IBPS PO 2014 BANKING AWARENESS NOTES Bank Rate : 9.0% Repo Rate : 8.0% Reverse Repo Rate : 7.0% Marginal Standing Facility Rate : 9.0% CRR : 4% SLR : 22% Base Rate : 10.00% - 10.25% Savings Deposit Rate : 4.00% Term Deposit Rate : 8.00% - 9.05% 91 day T-bills : 8.5201 % 182 day T-bills : 8.6613% 364 day T-bills : 8.6485 % 364 day T-bills : 8.6485 % Call Rates : 4.00% - 8.70% (ONE BANK FROM ANOTHER BANK) AS ON 02ND OCT.2014 Types of Banks in India and their functions Reserve Bank of India: RBI is the Central Bank of India, which acts as a banker to the government It is also called as ―Bankers bank‖, because all banks will have accounts with RBI. It provides funds to all banks hence it is called as BANKERS BANK RBI was established by an act of Parliament in 1934 It has four zonal offices at Mumbai, Kolkata, Chennai and Delhi and 19 regional offices Current Governor: Dr. Raghuram Rajan Deputy Governors: H R Khan, Dr Urjit Patel, R Gandhi and S S Mundra Head office: Mumbai Functions: Issues currency notes Acts as bankers bank Maintain foreign exchange reserves Maintains CRR and SLR Its affairs are regulated by 21-member central board of directors: Governor (Dr. Raghuram Rajan), 4 deputy Governors, 2 Finance Ministry representatives, 10 Government-nominates directors,4 directors to represent local boards Scheduled Commercial Banks: Scheduled Commercial banks are State Bank of India and its associates (State bank of India has got 7 subsidiaries they are State bank of Hyderabad, State bank of Mysore, State bank of Travancore, State bank of Indore, State bank of Sourashtra, State bank of Bikaneer, State bank of Jaipur Nationalized Banks Private Sector Banks Regional Rural Banks Urban Cooperative Banks State Cooperative Banks Public Sector Banks: State Bank of India and associate banks + 20 nationalized banks are called public sector banks Nationalized Banks: Nationalized banks are the banks which are owned and run by government of India There are total of 20 nationalized banks In 1969, 14 banks were nationalized In 1980, 6 banks were nationalized Nationalized banks are Allahabad bank, Andhra bank, Bank of Baroda, Bank of India, Bhartiya Mahila bank, Canara bank, Central Bank of India, Corporation bank, Dena bank, IDBI bank, Indian bank, Indian Overseas bank, Oriental Bank of Commerce, Punjab National bank, Punjab & Sind bank, Syndicate bank, UCO bank, Union bank of India, United bank of India, Vijaya bank Private Banks: Private Banks are the banks which are owned and run by individuals Private banks are split into two groups by financial regulators in India they are Old Private sector banks: The banks which were not nationalized at the time of bank nationalization that took place during 1969 and 1980 are known as old private sector banks. New Private Sector Banks: Banks which came in operation after 1991, with the introduction of economic and financial sectors reforms are called ―new private-sector banks‖ These banks were formed as per RBI guidelines 1993 These banks should have a minimum net worth of Rs.200 Crores The promoters holding should be a minimum of 25% of the paid-up capital Within 3 years of the starting of the operations, the bank should offer shares to public and their net worth must increased to 300 Crores. New private-sector banks in India are Axis Bank, Bank of Punjab, Centurian Bank, Development Credit Bank, SBI Bank, ICICI Bank, IndusInd Bank, Kotak Mahindra Bank, Yes Bank, Times Bank (Merged with HDFC Bank Ltd.), Global Trust Bank (Merged with Oriental Bank of Commerce), Balaji Corporation Bank Limited Foreign Banks: Banks which are foreign originated are called foreign banks Regional Rural Banks (RRB’S) Regional rural banks were established on 26th September, 1975 RRB‘S comes under scheduled commercial banks Main aim of RRBs is financial resources for rural/semi-urban areas and providing loans to small and marginal farmers, agricultural labourers and rural artisans. RRB works under supervision of NABARD (National Bank for Agricultural and Rural Development) Functions of RRBs: Providing banking facilities to rural and semi-urban areas Carrying out government operations like disbursement of wages of MGNREGA workers, distribution of pensions etc. Providing Para-Banking facilities like locker facilities and credit cards Share Capital in RRB’s: Central Government: 50% Sponsored bank: 35% State government: 15% Co-operative Banks: The main purpose of co-operative banks is to co-operate small scale industries, and to provide small loans Industrial Banks: The main purpose of Industrial banks is provide big loans to large scale industries, Some of the Industrial banks are IDBI bank, Industrial bank of India etc. STRUCTURE OF BANKS IN INDIA NABARD Head Quarters: Mumbai Established on: 12 July, 1982 Chairman: Dr. Harsh kumar Bhanwala NABARD completed its 25 years on 12 July, 2007 NABARD is active in developing Financial Inclusion It is India‘s specialized bank developed by Shivaramans committee to provide credit in rural areas. It replaced the Agricultural Credit Department (ACD) and Rural Planning and Credit Cell (RPCC) of Reserve bank of India, and Agricultural Refinance and Development Corporation (ARDC). NABARD undertakes the monitoring and evolution of projects will be refinanced by it It provides training for the institutions working for the rural development. NABARD keeps a check on client institutions It regulates the cooperative banks and RRB‘s It takes measures for improving credit delivery system, monitoring, schemes credit institutions, and training of personnel Helps the state governments in reaching their targets of providing assistance to eligible institutions in agriculture and rural development SOME FACTS ABOUT BANKING IN INDIA First bank established in India: Bank of Hindustan in 1770 Second bank: General Bank of India, 1786 Oldest bank in India originated in the Bank of Calcutta in June 1806 which was still in existence – State Bank of India State Bank of India merged with three banks namely Bank of Bengal, Bank of Bombay and Bank of Madras in 1921 to form the Imperial bank of India which was converted as State Bank of India First Indian bank got ISO: Canara Bank First India bank started solely with Indian capital investment is PNB (Punjab National Bank) Founder of Punjab National Bank is Lala Lajpat Rai Reserve bank of India (RBI) was instituted in 1935 First governor of RBI: Mr.Osborne Smith First Indian Governor of RBI: Mr. C D Deshmukh First bank to introduce savings account in India: Presidency Bank in 1833 First bank to introduce cheque system in India: Bengal Bank in 1833 First bank to introduce internet banking: ICICI bank First bank to introduce mutual fund: State Bank of India First bank to introduce credit card in India: Central Bank of India Which cards are known as plastic money – Credit Cards. Open market operations are carried out by – RBI Capital market regulator is – SEBI Largest Commercial bank in India – State Bank of India The International Bank for Reconstruction and Development (IBRD) is known as – World Bank India‘s First Financial Archive has been set up at – Kolkata CRR, SLR, Repo Rate, Reverse Repo rate are decide by RBI Savings banks interest rates, fixed deposit interest rates, Loan Rates etc. are decided by individual banks The bank which has launched Mobile Bank Accounts in association with Vodafone‘s m –paisa – HDFC Bank Minimum money transfer limit through RTGS: 2 Lakhs Maximum money transfer limit through RTGS: No Limit Minimum & Maximum money transfer limit through NEFT: No Limit NABARD was established in – July, 1982 Largest Public sector bank in India – SBI Largest Private sector bank in India – ICICI Bank Largest Foreign bank in India – Standard Chartered Bank First Indian bank to open branch outside India i.e. London in 1946: Bank of India First RRB named Prathama Grameen Bank was started by: Syndicate Bank First Bank to introduce ATM in India: HSBC in1987, Mumbai Bank of Baroda has the maximum number of overseas branches SBI holds the second position with maximum number of overseas branches Premium credit cards exclusively for women launched recently by – HDFC bank Private Sector Bank that recently launched a product of Personal loan called ―SWIFT‖ – HDFC The bank which approved loan of $500mn to help India improve Rail services – Asian Development Bank FDI limit for new banks – 49% FDI limit for private banks: 74% JUNE, JULY, AUGUST BANKING NEWS JUNE ICICI bank launches co-branded card with Delhi metro SBI, HDFC Bank, PNB and others to secure ATMs by live CCTV monitoring From talking ATMs to magnifying glasses at branches for physically and visually challenged customers ICICI bank launches ‗iMobile‘ app for Windows phone Shareholders approved the re-appointment of Rana Kapoor as managing director and CEO 18 PSU banks failed to meet FY‘14 target of setting ATMs IDFC Bank which recently bagged a commercial banking license, plans to start bank operations by October next year Kotak Mahindra bank set up ATMs at Mumbai Metro Stations ICICI Bank overtakes HDFC Bank as top private bank employer Syndicate Bank, Bol, BoB, others give Rs 1,157 crores for Narendra Modi‘s dream financial hub project in Gujarat K Venkataraman re-appointed as MD & CEO of Karur Vysya Bank IndusInd Bank launches Video Branch Service for Customers July Rajiv Lall to be IDFC Bank Managing Director and CEO Maharashtra cabinet approves Rs 231 Crore to strengthen small banks RBI cancels licenses of Six Delhi-based NBFCs (Non-Banking Financial Companies (NBFCs) Exim bank wants RBI to hike its leverage