Introduction to

Commercial Banking

Bank
A bank is a financial intermediary that
accepts deposits and channels those deposits
into lending activities, either directly by
loaning or indirectly through capital markets.
A bank links together customers that have
capital deficits and customers with capital
surpluses.
Source: Wikipedia

History of Banking

1786: East India Co. established General Bank

1790: Bengal Bank established for Europeans in the same market
1791: General Bank became GB of India
1809-1843: Presidency bank established consists of 20% of Govt.
stake
1835: National currency came into existence
1861-62: Currency issue became exclusive right of Government and
distributed by Presidency bank
1863-1876: Punjab bank established by joint stocks and was private
bank
1900: Nationalization came
1921: Punjab Bank merged to form Imperial Bank of India
1935: RBI established & in 1949 became nationalized
After 1969: Govt. nationalized 20 banks including SBI (1955)& hold
91% of business

Commercial Banking & Functions

Commercial banks are an organization which normally performs certain
financial transactions. It performs the twin task of accepting deposits
from members of public and make advances to needy and worthy people
form the society. When banks accept deposits its liabilities increase and it
becomes a debtor, but when it makes advances its assets increases and it
becomes a creditor. Banking transactions are socially and legally
approved. It is responsible in maintaining the deposits of its account
holders

Structure of Indian Banking System

http://www.rbi.org.in/commonman/English/sc
ripts/banksinindia.aspx#SBIA

Regulation for Banking

The Reserve Bank of India, India's central banking authority,
was nationalized on January 1, 1949 under the terms of the
Reserve Bank of India (Transfer to Public Ownership) Act, 1948
(RBI, 2005b).
In 1949, the Banking Regulation Act was enacted which
empowered the Reserve Bank of India (RBI) "to regulate,
control, and inspect the banks in India."
The Banking Regulation Act also provided that no new bank or
branch of an existing bank could be opened without a license
from the RBI, and no two banks could have common directors.

Banking Data 2014