its origins back to June 1806 and that is the largest commercial bank in the country. Central banking is the responsibility of the Reserve Bank of India, which in 1935 formally took over these responsibilities from the then Imperial Bank of India, relegating it to commercial banking functions. After India's independence in 1947, the Reserve Bank was nationalized and given broader powers. In 1969 the government nationalized the 14 largest commercial banks; the government nationalized the six next largest in 1980. Currently, India has 96 scheduled commercial banks (SCBs) - 27 public sector banks (that is with the Government of India holding a stake), 31 private banks (these do not have government stake; they may be publicly listed and traded on stock exchanges) and 38 foreign banks. They have a combined network of over 53,000 branches and 17,000 ATMs. According to a report by ICRA Limited, a rating agency, the public sector banks hold over 75 percent of total assets of the banking industry, with the private and foreign banks holding 18.2% and 6.5% respectively History Banking in India originated in the last decades of the 18th century. The first banks were The General Bank of India which started in 1786, and the Bank of Hindustan, both of which are now defunct. The oldest bank in existence in India is the State Bank of India, which originated in the Bank of Calcutta in June 1806, which almost immediately became the Bank of Bengal.
    [Show full text]
  • Grindlay Or the Bank
    GRINDLAYS BANK The following is extracted from the book: ‘100 Years of Banking in Asia and Africa, 1863 – 1963’ by Geoffrey Tyson: Chapter XV. Forming New Alliances.. Published in London in 1963. Prints of Indian scenes are by Grindlay. ROBERT MELVILLE GRINDLAY (1786-1877) was that peculiarly English product, the gifted amateur. He was born at St. Mary-le-Bone, then a village near London and, to put the event into historical perspective, it occurred two years after the passing of Pitt's India Act and two years before Warren Hastings' impeachment and trial began. The years of Grindlay's youth were thus a time when Indian affairs loomed large in English life, and at the age of 17 he secured a nomination as a cadet in the East India Company's Army, arriving in Bombay in 1803. A year later he was promoted to lieutenant, and by 1817 he had reached the exalted rank of captain which remained the high water mark of his military career. At the end of 1820 he retired on half-pay, which for his rank amounted to five shillings a day at that period. By this time he was 34 years old and it might have seemed that, with his relegation to a half-pay officer on the strength of the 2nd battalion of the 7th Bombay Native Infantry, his working days were over. Such were the conditions in which upper middle-class young Englishmen of the period might expect their careers to be moulded. At this stage a foreshortened and undistinguished record as a soldier and some talent as an artist were pretty well all Grindlay had to offer to the world of business or administration.
    [Show full text]
  • Manual on Concurrent Audit of Banks (2016 Edition)
    Manual on Concurrent Audit of Banks (2016 Edition) DISCLAIMER: The views expressed in this publication are those of author(s). The Institute of Chartered Accountants of India may not necessarily subscribe to the views expressed by the author(s). Internal Audit Standards Board The Institute of Chartered Accountants of India (Set up by an Act of Parliament) New Delhi © The Institute of Chartered Accountants of India All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form, or by any means, electronic mechanical, photocopying, recording, or otherwise, without prior permission, in writing, from the publisher. Revised Edition : October, 2016 Committee/Department : Internal Audit Standards Board Email : [email protected] Website : www.icai.org Price : ` 350/- (including CD) ISBN No. : 978-81-8441-128-7 Published by : The Publication Department on behalf of the Institute of Chartered Accountants of India, ICAI Bhawan, Post Box No. 7100, Indraprastha Marg, New Delhi - 110 002. Printed by : Sahitya Bhawan Publications, Hospital Road, Agra-282 003 October/2016/P2017(Revised) Foreword For a growing and dynamic economy like India, that aspires to be globally competitive, a sound and inclusive banking system is extremely important. The stability of various segments in the economy particularly of the financial sectors is directly or indirectly dependent on the banking sector. Indian banks have modernized their processes, restructured their organisations into business verticals, completed Core Banking Solution implementation and launched several products in both the retail and wholesale banking segments to keep pace with the growing challenges. This changing landscape and the emphasis on risk management and control function makes the role of concurrent auditors very critical.
    [Show full text]
  • Banking Development in India
    Journal of Economics and Sustainable Development www.iiste.org ISSN 2222-1700 (Paper) ISSN 2222-2855 (Online) Vol.5, No.24, 2014 Banking Development in India Rimple Saini 1 Dr. S.L. Lodha 2 1. Research Scholar, M.J.R.P. University, Jaipur Rajasthan-India 2. Former Associate Professor Economics, Rajasthan University Jaipur & M.D.S. University, Ajmer, Rajasthan, India. * E-mail of the corresponding author: [email protected] Abstract India has a long history of financial intermediation. The first bank in India was set up in 1770 and named as Bank of Hindustan. The earliest attempt to establish a Central Bank was in 1773. India was also a fore runner in terms of development of financial markets. By independence, India had a fairly well developed commercial banking system in existence. In 1951, there were 566 private commercial banks in India with 4151 branches, the majority of which were confined to large towns and cities. The Reserve Bank of India (the Central Bank of the Country) was established in 1935 as a shareholders institution like the Bank of England. The Reserve Bank of India became a state owned institution from January 1, 1949. It was only in this year that the Banking Regulation Act was enacted to provide a framework for regulation and supervision of commercial banking system. The institution building and development of the financial system was propelled by the planners after independence. The vision was to ensure that sectoral needs of credit to agriculture and industry were met in an organised manner. The RBI was vested with the major, responsibility of developing the institutional infrastructure in the financial system.
    [Show full text]
  • Finance Series[Show]
    Bank From Wikipedia, the free encyclopedia Jump to: navigation, search For other uses, see Bank (disambiguation). "Banker" and "Bankers" redirect here. For other uses, see Banker (disambiguation). This article needs additional citations for verification. Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. (July 2009) Banking A series on financial services Types of banks[show] Bank accounts[show] Bank cards[show] Funds transfer[show] Banking terms[show] Finance series[show] v t e Finance Financial markets[show] Financial instruments[show] Corporate finance[show] Personal finance[show] Public finance[show] Banks and banking[show] Financial regulation[show] Standards[show] Economic history[show] v t e A bank is a financial institution and a financial intermediary that accepts deposits and channels those deposits into lending activities, either directly by loaning or indirectly through capital markets. A bank links together customers that have capital deficits and customers with capital surpluses. Due to their influential status within the financial system and upon national economies, banks are highly regulated in most countries. Most nations have institutionalised a system known as fractional reserve banking, in which banks hold only a small reserve of the funds deposited and lend out the rest for profit. They are generally subject to minimum capital requirements based on an international set of capital standards, known as the Basel Accords. Banking in its modern sense evolved in the 14th century in the rich cities of Renaissance Italy but in many ways was a continuation of ideas and concepts of credit and lending that had its roots in the ancient world.
    [Show full text]