28-09-2012, 11:16 AM
Project Report ON INDIAN BANKING SYSTEM
1INDIAN BANKING.pdf (Size: 439.44 KB / Downloads: 190)
SCOPE OF THE STUDY
A healthy banking system is essential for any economy striving to achieve
good growth and yet remain stable in an increasingly global business
environment. The Indian banking system, with one of the largest banking
networks in the world, has witnessed a series of reforms over the past few
years like the deregulation of interest rates, dilution of the government stake in
public sector banks (PSBs), and the increased participation of private sector
banks. The growth of the retail financial services sector has been a key
development on the market front. Indian banks (both public and private) have
not only been keen to tap the domestic market but also to compete in the global
market place.
RESEARCH METHODOLOGY:-
The first stage included the introduction of Indian Banks and how they work in India. I
choose five criteria Growth, Credit quality, Strength, Profitability, Efficiency /
Profitability. The next stage involved determining the objectives of the study, drafting a
questionnaire will be designed keeping in mind the target audience and objectives of the
study. It will non-disguised in nature and will include a few open-ended questions.
SCOPE OF BANKING SECTOR
Banking business has a history of over 200 years. From the times of the
Bank of Bengal (1806) the sector has been witnessing qualitative and quantitative
changes. Main players during the pre-independence period were Credit Lyonnais,
Allahabad Bank, Punjab National Bank and Bank of India. With 1935 regulation the
Reserve Bank of India was proclaimed the Central Bank of India and was vested
with controlling powers over the commercial banks.
The drastic development taken place during the first 25 years since
independence was Nationalization of many private banks. With this, the central
government became major policy maker for these nationalized banks
With economic liberalization measures many private and foreign banking
companies were allowed to operate in the country. Favorable economic climate and
a variety of other factors such as demand for wide range of financial products from
various sections of the society led to mutually beneficial growth to the banking
sector and economic growth process. This was coincided by technology
development in the banking operations. Today most of the Indian cities have
networked banking facility as well as Internet banking facility. A customer is
empowered to operate his account from any part of the country. UTI Bank, ICICI,
HDFC Bank and Bank of Punjab are the main winners of the race.
FUND BASED AND NON-FUND BASED FUNCTIONS
The difference between fund-based and non-fund based credit assistance lies mainly
in the cash outflow. While the former involves all immediate cash outflow, the latter
may or may not involve cash outflow from a banker. In other words, a fund based
credit facility to a borrower would result in depletion of actual liquidity of a banker
immediately whereas grant of non-fund based credit facilities to a borrower may or
may not affect the banker’s liquidity.
RBI NORMS:
Prudential exposure norms as per extant guidelines of Reserve Bank of India provides
that the maximum exposure of a bank for all its Fund based and Non-fund based credit
facilities, investments, underwriting, investments in Bonds and commercial paper and
any other commitment should not exceed 25 percent of its (bank's) net worth to an
individual borrower and 50 percent of its, net worth to a 'group'. It may however, be
rioted that while calculating exposure, the Non-fund based facilities are to be taken at
50 percent of the sanctioned limit.