Commercial Banks

and
It’s Recent Development

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 Structure of Banking System in India

Scheduled Banks Non-Scheduled Banks

Central Coop. Banks Commercial

and primary credit Banks
societies

State Coop. Commercial Banks

Banks

Public Sector Banks Private Sector Banks Foreign Banks(31)

Old(17) New(8)
SBI & Other
Associate Nationalized
Banks(7) Banks(20)
Definition of Commercial Banks
• An institution which accepts deposits, makes
business loans, and offers related services.
• Commercial banks also allow for a variety of
deposit accounts, such as checking, savings, and
time deposit.
• These institutions are run to make a profit
and owned by a group of individuals.
• Commercial banks offer services to
individuals, they are primarily concerned with
receiving deposits and lending to businesses.
Functions of Commercial Bank
• Primary Functions
– Accepting Deposits
• Current Deposits;
• Saving Deposits;
• Fixed deposits;
• Recurring Deposits;
• Miscellaneous Deposits.
– Granting Loans and Advances.
• Short-term Loans
– Cash Credit;
– Overdraft;
– Discounting of Bills.
• Long-term Loans
– Demand Loan;
– Term Loan.
Functions of Commercial Bank Continue……
• Secondary Functions
– Agency Services
• Collection and payment of cheques and bills on behalf of the
customer;
• Collection of dividends, interest and rent, etc. on behalf of the
customer, if so instructed by them;
• Payment of rent, interest, insurance premium, etc. on behalf of
customers, if so instructed;
• Acting as agents or correspondents on behalf of customers for
other banks and financial institutions at home and abroad.
– General utility Services
• Issuing letters of credit and travelers' cheques;
• Underwriting of shares, debentures, etc.;
• Safe-keeping of valuables in safe deposit locker;
• Supplying trade information and statistical data useful to
customers;
• Acting as a referee regarding the financial status of customers;
• Undertaking foreign exchange business.
Commercial Banks at a glance
 State bank of India and its associates
Sl. No. Name of bank Year of
incorporation

1 State Bank of Bikaner & 1966

Jaipur
2 State Bank of Hyderabad 1941
3 State Bank of India 1955
4 State Bank of Indore 1960
5 State Bank of Mysore 1913

6 State Bank of Patiala 1917

7 State Bank of Travancore 1945
 Nationalized Commercial Banks
Sl. No. Name of bank Year of incorporation
1 Allahabad Bank 1865
2 Andhra Bank 1923
3 Bank of Baroda 1908
4 Bank of India 1906
5 Bank of Maharashtra 1935
6 Canara Bank 1906
7 Central Bank of India 1911
8 Corporation Bank 1906
9 Dena Bank 1938
10 IDBI Bank Ltd 1994
11 Indian Bank 1907
12 Indian Overseas Bank 1937
13 Oriental Bank of Commerce 1943
14 Punjab & Sind Bank 1908
15 Punjab National Bank 1895
16 Syndicate Bank 1925
17 UCO Bank 1943
18 Union Bank of India 1919
19 United Bank of India 1950
20 Vijaya Bank 1931
 Old Private Sector Commercial Banks
Sl. No. Name of bank Year of incorporation
1 Catholic Syrian Bank 1920
2 City Union Bank 1904
3 Development Credit Bank 1995
4 Dhanalakshmi Bank 1927
5 Federal Bank 1931
6 ING Vysya Bank 1930
7 Jammu & Kashmir Bank 1938
8 Karnataka Bank 1924
9 Karur Vysya Bank 1926
10 Lakshmi Vilas Bank 1926
11 Lord Krishna Bank 1940
12 Nainital Bank 1922
13 Ratnakar Bank 1943
14 Sangli Bank 1948
15 SBI Comm. & Intl. Bank 1993
16 South Indian Bank 1929
17 Tamilnad Mercantile Bank 1921
 New Private Sector Commercial Banks
Sl. No. Name of bank Year of
incorporation

1 Centurion Bank 1994

2 HDFC Bank 1994

3 ICICI Bank 1994

4 IndusInd Bank 1995

5 Kotak Mahindra Bank 1985

6 Axis Bank 1994

7 Yes Bank 2003

 Recent Development in Commercial Banking

• Interest rate deregulation

• Electronic Clearing Services (ECS)
• Electronic Funds Transfer (EFT)
• The opening of new clearing houses,
interconnection of clearing houses through the
Indian Financial Network (INFINET)
• The development of a Real-Time Gross
Settlement (RTGS) System
• Centralized Funds Management System (CFMS)
 Continue……….

• E-banking
• E-payment
• Automated teller machines(ATM)
• Negotiated Dealing System (NDS)
• The Structured Financial Messaging
System(SFMS).
 Growth of Commercial Banks
Source: Reserve Bank Of India

21-05-2010 22-05-2009 23-05-2008

Aggregate Deposits 44,59,788 39,02,674 31,77,793
of Residents(1+2)
1. Demand Deposits 5,73,356 5,09,968 4,51,609
2. Time Deposits of 38,86,432 33,92,706 27,26,184
Residents(2.1+2.2)
2.1 Short-term Time 17,48,894 15,26,718 12,26,783
Deposits
2.2 Long-term Time 21,37,537 18,65,988 14,99,401
Deposits
Funding from 1,15,192 1,04,429 1,04,075
Financial Institutions
 Branches and ATMs of Scheduled Commercial Banks
(As at end-March 2009)
Bank Group Number of Bank/Branches Number of ATMs Off-site ATMs as
ATMs percent­
Rural Semi- Urban Metro­ Total On-siteOff- site Total as age of
urban politan percent Bran
age of ches
total
ATMs 

1 2 3 4 5 6 7 8 9 10 11
i) Nationalised Banks 13,381 8,669 8,951 8,375 39,376 10,233 5,705 15,938 35.8 40.2

ii) State Bank Group 5,560 4,835 3,043 2,624 16,062 7,146 4,193 11,339 37.0 29.0

iii) Old Private Sector 842 1,554 1,344 933 4,673 1,830 844 2,674 31.6 56.9
Banks
iv) New Private Sector 271 1,084 1,371 1,478 4,204 5,166 7,480 12,646 59.2 296.6
Banks
v) Foreign Banks 4 4 52 233 293 270 784 1,054 74.4 357.3

Total (i to v) 20,058 16,146 14,761 13,643 64,608 24,645 19,006 43,651 43.5 67.0
 Transactions through Retail Electronic Payment Methods
Type Volume of transactions (000’s) Growth in Value of transactions
  volume (per (Rs. crore)
cent)

2006-07 2007-08 2008-09 2007- 2008-09 2006-07 2007-08 2008-09

08

1 2 3 4 5 6 7 8 9

1. ECS-Credit 69,019 78,365 88,394 13.5 12.8 83,273 7,82,222 97,487

2. ECS-Debit 75,202 1,27,120 1,60,055 69.0 25.9 25,441 48,937 66,976

3. EFT/ NEFT 4,776 13,315 32,161 178.8 141.5 77,446 1,40,326 2,51,956

4. Credit Cards 1,69,536 2,28,203 2,59,561 34.6 13.7 41,361 57,984 65,356

5. Debit Cards 60,177 88,306 1,27,654 46.7 44.6 8,172 12,521 18,547

Total 3,78,710 5,35,309 6,67,825 41.4 24.8 2,35,693 10,41,990 5,00,322