Impact of Globalisation on The Indian Banking Sector
A bank is a financial institution whichengages in the business of keeping moneyfor savings and checking accounts or forexchange or for issuing loans and credit etc.(http://wordnet.princeton.edu/perl/webwn,
retrieved Jan 20, 2009). The banking section
is vital to any nation’s economy. It is of
prime importance as it has a multiplier effecton the economy. It also leverages on thefunds by issuing credit creation. Thebanking institution in India can be broadlydivided into Scheduled and Non-ScheduledBanks. (For the hierarchical display of thebanking structure, refer Exhibit 1.1)
THE PAST TREND OF THE INDIANBANKING INDUSTRY
For the past three decades, the Indianbanking sector has had many credits underits sleeve. One of them is its extensive reach.Not confining itself to only themetropolitans, it has shown a reach to eventhe remote areas of the country.The first conservative bank was set up in1786. The banking system has beendifferentiated under various categories witheach section comprising of branches. Theentire history of the banking industry can beclassified under three phases.
extends from the earlier time periodtill 1969.
covers the period fromthe nationalization of the banks till beforethe implication of economic reforms. The
covers the period from after theimplication till present date.(for dataregarding the number of banks under variouscategories on a scale from 1985 to 2005,refer Exhibit 1.2).The banking sector before the economicreforms assumed a very traditional methodof working. Phase III paved way for theadvent of globalization, thereby changingthe Indian banking scene.
A bank is a financial institution which engagesin the business of keepingmoney for savings and checking accounts or for exchange or for issuingloans and credit.