DEPARTMENT OF TECHNICAL EDUCATION

ANDHRA PRADESH
Name : P. Samba Murthy,
Designation : Head of Department

Branch : D.C.C.P.
Institute : S.R.R.S. Govt. Polytechnic,
Sircilla, Karimnagar District
Year/Semester : V Semester
Subject : Banking – I
Subject Code : CCP- 504(B)
Topic : Indian Banking Industry – Growth
Duration : 50 Minutes
Sub-Topic : Need for Privitization and
globalization
Teaching Aids : PPT AND ANIMATIONS
CCP504(B).31 1
Objectives
On completion of this period, you would be able to
understand

 The need for globalization of Banks

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RECAP

 So far, we have discussed at length with regard to the

need for globalization and its advantages to the banking
sector.
 Now let us learn some more points with regard to the
globalization of banking sector in India.
.

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RECAP

• The thrust of the new economic policy is towards

creating a more competitive environment in the
economy as a means to improve the productivity
and efficiency of the system.

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RECAP

 To achieve the objective of the new economic

policy various reforms have been introduced in the
industrial policy, fiscal and monetary policy

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RECAP

 These reforms related to consolidating the supply

side of the economic system of the country.
They include:

 Liberalization
 Privatization
 Globalization and
 Competitive public sector

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Advantages of globalization

 Due to the LPG (Liberalization, Privatization and

Globalization), the international competition led
to the combination of Industries.

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Advantages of globalization

• New industrial concerns were formed by merger and

amalgamation of small and big firms.

• The large scale industries have surplus funds to
meet the needs of working capital and easy access
to capital market

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 Advantages of globalization

 Consequent on this, banks turned their attention

towards the long term investment.
 The LPG has removed the physical boundaries of
the countries in respect of Business and banking
and led to universal Banking

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Universal banking

 Universal bank is a name given to banks engaged

in diverse kind of banking activities.
 Under the universal banking system, the banks do
broad based and comprehensive activities.

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Universal banking

 The activities include making loans and advances

for long-term, providing working-capital, corporate
advisory services, insurances, depository
services, brokerage, venture capital, underwriting
new debt and equity shares etc.,

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 Universal banking

 In India, State Bank of India is practicing “Broad

Universal Banking”.
 The merger of ICICI (Industrial Credit and
Investment Corporation of India) and ICICI
bank is more towards setting up of Universal
Banking.

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Overseas Banking

 Many banks have an international division in the

form of overseas banking or offshore banking.
 The universal banking is truly international business
in which bank and management groups in many
countries participate.

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Overseas Banking

 It facilities the transfer of funds from one country to

other.
 Universal banking is not subject to domestic
monitory and fiscal regulations.
 It is also expected from those regulations which
govern the branches of foreign banks.

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Overseas Banking

 Some of the nationalized commercial banks have a

number of branches in abroad.
 Now private banks also took initiation to over their
branches abroad to do overseas banking.

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Overseas Banking

 Universal bank is a name given to banks engaged in

diverse kind of banking activities.
 Under the universal banking system, the banks do
broad based and comprehensive activities.
 The activities include making loans and advances for
long-term, providing working-capital, corporate advisory
services, insurances, depository services, brokerage,
venture capital, underwriting new debt and equity
shares etc.
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Overseas Banking

 In India, SBI is practicing “Broad Universal

Banking.” The merger of ICICI (Industrial Credit
and Investment Corporation of India) and ICICI
bank is more towards setting up of Universal
Banking.

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SUMMARY

 There was so many reforms in the banking sector

due to globalization.
 The banking sector was diversified in multi-level
functions.
 There was lot of change in the economic policy. In
the system, there was improvement in the
productivity and efficiency.
 Ultimately, the customer is enjoying the fruits of
globalization.

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Frequently Asked Questions

 What are reforms that taken place in the banking

sector due to globalization?
 Amplify L.P.G. Explain its importance in the
banking sector.
 Briefly explain the term universal banking.

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