International Research Journal of Engineering and Technology (IRJET) e-ISSN: 2395 -0056 Volume: 02 Issue: 01 | Apr-2015 www.irjet.net p-ISSN: 2395-0072 INDIAN BANKING SECTOR AT A GLANCE Prof. Minakshi Dattatraya Bhosale Prof. Minakshi Dattatraya Bhosale HOD, Faculty of MCA, Yashoda Technical Campus Satara, Maharashtra, India ---------------------------------------------------------------------***--------------------------------------------------------------------- Abstract - Banking Industry is a piece of the economy in The banking sector did not get an exemption to this rule the world. Today we are placed in the time of [2].The challenges before the banks would primarily lie in globalization around the world. Worldwide saving themselves from the growing threat of money acquaintances have acknowledged globalization as laundering [3]. their first vital decision. Improvement in technology has encouraged globalization also. E-commerce, e- 1.2 BANKING STRUCTURE IN INDIA marketing, e-banking are today’s buzzwords. Banks Banks which are integrated in the second phase of the RBI have transformed them and are offering services are called schedule banks. These banks comprise into two through the Internet. Remarkably overriding element banks, which are termed as Scheduled Commercial Banks in the Indian economy and the financial sector was and Scheduled Co-operative Banks. These banks are assumed by overseeing an accounting industry. The eligible for certain amenities such as financial Indian financial sector underwent a sweeping change accommodations from Reserve Bank of India and have during the nineties. From the moderately closed and obligations to fulfill certain statutory obligations regulated environment in which agents had to operate [4].Thirteen types of banks available in India are described earlier, the sector was launched up as part of the below. efficiency; enhancing structural policies bring about high sustainable long-term growth of the economy. The 1.2.1 Central banks are typically in command of banking sector in India has come upon a speedy economic policy through dynamic obligations and may be transformation. The actual primary purpose behind the bank of last resort to the banking sector in the event of this change is the result of the enhanced security and a financial crisis. They are most often accused of encryption routines created on the Internet. The second controlling the cash supply, including printing paper cash. reason is banks would be unwilling to lose a potential National banks in most created countries are market share to banks that are willing to offer their institutionally intended to be free from political services on the Internet. As banks rely increasingly on interference [5]. information technology and the Internet to carry on 1.2.2 Investment banks give a guarantee of stock and their business and interact with the market, technology bond issues and guidance on mergers. An investment bank risks will potentially increase, both for individual banks is a budgetary institution, which aids community, and the financial industry at large. Continuous enterprises, and governments in raising financial capital. technology advances and innovations are having significant impact on the way banks interact with their 1.2.3 Merchant bank is a universal type of bank useful for customers, suppliers and counterparts. This research trade financing. Besides, at this moment they are called paper focused on growth of Indian banking Industry. It banks, which give trusts to firms as shares instead of mainly focused on Private and Public banks in India. loans. As opposed to venture capital firms, they are not imprecise to put resources into new organizations. Key Words: Indian banking, Satara district, Private bank, Public bank. 1.2.4 Savings banks and loan associations, are called thrift organizations, are the second biggest assembly of 1.1 INTRODUCTION depository institutions. They were traditionally settled as a group based organizations that offer an opportunity fund In India, the significance of the business of saving money to give contracts to individuals to purchase homes and still has been made accessible in the Banking Regulation Act, accommodate for the most part of the investment funds (BR Act), 1949. As stated in Section 5_ (c) of the BR Act 'a and provide loans for the needy people. banking company is a corporation which transacts the business of banking in India.’ Further, Section 5_ (b) of the 1.2.5 Offshore banks are a bank located outside the BR Act defines banking as, 'accepting, with the end goal of nation of living arrangement of the investor, commonly in giving or venture, of accepting from the public, repayable a low tax jurisdiction that gives financial and legal with interest or generally, and withdrawal, with check, favorable circumstances, including more excellent draft, order or otherwise'[1]. protection law or no taxation, simple access of stores and security against neighborhood [3]. © 2015, IRJET.NET- All Rights Reserved Page 212 International Research Journal of Engineering and Technology (IRJET) e-ISSN: 2395 -0056 Volume: 02 Issue: 01 | Apr-2015 www.irjet.net p-ISSN: 2395-0072 1.2.6 Commercial banks primarily lend to businesses operative banks are giving finance to the farm business, (corporate banking). It is a type of bank that gives retail exchange, little industry items and a few administrations. For example, tolerating stores from the representatives of those have to be doing their business in client; give business advances, and offering fundamental urban, semi-urban and rural areas of India. The co- financing items. operative banking sector has been generated in the nation for the supplement of the village money lender. 4 1.2.7 Retail banks, principally provide loan to the people. Retail Bank refers to the division of a bank those 1.2.13 Development banks are created in order to lend provisions uncomplicatedly with retail clients otherwise, finance on a subsidized interest rate. Such lending is called consumer banking or personal banking. Investment sanctioned to develop important sectors like agriculture, service such as wealth management, brokerage accounts, industry, import-export, housing and allied activities [8]. private banking and retirement planning is an integral part of retail banks. 1.3 PHASES IN THE BANKING EVOLUTION 1.2.8 Universal bank is the bank which gives a shifted The banking industry is originated from 4000 years ago in assortment of monetary administrations for business and place such as Babylon, Mesopotamia and Egypt, where investment services to both. Separated from reserve funds grain and other valuable commodities were stored and and advances, the universal banks provide different receipts gave as proof of sale on purchases. In 1600’s, services. For example, put resources into securities, credit bank using cheques as a medium of exchange and mid- cards, project finance, remittances, payment systems, 1900’s, the bank started the use of telegraph technology to project counseling, merchant banking, operations, transfer money from one location to another. Table 1.3.1 insurance. And many other such services for creditors, depicts stages, performs during banking evolutions & Citigroup, an expansive American bank, are included in major changes in the banking sector during these phases. business and retail lending. It claims a merchant bank (Citicorp Merchant Bank Limited) an investment bank Table 1.3.1 Bank evolutionary stages (Salomon Smith Barney); it works a private bank Sr. Major changes during that (Citigroup Private Bank); finally, its subsidiaries in tax- Stages havens offer offshore banking services to customers in No period other countries. Thus, the commercial banking system in Emerge of joint stock banking India is subdivided into distinctive banking sectors. companies Pre Introduction of deposit banking 1.2.9 Public Sector banks majority stake is the 1 nationalizati and bank branches responsibility of the government of India. It plays an on phase The foundation of modern banking imperative role in the Indian banking industry. According system was laid by Presidency to Reserve Bank of India (RBI) report entitled “A Profile of banks and other joint stock banks. banks 2012-13 “There are 26 public sector banks in India, State bank of India formed out of having total 75,779 offices with 801659 employees Era of imperial bank working all over India in different public sector bank[6]. nationalizati 20 SCBs were nationalized in two 2 on and phases 1.2.10 Private Sector banks the majority of the stake or consolidation Credit Programs were stimulated equity is owned by private shareholders and not by Social banking was Introduced government. As in the year 2012-13 there are total 20 This phase witnessed major private sector banks in which 13 banks are old private Introduction changes in prudential regulations. sector banks and 7 are new private sector banks, total of financial & 16001 offices are all over India. Total 269941 employees banking Interest rates were deregulated. are working all over India [4]. 3 sector reforms and Statutory pre-emption of resources 1.2.11 Foreign bank was registered in a foreign country, partial eased more private sector players but operates in India. The bank would be legally obliged to liberalization to come and strengthen the system follow overseas where it is registered and obliged to as a whole follow Indian banks rules and regulations. There are FDI ceiling for the banking sector aggregate 43 public sector banks in India, total