Professional Documents
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WHAT IS BANK?
A banker or bank is a financial institution
whose primary activity is to act as a payment agent for customers and to borrow and lend money. An institution where one can place and borrow money and take care of financial affairs; A branch office of such an institution. The first modern bank was founded in Italy in Genoa in 1406, its name was (Bank of St. George).
FUNCTIONS OF BANKS
ACTING AS A TRUSTEES
Banks also act as trustees for various purposes. For example, whenever a company wishes to issue secured DEBENTURES, it has to appoint a financial intermediary as trustee who takes charge of the security for the debenture and looks after the interests of the debenture holders. Such entity necessarily have to have expertise in financial matters and also be of sufficient standing in the market/society to generate confidence in the minds of potential subscribers to the debenture. While Banks are the natural choice for the customers, Banks must possess the following to be effective and retain that: A track record of sufficient length. Facilities for safe keeping. Legal skills to take necessary steps for the trusteeship.
DEBENTURES
It is define as certicate of agreements of loans which is given under the companies stemps and ensure fixed returns on the basis of interest rate and the principal amount whenever debenture mature.
TYPES OF DEBENTURES1.NCD 2.PCD 3.OCD 4.FCD
TYPES OF BANKS
Public sector Banks
Private sector Banks Co-operative Banks Development Bank/Financial institutions
CO-OPERATIVE BANKS
The Co operative banks in India started functioning almost 100 years ago. The Cooperative bank is an important constituent of the Indian Financial System.They are setup to provide easy loans to farmers or other persons to set up his buisness. They are non profitable banks. Cooperative banks in India finance rural areas under: Farming Cattle Milk Hatchery Personal finance Some example of co-operative banks in IndiaIDBI BANK(INDUSTRIAL DEVELOPMENT BANK OF INDIA) IFCI BANK(INDUSTRIAL FINANCE COOPERATION OF INDIA) APEX BANK
Regulate the issue of banknote. Maintain reserves with a view to securing monetary
stability. To operate the credit and currency system of the country to its advantage.
Functions of RBI
The fuctions are classified into three heads:-
Supervisory functions
Traditional functions
Monopoly of currency notes issue Banker to the Government (both the central
and state) Fight against economic crisis and ensures stability of Indian economy. Controller of ForEx and credit Maintaining the external value of domestic currency
Promotional functions
Extension of the facilities for the small
scale industries Innovating the new banking business transactions. Extension of the facilities for the provision of the agricultural credit through NABARD
Supervisory functions
Granting licence to Banks. Periodical review of the work of the
commercial banks. Control the non-banking finance corporation.
Phase-1
GENERAL BANK OF INDIA 1786(FIRST BANK)
Phase-2
Nationalization of imperial bank of India and
formation of sate bank of India(1955)
Nationalization of SBI and Subsidiaries(1960) Insurance cover extended to deposits Creation of credit guarantee corporation Creation of regional rural banks
Phase-3
Entry of Foreign Banks Phone Banking and Net-Banking
Continued
Inefficient capital allocation Competition in market
Post office Insurance Financial Institution Foreign Banks
Ways Ahead
Technological Advancement Rural Banking
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