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Article :
Indian Economics At A Glance
CURRENT BANKING RATE (AS ON 16TH JUNE , 2008 )
BANK RATE - 6.00 %
REPO RATE - 8.00 %
REVERSE REPO RATE - 6.00 %
CRR - 8.25 %
SLR - 25.00 %
PLR - 12.75 % - 13.25 %
SAVING BANK RATE - 3.5 %
DEPOSIT RATE - 7.50 % - 9.60 %
BANKING
 
SYSTEM :
1.Money market It refers to borrowing and lending. 2 parts organized and unorganized sector– Organized sector are State Bank, 7 associated banks, 19 Nationalised banks, RRB,Co-operative Banks, Non Governmental sector and other Banks. Unorganized includes themoneylenders and indigenous bankers. 2.Development of Indian Banking: Bank of Hindusthan1779 was first bank at Calcuttaunder European management-Bank of Bengal 1806 , Bank ofBombay 1840, bank of Madras 1843, were called Presidency banks. 1881- First Bank with
 
limited liability to be managed by Indian Board namely the Oudh Commercial bank- 1894- Firstpurely Indian bank was Punjab National bank- Later Imperial bank 1921 by amalgamating thePresidency banks. RBI created in 1935- nationalized in 1949 – Imperial Bank, renamed as SBIin 1955- 14 Banks (50 crores) nationalized6-96 Banks (2 00crores) nationalized 1980 – N.B.I.merged with P.N.B. in 1993. 3.R.B.I: It has Governor and Board of Directors apart from CentralBoard 4 local boards. It has following functions: -
Functions Of Banks :
1.Issue of Notes: followed Minimum Reserve System(MRS) – 200 Crore(115Croregold+85Crore foreign exchange etc.)2.Banker , Agent and Adviser to the Govt3.Banker’s Bank : Banking Regulation Act 1949 - Lender to the last resort.(loan toCommerlised Bank)4.Controller of Credit & money supply(i)Quantitative: Bank Rate, open Market operation, statutory Liquidity Ratio (SLR), CashReserve Ratio (CRR(ii)Qualitative (or) Selective: since 19561)Rationing of Credit2)Regulation of Consumer credit3)Variation in margin requirements.4)Fixation of maximum limit of Credit given for a Special purpose.5)Discriminatory interest rates on some special types of advances5.Custodian of Foreign Reserves: RBI buys & sells the foreign currencies6.Collecting and publishing the economic data.7. Buying and selling of Govt. securities and trade bills8.Representing the Govt in IMF.9.Giving loans to the Govt to buying and selling of valuable commodities etc.4.Techniques in credit control:(a) Quantitative and Qualitative Credit Control – Bank rate - SLR, CRR, open markeroperations etc., and variation in margin requirements publicity etc.,(b)Qualitative or Selective Credit Control 1956 – 3 points -fixing margin requirements-
 
maximum limit of credit and different interest rates.5.Priority sectors:(a) Houses for slum, credit to formers for purchase, ordinary retailers etc., shall be givenpriority at least 40% to them(b) Differential rate of interest – less interest 4% rate for weaker sections. It is for thosewhose income not more than per annum 6400/7200 in Rural and Urban areas- for lands lessthan – 2.5-acres/1 acre non irrigated and irrigated land respectively. (c) New strategy forrural lending – 1987 service area approach.
List Of Nationalised Banks In India :
Allahabad Bank
Andhra Bank
Bank of Baroda
Bank of India
Bank of Maharashtra
Canara Bank
Central Bank of India
Corporation Bank
Dena Bank
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