INDIAN BANKING INDUSTRY

Indian Banking Industry

INDIAN BANKING INDUSTRY | MEANING OF BANK | ROLE OF BANKING | TYPES OF BANKING .

Historical background

The first bank of limited liability managed by Indians was Oudh Commercial Bank founded in 1881 . Punjab national bank was established in 1894 .
Swadeshi movement, which began in 1906 , encouraged the formation of a number of commercial banks . Banking crisis during 1913-1917 and failure of 588 banks in various states during thee decade ended 1949 underlined the need for regulating and controlling commercial banks . The banking companies act was passed in February 1949 , which was subsequently amended to read as banking regulation act, 1949 ,. This act provided the legal framework for regulation of the banking sustem by RBI . The largest bank - Imperial bank of India - was nationalised in 1955 and rechristened as state bank of india , followed by formation of its 8 associate banks . January 1 , 1963 state bank of bikaner was marged with state bank of jaipur and a new bank was state bank of bikaner and jaipur In 2008 state bank of saurashtra was merged with SBI . With a view to bring commercial banks into the mainstream of economic development with definite social obligations and objectives , the Government issued an ordinance on 19 july 1969 acquiring ownership and control of 14 major banks in the country . Six more commercial banks were nationalised from 15 april 1980 .

Meaning of Bank

Bank is a lawful organisation , which accepts deposits that can be withdrawn on demand . It also lends money to individuals and business houses that need it .

Role of Banking

Banks provide funds for business as well as personal needs of individuals . They play a significant role in the economy of a nation. Let us know about the role of banking . It encourages savings habit amongst people and thereby makes funds available for productive use , It acts as an intermediary between people having surplus money and those requiring money for various business activities . It facilitates business transactions through receipts and payments by cheques instead of currency. It provides loans and adcances to businessmen for short term and long term purposes . It also facilitates import export transactions . Ir helps in national development by providing credit to farmers, small - scale industries and self - employed people as well as to large business houses which lead to balanced economic development in the country . It helps in raising the standard of living of people in general by providing loans for purchase of consumer durable goods , houses , automobiles, etc .

Types of Banks

There are various types of banks which operate in our country to meet the financial requirements of different categories of people engaged in agriculture , business, profession , etc. On the basis of functions, the banking institutions in India may be divided into the following types :

Central bank ( RBI in India )
Commercial banks - Public sector banks , Private sector banks , Foreign banks
Development banks ( IFCI , SFCs, SIDBI , NABARD )
Co-operative banks - State co-operative banks , Central co-operative banks , Primary credit societies
Specialised banks ( EXIM bank ) .