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Slide 1 - Definition and Functions of Banking
Slide 1 - Definition and Functions of Banking
DEFINITION OF BANKING
AND
FUNCTIONS OF BANKS
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Outline/Learning Objectives
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As per section 6 of BR act, 1949, Banks are authorised to carry out the
following functions in addition to the above principal functions :
Discounting of Bills
Collection of Cheques and Bills
Payment Function/Remittance Services (DD, BC, MT, TT, ECS,
NEFT, RTGS, SWIFT, Credit/Debit Card/Smart Card etc.)
Safe Custody of Articles
Hiring Safe Deposit Lockers
Conducting Foreign Exchange Transactions
Conducting Government Transactions
Issuing Letter of Credit and Guarantees
Merchant Banking Functions
Collection of Utility Bills/School fees
Distribution of Insurance and Mutual Fund Products
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Principle of Intermediation
Principle of Prudence
Principle of Liquidity
Principle of Profitability
Principle of Solvency
Principle of Trust
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STRUCTURE OF ORGANISED
INDIAN BANKING INDUSTRY
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GENESIS OF INDIAN
BANKING INDUSTRY
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Securitization:
Technological advances:
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Loans
commercial and industrial (C&I) loans
real estate loans
consumer loans
Investments
short-term, liquid securities (e.g., Govt. Treasury securities)
long-term securities (Govt. as well as Corporate)
Cash
Other assets
buildings, equipment, etc.
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Liabilities
Deposits
Transactions or demand deposits
Non-transactions or Term (Time) deposits
Equity
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Deployment of Resources
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BANKING
(BANCASSURANCE/PARA BANKING
ACTIVITIES)
ELECTRONIC
BANKING
GLOBALISATION
CRM
OF BANKING
IN BANKS
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KEY WORDS/TERMINOLOGIES/GLOSSARY
Banking,
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TASK/CONCEPT
CHECK
QUESTIONS FOR SELF REVIEW :
Question #1. Core or Primary activities of
a Bank.
Q. #2. Explain the Process of Financial
Intermediation.
Q. #3. Explain the concepts of SLR, CD
ratio, ID Ratio. How CDR & IDR are
related to economic activity and each
other ?
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of Financial Intermediation
Different types of Intermediation and
various risks of Financial Intermediation.
Why Banks and FIs are special ? Why
they are regulated ?
Legal & Regulatory framework of Indian
Banking System.
Banking Regulation/Role and Functions
of RBI.
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Web Resources
For
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