Professional Documents
Culture Documents
UNIVERSITY OF MUMBAI
PROJECT ON
BANKING STRUCTURE
SUBMITTED BY
KETAN PRAKASH GHATKAR
PROJECT GUIDE
PROF. PRAVIN AKOLKAR
BACHELOR OF
BANKING AND INSURANCE
SEMESTER V
(2016-2017)
Banking Structure
Banking Structure
CERTIFICATE
PRAVIN AKOLKAR.
____________
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DECLARATION
___________
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ACKNOWLEDGEMENT
I would firstly like to thank my institution and sincere thanks to principal for
providing me support and giving me opportunity for doing Banking and
Insurance course and completing this Project.
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EXECUTIVE SUMMARY
Banking in india, in the mode sense, originated in the last decades of the 18th
century among the first banks where the Bank of Hindustan, which was
established in 1770 and liquidated in 1829-32; and the Genral Bank of
india,established in 1786 but failed in 1791.
The largest bank, and the oldest still in existence, is the state bank of india is
oriented as a bank of Calcutta in june 1806. It was renamed as the bank of
Bengal. This ws one of the three banks funded by a presidency government
,the other to ware the bank of Bombay and the bank of 1921 to form the
imperial bank of india , which upon Indian independence, become state bank of
india in 1995.
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INTRODUCTION
India has a well developed Banking system. The banking industry originated in
India in the 18th century and since then it has undergone significant number of
changes. The commercial banking industry in India over the past few decades
has been revolutionized by a number of factors such as independence,
nationalization, deregulation, rise of the Internet, etc. The commercial banking
structure in India consists of Scheduled Banks and Unscheduled Banks.
In the past the banks did not find any attraction in the Indian economy because
of the low level of economic activities and little business prospects. Today we
find positive changes in the National business development policy. Earlier, the
money lenders had a strong hold over the rural population which resulted in
exploitation of small and marginal savers. The private sector banks failed in
serving the society. This resulted in the nationalization of 14 commercial
bankands in 1969. Nationalization of commercial banks paved ways for the
development of Indian economy and channelized financial resources for the up
liftment of weaker sections of the society. The passage of financial
modernization legislation by Congress in 1999 removed barriers, allowing
banks to expand product offerings, while the potential of the Internet as a sales,
marketing and delivery tool, widened the avenues to sell and deliver these
products. The main products of the commercial banking industry-insurance,
securities, mortgages, mutual funds and consumer credit-have all benefited from
these changes. This report will examine the extent to which increased product
sales have influenced overall bank assets and how commercial banks' increased
market share in each of these products areas over the next five years will raise
overall bank income and assets.
Currently (2011), banking industry in India is generally fairly mature in terms
of supply, product range and reach-even though reaches in rural India still
remains a challenge for the private sector and foreign banks. In terms of quality
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of assets and capital adequacy, Indian banks are considered to have clean, strong
and transparent balance sheets relative to other banks in comparable economies
in its region. The Reserve Bank of India is an autonomous body, with minimal
pressure from the government. The stated policy of the Bank on the Indian
Rupee is to manage volatility but without any fixed exchange rate-and this has
mostly been true.
With the growth in the Indian economy expected to be strong for quite some
time-especially in its services sector-the demand for banking services,
especially retail banking, mortgages and investment services are expected to be
strong. One may also expect mergers and acquisitions, takeovers, and asset
sales.
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REVIEW OF LITERATURE
Indian banking system, over the years has gone through various phases after
establishment of Reserve Bank of India in 1935 during the British rule, to
function as Central Bank of the country. Earlier to creation of RBI, the central
bank functions were being looked after by the Imperial Bank of India. With the
5-year plan having acquired an important place after the independence, the
Govt. felt that the private banks may not extend the kind of cooperation in
providing credit support, the economy may need. In 1954 the All India Rural
Credit Survey Committee submitted its report recommending creation of a
strong, integrated, State-sponsored, State-partnered commercial banking
institution with an effective machinery of branches spread all over the country.
The recommendations of this committee led to establishment of first Public
Sector Bank in the name of State Bank of India on July 01, 1955 by acquiring
the substantial part of share capital by RBI, of the then Imperial Bank of India.
Similarly during 1956-59 the associate banks came into the fold of public sector
banking.
Another evaluation of the banking in India was undertaken during 1966 as the
private banks were still not extending the required support in the form of credit
disbursal, more particularly to the unorganised sector. Each leading industrial
house in the country at that time was closely associated with the promotion and
control of one or more banking companies. The bulk of the deposits collected,
were being deployed in organised sectors of industry and trade, while the
farmers, small entrepreneurs, transporters , professionals and self-employed had
to depend on money lenders who used to exploit them by charging higher
interest rates. In February 1966, a Scheme of Social Control was set-up whose
main function was to periodically assess the demand for bank credit from
various sectors of the economy to determine the priorities for grant of loans and
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1969,
RBI
introduced
the
Lead
Bank
Scheme
on
the
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RESEARCH METHODOLOGY
Secondary data is the data which is collected for some other purpose.
The data used for preparing the project report was secondary data. It was
collected from various websites, newspapers and books.
Research follows a specific plan of procedure.
Research requires a clear articulation of a goal.
Research is guided by the specific research problem & question.
SCOPE OF STUDY
The project entitled BANKING STRUCTURE. The study will focus on
how banking structure is implemented in India, its impact , changes,
concerns with a various parts .
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A]
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These are as follows Issuing letter of credit, traveller cheques, circular notes etc.
Undertaking safe custody of valuables, important documents and
securities by providing safe deposit locker
Providing customers with facilities of foreign exchange.
Transferring money from one place to another; and from one branch to
another branch of the bank.
Standing guarantee on behalf of its customers, for making payments for
purchase of goods, machinery, vehicles etc
Collecting and supplying business information;
Providing reports on the credit worthiness of customers.
List of Commercial Banks in India
State Bank of India
State Bank of Bikaner &Jaipur
State Bank of Hyderabad
State Bank of Indore
State Bank of Mysore
State Bank of Patiala
I]
Nationalised banks in India are the major players in Indian banking system
dominating the industry. Not only that, the nationalised banks in India also play
pivotal role in the economic development of the country at the same time.
The history of nationalization of Indian banks dates back to the year 1955 when
the Imperial Bank of India was nationalized and re-christened as State Bank of
India (under the SBI Act, 1955). Later on July 19, 1960, the 7 subsidiaries of
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SBI viz. State Bank of Hyderabad (SBH), State Bank of Indore, State Bank of
Saurashtra (SBS), State Bank of Mysore (SBM), State Bank of Bikaner and
Jaipur (SBBJ), State Bank of Patiala (SBP) and State Bank of Travancore (SBT)
were also nationalized with deposits more than 200 crores.
Nationalised Banks:
Allahabad Bank
Andhra Bank
Bank of Baroda
Bank of India
Bank of Maharashtra
Canara Bank
Central Bank of India
Corporation Bank
Dena Bank
IDBI Bank Ltd.
Indian Bank
Punjab & Sind Bank
Punjab National Bank
Syndicate Bank
Union Bank of India
United Bank of India
II]
Private banking in India was practiced since the beginning of banking system in
India. The first Private bank in India to be set up in Private Sector Banks in
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India was Induslnd Bank. It is one of the fastest growing Private Sector Banks
in India. IDBI ranks the tength largest Development bank in the world as
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Private Banks in India and has promoted a world class institutions in India. The
first Private Bank in India to receive an in principle approval from the Reserve
Bank of India was Housing Development Finance Corporation Limited, to set
up a bank in the private sector banks in India as part of the RBI's liberalisation
of the Indian Banking Industry. It was incorporated in August 1994 as HDFC
Bank Limited with registered office in Mumbai and commenced operations as
Scheduled Commercial Bank in January 1995. ING Vysya, yet another Private
Bank of India was incorporated in the year 1930. Bangalore has a pride of place
for having the first branch inception in the year 1934. With successive years of
patronage and constantly setting new standards in banking, ING Vysya Bank
has many credits to its account.
Banking Structure
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III]
Rural banking in India started since the establishment of banking sector in India.
Rural Banks in those days mainly focussed upon the agro sector. Regional rural
banks in India penetrated every corner of the country and extended a helping
hand in the growth process of the country. SBI has 30 Regional Rural Banks in
India known as RRBs. The rural banks of SBI is spread in 13 states extending
from Kashmir to Karnataka and Himachal Pradesh to North East. The total
number of SBIs Regional Rural Banks in India branches is 2349 (16%). Till date
in rural banking in India, there are 14,475 rural banks in the country of which
2126 (91%) are located in remote rural areas
Regional Rural Banks in India are an integral part of the rural credit structure of
the country. Since the very beginning, when the Regional Rural Banks in India
(RRBs) were established in October 2, 1975, these banks played a pivotal role in
the economic development of the rural India. The main goal of establishing
regional rural banks in India was to provide credit to the rural people who are not
economically strong enough, especially the small and marginal farmers, artisans,
agricultural labours, and even small entrepreneurs. Apart from SBI, there are
many other banks which function for the development of the rural areas in India.
These banks are listed below:
Chhattisgarh Gramin Bank
Madhya Bihar Gramin Bank
Dena Gujarat Gramin Bank
Baroda Gujarat Gramin Bank
Harayana Gramin Bank
Gurgaon Gramin Bank
Assam Gramin Vikash Bank
Jharkhand Gramin Bank
Madhya Bharath Gramin Bank
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B]
The Cooperative banks in India started functioning almost 100 years ago. The
Cooperative bank is an important constituent of the Indian Financial System,
judging by the role assigned to co operative, the expectations the co operative is
supposed to fulfil, their number, and the number of offices the cooperative bank
operate. Though the co operative movement originated in the West, but the
importance of such banks have assumed in India is rarely paralleled anywhere
else in the world. The cooperative banks in India play an important role even
today in rural financing. The businesses of cooperative bank in the urban areas
also have increased phenomenally in recent years due to the sharp increase in
the number of primary co-operative banks. Co operative Banks in India are
registered under the Co-operative Societies Act. The cooperative bank is also
regulated by the RBI. They are governed by the Banking Regulations Act 1949
and Banking Laws (Co-operative Societies) Act, 1965.
Features of Cooperative Banks
Co-operative Banks are organised and managed on the principal of cooperation, self-help, and mutual help. They function with the rule of "one
member, one vote". function on "no profit, no loss" basis. Co- operative banks,
as a principle, do not pursue the goal of profit maximisation.
Co-operative bank performs all the main banking functions of deposit
mobilisation, supply of credit and provision of remittance facilities.
Co-operative Banks provide limited banking products and are functionally
specialists in agriculture related products. However, co-operative banks now
provide housing loans also. UCBs provide working capital loans and term loan
as well. The State Co-operative Banks (SCBs), Central Co-operative Banks
(CCBs) and Urban Co-operative Banks (UCBs) can normally extend housing
loans upto Rs 1 lakh to an individual. The scheduled UCBs, however, can lend
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upto Rs 3 lakh for housing purposes. The UCBs can provide advances against
shares and debentures also. Co-operative bank do banking business mainly in
the agriculture and rural sector. However, UCBs, SCBs, and CCBs operate in
semi urban, urban, and metropolitan areas also. The urban and non-agricultural
business of these banks has grown over the years. The co-operative banks
demonstrate a shift from rural to urban, while the commercial banks, from urban
to rural. Co-operative banks are perhaps the first government sponsored,
government-supported, and government-subsidised financial agency in India.
They get financial and other help from the Reserve Bank of India NABARD,
central government and state governments. They constitute the "most favoured"
banking sector with risk of nationalisation. For commercial banks, the Reserve
Bank of India is lender of last resort, but co-operative banks it is the lender of
first resort which provides financial resources in the form of contribution to the
initial capital (through state government), working capital, refinance. Cooperative Banks belong to the money market as well as to the capital market.
Primary agricultural credit societies provide short term and medium term loans.
Land Development Banks (LDBs) provide long-term loans. SCBs and CCBs
also provide both short term and term loans. Co-operative banks are financial
intermediaries only partially. The sources of their funds (resources) are
central and state government,
the Reserve Bank of India and NABARD,
other co-operative institutions,
ownership funds and,
deposits or debenture issues.
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NAFSCOB
The National Federation of State Cooperative Banks Ltd. (NAFSCOB), was
established on 19th May 1964 with a view to facilitate the operations of State
and Central Cooperative Banks in general and Development of Cooperative
Credit in particular.
The objectives of NAFSCOB are:
To provide a common forum to the member banks to examine the
problems of cooperative credit, banking and allied matters and evolve
suitable strategies to deal with them.
Promote and protect the interests of the member banks in all spheres of
their activities and to give expression to the views of the member banks.
Co-ordinate and liaison with Government of India , Reserve Bank of
India respective State Governments, NABARD and other higher
financing institutions for the development of cooperative credit on behalf
of the member banks.
Provide research and consultancy inputs to the member banks in order to
facilitate them to strengthen their own organizations.
Organise conferences/seminars/workshops/meeting to share the views of
common interest with a view to contribute for better policy decisions.
The Federation functions with three of its wings, viz.
Planning, Research and Development (PRD)
All India Mutual Arrangement Scheme (AIMAS) and
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I]
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i.
State Co-operative Banks are the apex of the three-tier Co-operative structure
dispensing mainly short/medium term credit. It is the principal society in a State
which is registered or deemed to be registered under the Government Societies
Act, 1912, or any other law for the time being in force in India relating to cooperative societies and the primary object of which is the financing of the other
societies in the State which are registered or deemed to be registered. The State
Co-operative Banks receive current and fixed deposits from its constituent
banks as well as savings, current and fixed deposits from the general public and
from local boards, other local authorities, etc. Further, they receive loans from
the RBI and NABARD. NABARD is the supervisory authority for State Cooperative Banks. The state government contributes the certain portion of their
working capital. The principal function of State Co-operative Banks is to assist
the Central Co-operative Banks and to balance excesses and deficiencies in the
resources of Central Co-operative Banks. It also act as the balancing centre
for Central Co-operative Banks in the sense that surplus fund of some of these
banks are made available to other needy banks. It also serves the link between
RBI and the Central Co-operative Banks and Primary Agriculture Credit
Societies. But the connection between the State Co-operative Banks and
Primary Co-operative Societies is not direct. The Central Co-operative Banks
are acting as intermediaries between the State Co-operative Banks and Primary
societies.
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ii.
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The central co-operative banks are located at the district headquarters or some
prominent town of the district. These banks have a few private individuals also
who provide both finance and management. The central co-operative banks
have three sources of funds,
Their own share capital and reserves
Deposits from the public and
Loans from the state co-operative banks
iii.
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i.
State
Co-operative
Agriculture
and
Development
Banks
(SCARBDs):
State Co-operative Agriculture and Development Banks constitute the upper-tier
of long term co-operative credit structure. Though long term credit cooperatives have been allowed to access public deposits under certain conditions,
such deposits constitute a relatively small proportion of their total liabilities.
They are mostly dependent on borrowings for on-lending.
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(a)
Floatation of Debentures,
(b)
Receiving Deposits;
(c)
(d)
(e)
The bank issues long term and medium term loans towards agricultural and
allied activities like construction of godowns, cattle shed, farm house, purchase
of lands etc., and for minor irrigation purposes like construction of new wells,
deepening of existing wells etc., In addition, long term loans are also sanctioned
for animal husbandry, fisheries, plantation, farm mechanization, non-farm sector
and other non-minor irrigation schemes.
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ii.
Primary Co-operative Agriculture and Rural Development Banks are the lowest
layer of long term credit co-operatives. It is primarily dependent on the
borrowings for their lending business.
They provide credit for developmental purposes like minor irrigation,
cultivation of plantation crops and for diversified purposes like poultry, dairying
and sericulture on schematic basis. They get requisite financial assistance from
the Cooperative State Agriculture and Rural Development Bank.
In order to widen their scope of lending to compete with other financial
agencies, the primary cooperative agriculture and rural development banks have
been permitted to finance artisans, craftmen and small scale entrepreneurs. They
have also been permitted to issue loans to small road transport operators in rural
areas for purchase of goods carriers and passenger vehicles. As a result, during
2007-08, the Primary Cooperative Agriculture and Rural Development Banks
have again started lending for the Non-Farm Sector including Jewel Loans.
B]
The term Urban Co-operative Banks (UCBs), though not formally defined,
refers to primary cooperative banks located in urban and semi-urban areas.
These banks, till 1996, were allowed to lend money only for non-agricultural
purposes. This distinction does not hold today. These banks were traditionally
centred around communities, localities work place groups. They essentially lent
to small borrowers and businesses. Today, their scope of operations has widened
considerably.
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The origins of the urban cooperative banking movement in India can be traced
to the close of nineteenth century when, inspired by the success of the
experiments related to the cooperative movement in Britain and the cooperative
credit movement in Germany such societies were set up in India. Cooperative
societies are based on the principles of cooperation, - mutual help, democratic
decision making and open membership. Cooperatives represented a new and
alternative approach to organisation as against proprietary firms, partnership
firms and joint stock companies which represent the dominant form of
commercial organisation.
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Improving health
The tally of financially weak urban banks declined (grade III and IV banks) to
330 in 2009-10 from 392 in 2008-09. Due to the consolidation process in the
sector, the percentage of banks in grades III and IV witnessed a declining trend
during recent years.There was an improvement in the asset quality of the entire
UCB sector in both absolute and percentage terms as at end-March over the
previous year. Gross bad loans declined by Rs 135 crore to Rs 12,727 crore.
However, both gross as well as net non-performing loans of the UCB sector
continued to be on the higher side, RBI said, in its Trends and Progress report
for the banking sector in 2009-10.Along with a decline in non-performing loans,
there was also an increase in the coverage ratio of UCBs as of end-March over
the previous year, indicating improvement in financial soundness. The provision
coverage ratio improved to 62.9 per cent at the end of 2009-10 from 59.9 a year
before.
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C]
AIFIs With the progressive blurring of functions between banks and financial
institutions, the AIFIs are fast losing ground and adopting the business model of
a bank to remain viable in the long run (Table 3.11). The merger of ICICI with
ICICI bank on March 30, 2002 was the beginning of conversion of AIFIs into
universal banks. Taking into account the changing operating environment
following the initiation of economic reforms in the early1990s, the Government
decided to transform IDBI into a commercial bank without eschewing its
traditional development finance obligations. The migration to the new business
model of commercial banking, with its access to low cost, current/saving bank
deposits is expected to enable it to overcome most of the limitations of the
current model of development finance and also to diversify its client/asset base.
I.
NABARD
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manure. Villages covered 100 per cent under solar energy units, would get a
special package from Nabard, he revealed.
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II.
EXIM
III.
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for capacity building and on lending. Recently it has opened seven branches
christened as Micro Finance branches, aimed especially at dispensing loans up
to Rs. 5.00 lakh.
It is an apex body and nodal agency for formulating, coordination and
monitoring the policies and programmed for promotion and development of
small scale industries.
IV.
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more competitive rates to its clients. The new entity would offer various retail
products, leveraging upon its existing relationship with retail investors under its
existing Suvidha Flexi-bond schemes.
The responsibility for maintaining standards of corporate governance lies with
its Board of Directors. Two Committees of the Board viz. the Executive
Committee and the Audit Committee are adequately empowered to monitor
implementation of good corporate governance practices and making necessary
disclosures within the framework of legal provisions and banking conventions.
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Mini-Case Study
HDFC Bank Ltd.: A Leader in Making
HDFC Bank was incorporated in the year of 1994 by Housing Development
Finance Corporation Limited (HDFC), Indias premier housing finance
company. It was among the first companies to receive an in principle approval
from the Reserve Bank of India (RBI) to set up a bank in the private sector. The
Bank commenced its operations as a Scheduled Commercial Bank in January
1995 with the help of RBIs liberalization policies.
In a milestone transaction in the Indian banking industry, Times Bank Limited
(promoted by Bennett, Coleman & Co./Times Group) was merged with HDFC
Bank Ltd., in 2000. This was the first merger of two private banks in India. As
per the scheme of amalgamation approved by the shareholders of both banks
and the Reserve Bank of India, shareholders of Times Bank received 1 share of
HDFC Bank for every 5.75 shares of Times Bank.
In 2008 HDFC Bank acquired Centurian Bank and its total branches became
more than 1,000. The amalgamated bank emerged with a strong deposit base of
around Rs. 1,22,000 crore and net advances of around Rs. 89,000 crore. The
amalgamation added significant value to HDFC Bank in terms of increased
branch network, geographic reach, and customer base, and a bigger pool of
skilled manpower.
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Business Focus
HDFC Bank deals with three key business segments Wholesale Banking
Services, Retail Banking Services and Treasury. It has entered the banking
consortia of over 50 corporate for providing working capital finance, trade
services, corporate finance and merchant banking. It is also providing
sophisticated product structures in areas of foreign exchange and derivatives,
money markets and debt trading and equity research.
Wholesale Banking Services
The Banks target markets are large, blue-chip manufacturing companies, small
& mid-sized companies and agro-based businesses. For these customers, the
Bank provides a wide range of commercial and transactional banking services,
including working capital finance, trade services, transactional services, cash
management, etc. The bank is also a leading provider of structured solutions,
which combine cash management services with vendor and distributor finance
for facilitating superior supply chain management for its corporate customers.
HDFC Bank has made significant inroads into the banking consortia of a
number of leading Indian corporate including multinationals, companies from
the domestic business houses and prime public sector companies. It is
recognized as a leading provider of cash management and transactional banking
solutions to corporate customers, mutual funds, stock exchange members and
banks.
Retail Banking Services
The objective of the Retail Bank is to provide its target market customers a full
range of financial products and banking services, giving the customer a one-stop
window for all his/her banking requirements. The products are backed by
world-class services and delivered to customers through the growing branch
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Distribution Network
HDFC Bank is headquartered in Mumbai. The Bank has a network of 1,725
branches spread in 771 cities across India. All branches are linked on an online
real-time basis. Customers in over 500 locations are also serviced through
Telephone Banking. The Bank has a presence in all major industrial and
commercial centers across the country. Being a clearing/settlement bank to
various leading stock exchanges, the Bank has branches in the centers where the
NSE/BSE has a strong and active member base.
The Bank also has 3,898 networked ATMs across these cities. Moreover, HDFC
Banks ATM network can be accessed by all domestic and international
Visa/MasterCard, Visa Electron/ Maestro, Plus/Cirrus and American Express
Credit/Charge cardholders.
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also largely owned by the central government, account for nearly two-thirds of
commercial bank assets.
The Indian banking system can be characterized by a large number of banks
with mixed ownership. However, 27 public sector banksnamely, banks owned
and controlled by the statecontinue to dominate the Indian commercial
banking landscape. Together, these banks account for three quarters of the
market share. Even though these public sector banks have access to capital
markets, government policy is to ensure that its equity interest does not, as a
result of public issues by banks, go below 51 percent. As is the case with many
developed and developing countries, the efficiency of the state-owned banks has
been a concern for both the Chinese and Indian governments. And the Indian
government also openly admitted that public sector banks have been
consistently outperformed by private sector banks. The effort to restructure the
state-owned banks is still a work in progress in the two countries. Both
governments have continued to launch many new initiatives to further promote
progress in this area.
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The opening up of the Indian banking sector to private players acted as 'the
tipping point' for this transformation. The deregulatory efforts prompted many
financial institutions (like HDFC and ICICI) and non-financial institutions enter
the banking arena. With the entry of private players into retail banking and with
multi-nationals focusing on the individual consumer in a big way, the banking
system underwent a phenomenal change. Multi-channel banking gained
prominence. For the first time consumers got the choice of conducting
transactions either the traditional way (through the bank branch), through
ATMs, the telephone or through the Net. Technology played a key role in
providing this multi-service platform. The entry of private players combined
with new RBI guidelines forced nationalized banks to redefine their core
banking strategy. And technology was central to this change.
Today banks have to look much beyond just providing a multi-channel service
platform for its customers. There are other pressing issues that banks need to
address in order to chalk-out aroadmap for the future. Here are the top three
concerns in the mind of every bank's CEO.
Customer retention:
Customer retention is one of the main priorities for banks today. With the entry
of new players and multiple channels, customers have become more discerning
and less 'loyal' to banks. Given the various options, it is now possible to open a
new account within minutes. Or for that matter shift accounts within a couple of
hours. This makes it imperative that banks provide best levels of service to
ensure customer satisfaction.
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Cost pressures:
Cost pressures come into play when banks are not able to afford the cost of a
certain service or initiative although they want to or need to have it in place.
This is primarily because the cost structure at the backend is not efficient
enough to offer that kind of service to the marketplace.
Increased competition:
The entry of new players into the banking space is leading to increased
competition. A recent example would be of Kotak Mahindra Finance Limited
(KMFL)a financial services company focused on investment consulting, auto
finance, insurance, etc morphing into Kotak Bank. Many other such players
are waiting on the sidelines. Technology makes it easier for any company with
the right channel infrastructure and money reserves to get into banking. This has
been one of the major reasons behind this kind of competition from players who
do not have a banking background. Kotak Bank overcame the initial costs of
setting up its own ATM network by getting into a sharing agreement with UTI
bank. New entrants with strategies such as these make the banking game tough
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mobile banking, proxy banking, plastic money such as credit cards, ATM
cards, debit cards, smart cards, etc.
5. Banks have indulged in activities such as service area approach, mutual
funds, housing finance, factoring services, commercial papers, certificate of
deposit, stock invest and other money and capital market instruments.
6. The unleashing of products and services through the net has galvanized
players at all levels of the banking and financial institutions market grid to
look anew at their existing portfolio offering. Banks have been benefited a
lot with the internet and information technology. As a result banks have
become more efficient and cost-effective. Indian nationalized banks
continue to be the major lenders in the economy due to their sheer size and
penetrative networks which assures them high deposit mobilization.
However there is a need to create more awareness regarding social
development. There is need for taking decisive actions .
7. Industry estimates indicate that out of 274 commercial banks operating in
India, 223 banks are in the public sector & 51 are in the private sector. The
private sector bank grid also includes 24 foreign banks.
8. Indian banking market is growing at an astonishing rate, with assets
expected to reach US$1 trillion by 2010. The Indian banking industry is in
the middle of an IT revolution, focusing on the expansion of retail and rural
banking. Players are becoming increasingly customer-centric in their
approach, which has resulted in innovative methods of offering new banking
products & services. Banks are now realizing the importance of being a big
player & are beginning to focus their attention on mergers & acquisitions to
take advantage of economies of scale.
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Banking Structure
BIBLIOGRAPHY
There was immense need and flow of the information while preparing the
project report which was gathered through various sources mentioned below:
Websites:
www.rbi.org.in
www.business-standard.com
www.finance.indiamart.com
www.thehindubusinessline.com
www.google.com
www.wikipedia.com
www.banknetindia.com
www.bankingindiaupdate.com
Newspapers:
The Economic Times
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