Professional Documents
Culture Documents
Banking Ope Art Ions
Banking Ope Art Ions
Commercial Banking
Banking
Kamal K Jindal
Managing Director
Global Management Services
New Delhi
kamaljindal@hotmail.com
Banking
Flow of Income
For a bank, a loan that it gives out is an ‘Asset' since it earns revenue,
while a deposit is a “Liability' because it has to be repaid at some point in
time.
EVOLUTION OF INDIAN BANKING
SYSTEM
• Globally banking evolution history common -
Moneylenders accepting deposits and issuing
receipts
• Money lending activity in India prevalent since
Vedic period, i.e., 2000 to 1400 BC [Central
Banking Enquiry Committee (1931)]
• Banking System eminently suited to India’s
requirements existed many centuries before
science of banking became an accomplished fact
in England
[Royal Commission on Indian Currency and
Finance, 1926]
Creation of
IMPERIAL BANK OF INDIA
2. They included Global Trust Bank (the first of such new generation
banks to be set up), which later amalgamated with Oriental Bank
of Commerce, UTI Bank(now re-named as Axis Bank), ICICI
Bank and HDFC Bank. This set the scenario for competition
amongst Banks and led to better services for the customer.
4. Wide spread use of ATMs and Internet Banking has changed the
way banking is done. Branches have become retail centres for
other financial products like credit cards, mutual funds &
insurance.
Structure Of Indian Banking System
Reserve Bank of India
SBI & Subsidiaries Public Sector Banks Private Sector Banks Foreign Banks
FINANCIAL MARKET
CURRENT
CERTIFICATE SAVINGS
DEPOSITS
FLEXI FIXED
RECURRING
BANKING FACILITIES
Forfaiting Factoring
FUND BASED FINANCE
CASH CREDIT
BILLS
OVERDRAFT
FINANCE
LOANS
&
ADVANCES
RETAIL
TERM
FINANCE
FINANCE
SECURITY-CHARGE ON ASSETS
• HYPOTHECATION
• PLEDGE
• MORTGAGE
• ASSIGNMENT
• LIEN
• SET OFF
Bank Finance
Purpose
Need based
Track record
Risk assessment
Margin provided
Tenure of facility
Security available
Repayment sources
6 Cs
• CHARACTER
• CAPTIAL
• CAPACITY
• COLLATERAL
• CONDITION
• COMPLIANCE
Organization Structure Of Banks
ZONAL OFFICE
REGIONAL OFFICE
BRANCHES
Functions at Various Levels
• CREDIT
• PLANNING & DEVELOPMENT
• HUMAN RESOURCES
• NPA MANAGEMENT
• ACCOUNTS
• INTERNATIONAL BUSINESS
• TREASURY & INVESTMENTS
Banking Industry in India
Change
Change in
in the
the financial
financial structure
structure of
of Banks
Banks
Trend
Trend from
from Deposit
Deposit taking
taking to
to financial
financial services
services
Trend
Trend from
from Physical
Physical distribution
distribution to
to Virtual
Virtual Banking
Banking
Trend
Trend from
from fragmentation
fragmentation to
to Consolidation
Consolidation
The Banking Industry : Challenges
Customer Human Skills
Retention
Profitability
Pressures
Increased International
Competition Standards
Risk Corporate
Management Governance
Reinforcing
Technology
24
Customer Centric
Model for Banks
dot.com Technology
Wholesale Retail Rural
Ventures & Backbone &
Banking Banking Financing
Investments Services