01-09-2012, 10:22 AM
Project report on ING Vysya Bank Ltd
1ING Vysya Bank.doc (Size: 247 KB / Downloads: 43)
Executive Summary
Project has been a great learning experience for me; at the same time it gave me enough scope to implement my analytical ability. This project as a whole can be divided into different parts:
Each part gives an insight about the Banking Sector and its various aspects. It is purely based on whatever I learned at ING Vysya Bank Ltd. One can have a brief knowledge about Banking Industry and all its basics through the project. Other than that the real servings come when one moves ahead.
All the topics have been covered in a very systematic way. The language has been kept simple so that even a layman could understand. All the data’s have been well analyzed well.
Overview
ING is a diversified financial services Group that provides a range of banking and financial services to customers, including
• retail banking,
• project and corporate finance,
• working capital finance,
• insurance,
• venture capital and private equity,
• investment banking,
• broking,
• and treasury products and services.
The company operates in, India, the UK, Canada, Russia and in 60 other countries. It is headquartered in Amsterdam, Netherlands and employs about 1,10,000 people worldwide.
2. BANKING
A bank is a financial institution whose primary activity is to act as a payment agent for customers and to borrow and lend money. Banks are important players in financial markets and offer financial services such as investment funds. In some countries such as GERMANY, banks are the primary owners of industrial corporations. While in other countries such as the UNITED STATES banks are prohibited from owning non-financial companies.
3. HISTORY OF BANKING
The first banks The Bankre probably the religious temples of the ancient world. It was probably established sometime during the third millennium B.C. Banks probably predated the invention of money. There are extant records of loans from the 18th century BC in Babylon that The Bankre made by temple priests or monks to merchants.
INDIAN BANKING INDUSTRY
BANKING IN INDIA
Banking in India originated in the last decades of the 18th century. The first banks The Bankre THE GENERAL BANK OF INDIA, which started in 1786, and BANK OF HINDUSTAN, both of which are now defunct. The oldest bank in existence in India is the STATE BANK OF INDIA, which originated in the BANK OF CALCUTTA in June 1806. The first fully Indian owned bank was the ALLAHABAD BANK, established in 1865.
Until the early 1990s, the Indian financial system was strictly controlled. Interest rates were administered, formal and informal parameters governed asset allocation, and strict controls limited entry into and expansion within the financial sector. The Government’s economic reform program, which began in 1991, encompassed the financial sector. The first phase of the reform process began with the implementation of the recommendations of the Committee on the Financial System, the Narasimham Committee I. The second phase of the reform process began in 1999.
Reserve Bank of India
RBI, established in 1935, is the central regulatory and supervisory authority for the Indian financial system. RBI manages India’s money supply and foreign exchange and also serves as a bank for the Government and for India’s commercial banks.
RBI issues guidelines on various areas including exposure standards, income recognition, asset classification, provisioning for non-performing and restructured assets, investment valuation and capital adequacy standards for commercial banks, long-term lending institutions and non-bank finance companies. RBI requires these institutions to furnish information relating to their businesses to RBI on a regular basis.
Commercial Banks
Commercial banks in India have traditionally focused only on meeting the short-term financial needs of industry, trade and agriculture. Commercial banks can be classified into two categories namely Scheduled Commercial Banks and Non-Scheduled Commercial Banks (Local Area Banks). Scheduled Commercial Banks are banks that are listed in the schedule to the Reserve Bank of India Act, 1934, and may further be classified as public sector banks, private sector banks, correspondent banks, foreign banks and regional rural banks.
Scheduled commercial banks have a presence throughout India, with approximately 70% of bank branches belonging to the public sector banks are located in rural or semi-urban areas of the country.
Public Sector Banks
Public sector banks constitute the largest category in the Indian banking system. They include the State Bank of India and its 7 associate banks, 19 nationalised banks and 196 regional rural banks. As of June 30, 2004, apart from the regional rural banks, the other public sector banks have over 46,500 branches. Public Sector Banks collectively account for approximately 73.2% of the outstanding gross bank credit and 77.9% of the aggregate deposits of the scheduled commercial banks. The large network of public sector bank branches enables them to fund themselves out of low cost deposits. The State Bank of India is the largest public sector bank in India.
Private Sector Banks
After the first phase of bank nationalization was completed in 1969, public sector banks made up the largest portion of Indian banking. In July 1993, as part of the banking reform process and as a measure to induce competition in the banking sector, RBI permitted entry by the private sector into the banking system. This resulted in the introduction of nine private sector banks. These banks are collectively known as the “new” private sector banks. There are ten “new” private sector banks at present. In addition, 20 private sector banks existing prior to July 1993 are currently operating as on June 2004.
Foreign banks
As of June 30, 2004, there were 32 foreign banks with 215 branches operating in India. As part of the liberalization process, RBI has permitted foreign banks to operate more freely, subject to requirements largely similar to those imposed on domestic banks. Foreign banks operate in India through branches of their parent banks. In fiscal 2003, the Government announced that foreign banks would be permitted to incorporate subsidiaries in India. Subsidiaries of foreign banks will have to adhere to all banking regulations, including priority sector lending norms, applicable to domestic banks.
The primary activity of most foreign banks in India has been in the corporate segment. However, in recent years, some of the larger foreign banks have started to make consumer financing a larger part of their portfolios based on the growth opportunities in this area in India. These banks offer products such as automobile, finance, home loans, credit cards and household consumer finance. The government has also announced that foreign banks having branch presence in India will be permitted subject to certain conditions to acquire up to 74.0% shareholding in private sector banks in India.
Non-Bank Finance Companies
There are over 13,671 non-bank finance companies in India as at end-June 2004, mostly in the private sector. All non-bank finance companies are required to register with RBI in terms of the Reserve Bank of India (Amendment) Act, 1997. The nonbank finance companies, on the basis of their principal activities are broadly classified into four categories namely Equipment Leasing, Hire Purchase , Loan and Investment Companies and deposits and business activities of Residuary Non-Banking Companies (RNBCs). The Reserve Bank has put in place a set of directions to regulate the activities of NBFCs under its jurisdiction. The directions are aimed at controlling the deposit acceptance activity of NBFCs. The NBFCs which accept public deposits are subject to strict supervision and capital adequacy requirements of RBI. Out of 13,671 NBFCs registered with RBI as at end-June 2004, 584 NBFCs accept Public Deposits. The scope and activities of non-bank finance companies have grown significantly over the years.
Housing Finance Companies
Housing finance companies form a distinct sub-group of the non-bank finance companies and are regulated by National Housing Bank (NHB). As a result of the various incentives given by the Government for investing in the housing sector in recent years, the scope of their business has grown substantially. Until recently, Housing Development Finance Corporation Limited was the premier institution providing housing finance in India. In recent years, several other players including public and private sector banks have entered the housing finance industry. The National Housing Bank and the Housing and Urban Development Corporation Limited are the two Government-controlled financial institutions created to improve the availability of housing finance in India. The National Housing Bank Act provides for refinancing and securitization of housing loans, foreclosure of mortgages and setting up of the Mortgage Credit Guarantee Scheme.
Specialized Financial Institutions
In addition to the long-term lending institutions, there are various specialized financial institutions that cater to the specific needs of different sectors. They include the National Bank for Agricultural and Rural Development, Export Import Bank of India, Small Industries Development Bank of India, Risk Capital and Technology Finance Corporation Limited, Tourism Finance Corporation of India Limited, National Housing Bank, Power Finance Corporation Limited and the Infrastructure Development Finance Corporation Limited.
Insurance Companies
Currently, there are 27 insurance companies in India, of which 13 are life insurance companies, 13 are general insurance companies and one is a reinsurance company. Of the 13 life insurance companies, 12 are in the private sector and one is in the public sector. Among the general insurance companies, eight are in the private sector and five are in the public sector. The reinsurance company, General Insurance Corporation of India, is in the public sector. Life Insurance Corporation of India, General Insurance Corporation of India and public sector general insurance companies also provide long-term financial assistance to the industrial sector.
ING Bank
The ING Vysya Bank Ltd is one of the well known financial organizations in India. It is applicable for both short term and long term financial solutions. It is mainly an entity or a venture which has been formed with the global financial giant ING of Netherlands. The ING Vysya Bank Ltd is a trusted name in the banking and commercial sector of the country.
The ING Vysya Bank Ltd was established in the month of October in the year 2002. The bank came into existence when the Vysya Bank Ltd went into a venture with global financial giant ING. Vysya Bank Ltd was one of the first private sector banks in the country and was set up in the year 1930. The main objective of setting up the bank was to provide financial support to the various sectors of the economy. In the year 1948, the Vysya Bank was listed among the Scheduled Banks.
In order to increase its profit and add to its operations, the Vysya Bank Ltd merged with ING. The headquarters of the bank is located in the city of Bangalore. Among the total number of branches, there are 468 regular branches, 28 satellite offices, 13 extension counters. The number of ATMs is around 357 which are expected to increase within the next few years. The deposit of the bank amounts to around Rs. 25,865 crore while the net worth is around Rs 14260.00 millions. The profits of the bank amount to around Rs. 242.2 crore.