INTRODUCTION

The banking section will navigate through all the aspects of the Banking System in India. It willdiscuss

upon the matters with the birth of the banking concept in the country to new playersadding their names in

the industry in coming few years.

The banker of all banks, Reserve Bank of India (RBI), the Indian Banks Association (IBA) andtop 20

banks like IDBI, HSBC, ICICI, ABN AMRO, etc. has been well defined under threeseparate heads with

one page dedicated to each bank.

However, in the introduction part of the entire banking cosmos, the past has been well explained

under three different heads namely:

History of Banking in India

Nationalization of Banks in India

Scheduled Commercial Banks in India

The first deals with the history part since the dawn of banking system in India. Government tookmajor

step in the 1969 to put the banking sector into systems and it nationalized 14 private banksin the

mentioned year. This has been elaborated in Nationalization Banks in India. The last butnot the least

explains about the scheduled and unscheduled banks in India. Section 42 (6) (a) ofRBI Act 1934 lays

down the condition of scheduled commercial banks. The descriptions alongwith a list of scheduled

commercial banks are given on this page.

HISTORY OF BANKING IN INDIA

Without a sound and effective banking system in India it cannot have a healthy economy. Thebanking

system of India should not only be hassle free but it should be able to meet newchallenges posed by the

technology and any other external and internal factors.

For the past three decades India's banking system has several outstanding achievements to itscredit. The

most striking is its extensive reach. It is no longer confined to only metropolitans orcosmopolitans in

India. In fact, Indian banking system has reached even to the remote corners ofthe country. This is one of

the main reasons of India's growth process.

The government's regular policy for Indian bank since 1969 has paid rich dividends with the
nationalization of 14 major private banks of India.

Not long ago, an account holder had to wait for hours at the bank counters for getting a draft orfor

withdrawing his own money. Today, he has a choice. Gone are days when the most efficientbank

transferred money from one branch to other in two days. Now it is simple as instantmessaging or dial a

pizza. Money have become the order of the day.

The first bank in India, though conservative, was established in 1786. From 1786 till today, thejourney of

Indian Banking System can be segregated into three distinct phases. They are asmentioned below:
Early phase from 1786 to 1969 of Indian Banks
Nationalization of Indian Banks and up to 1991 prior to Indian banking sector Reforms.
New phase of Indian Banking System with the advent of Indian Financial & Banking
Sector Reforms after 1991.
To make this write-up more explanatory, I prefix the scenario as Phase I, Phase II and Phase III.
Phase I

The General Bank of India was set up in the year 1786. Next came Bank of Hindustan andBengal Bank.

The East India Company established Bank of Bengal (1809), Bank of Bombay(1840) and Bank of Madras

(1843) as independent units and called it Presidency Banks. Thesethree banks were amalgamated in 1920

and Imperial Bank of India was established which startedas private shareholders banks, mostly Europeans

shareholders.

In 1865 Allahabad Bank was established and first time exclusively by Indians, Punjab NationalBank Ltd.

was set up in 1894 with headquarters at Lahore. Between 1906 and 1913, Bank ofIndia, Central Bank of

India, Bank of Baroda, Canara Bank, Indian Bank, and Bank of Mysorewere set up. Reserve Bank of

India came in 1935.

2:-Which TYPE OF SERVICE PREFERS THE MOST by you?

3:-Which of following banks do you have account?

4:-WHAT TYPE OF ACCOUNT DO YOU HAVE IN BANK?
5:-How many services offered by your banks have been Used By you?
6:-How would you know about these services?
7:-What the people think about the Banks?
8:-What a respondent see in purchase of new plan from Banks?
(SBI) is the largest public sector bank in India

SBI has branches and ATMs all over India, details of which are available at theirwebsite. State Bank

ofHyderabad, State Bank ofPatiala, State Bank ofSaurashtra,State Bank ofBikaner and Jaipur ,State Bank

ofIndore, State Bank ofMysore and StateBank ofTravancore are the seven subsidary banks ofSBI. As of

March 2006, SBIholding in these banks varies from 74% to 100% , but is likely to decrease in future.

SBIhas one of the largest network ofATMs in the Asia Pacific region. Many branches ofState Bank of

India are computerized. In places where the Reserve Bank of India, (RBI)the central bank of India does

have an office, SBI carries out many of its functions.SBI timings vary according to location, for example

the Powai, Mumbai branch of StateBank of India is open between 10.15 am to 2pm (Monday-Friday

You can open a public provident fund (PPF) account at any State Bank of India branch.PPF accounts are

one of the few savings instruments which offer a high tax free interestrate of 8% per year. All deposits

made on or before 5th ofa month earn interest for theentire month. If you deposit a cheque in your PPF

account on the 5th ofthe month, youwill get interest for the month, though your account may be debited at

a later date. Theinterest is credited to the account at the end of the accounting year in India.

If you know an agent who is registered with that particular branch of State Bank , he willpay you back, a

part of the commission he receives from the bank. So you can get back0.5% - 0.6% of the amount

deposited immediately by cash. Usually larger the amount,the higher the commission paid back by the

agent (it is negotiable) . The pay-in slip forPPF has 3 sections - depositors copy, agents copy and bank

copy. The agents copy has tobe given to the agent and he will give part of the commission. Earlier

financial servicesfirm like Blue-chip in Mumbai, would also give a commission of 0.25% , but they

havestopped in the last 2 years.

The minimum amount that can be invested in one year is Rs 500 and maximum amount is
Rs 70000. This investment has a lock in period of 15 years. No withdrawals are allow till

6 years after account opening andone withdrawal is allowed per year there after. It
offers rebate under section 80C and the interest is tax free under section 10C.

For cash withdrawals, you can either use a withdrawal slip or cheque. If an account isinactive for a long

time, State Bank of India does not charge any fee for reactivation.However, they have a verification

process, which may take a long time. Paymentof income tax, advance tax, sales tax can be done at SBI
branches. Foreign currencydrafts can also be obtained at the branches.Since SBI offers a variety of

bankingservices, their branches are usually very crowded.

State Bank of India has increase home loan interest rates by 25-75 basis points. Also nofixed rate loans

will be available for periods more than 10 years. These changes havecome into effect from March 1,

2006.
SBI Railway Visa Card allows booking of railway tickets online at the Indian Railways
website at zero transaction charges. Users of this credit card can get back up to 10%of

ticket fare as railway points. These points can be redeemed later, like frequent flyer milesoffered by

airlines. State Bank of India is the largest issuer of debit cards (Maestro) in India

State Bank customers who have to wait a long time to process a bank transaction canregister their

complaint through a touch screen device for customer feedback service atthe branch. The information is

recorded and processed in the central server. As of March2006, it is implemented in 10 branches of SBI

in Mumbai. When SBI employees go on

strike, the Reserve Bank of India takes over all clearing operations. However, banking

operations are affected since SBI has nearly 30% of the total customers of banks in India.Cheques/DD

drawn on SBI was not cleared due to the strike. All government taxes likeincome tax, sales tax, service

tax can be paid at any branch of SBI.

State Bank of India has 52 foreign offices in 34 countries including Australia, UK, USA,Canada, Bahrain,

Nigeria, Bangladesh, Nepal, and Bhutan Sri Lanka.These are usefulfor foreign trade transactions like

opening of Letter of Credit

STRENGTHS
WEAKNESSES

OPP

ORT

UNI
TI
 ES
S – O Strategies
Strength: Large Capitalbase.
Opportunity: Market Expansion.
Strategy: Deep Penetration into
Rural Market.
W – O Strategies
Weakness: Workforce
Responsiveness.
Opportunity: Outsourcing of Non –
Core Business.
Strategy: Outsource Customer
Care & other E-Helps.
T
HRE
ATS
S – T Strategies
Strength: Low operating costs
Threat: Increased Competition
from others Pvt. Banks.
Strategy: Steps to EnsureLoyalty by oldCustomers.
W – T Strategies
Weakness: Not Equal to
International Standards.
Threat: Entry of many Foreign
Banks.
Strategy: Consider additional
benefits