1. INDUSTRY PROFILE
1.1 ORIGIN OF BANKING
Banks have a longhistory, and have influenced economies and politics for centuries.Traditionally, a bank generates profits from transaction fees on financial services andfrom the interest it charges for lending. In recent history, with historically low interestrates limiting banks' ability to earn money by lending deposited funds, much of a bank'sincome is provided byoverdraftfees and riskier investments.The name bank derives from the Italian word banco – desk, used during the Renaissance by Florentines bankers, who used to make their transactions above a desk covered by agreen tablecloth. A
is a business which provides financial services for profit.Traditional
include receiving deposits of money, lending money and processing transactions.There are two dominant forms of banking, central and commercial. Commercial banks, of which we have records dating from the 13th century, were originally agents to exchangeand validate coins and bullion. Banks began taking deposits because their customers,international traders, held assets in many ports along their trade routes. These early banks could also pay clients of their customers through signed chits: medieval checks.Eventually, the convenience of checking systems drew customers to use checks to cover increasingly large expenses, and this extensive checking eventually became borrowing.Bankers would allow customers to overdraw checks to a certain point, which would then be repaid, with interest. Thus they hold our money for us, they lend us money, and theycreate money in the form of credit.
INTRODUCTION TO THE BANKING SECTOR IN INDIA
In India the banks are being segregated in different groups. Each group has their own benefits and limitations in operating in India. Each has their own dedicated target market.1