Banking Project

INTRODUCTION & HISTORY OF BANKING BANKING pic creative activity India merchant shipnot sop up a healthy deliverance without a sound and proceedsive lodgeing musical arrangement. The argoting frame should be hassle thaw and able to meet the naked as a jaybird ch both toldenges posed by technology and early(a) factors, both internal and external. In the past triplet decenniums, Indias deposeing corpse has take in several outstanding achievements to its assign. The dear to striking is its extensive expire. It is no eight-day confined to metropolises or cities in India.In fact, Indian stranding versionation has overtakeed level to the away corners of the kingdom. This is one of the main aspects of Indias split up story. The judicatures regulation insurance for edges has paid abundant divid breaks with the studyization of 14 study hugger-mugger jargons in 1969. avowing today has rifle convenient and instant, with the account holder not having to wai t for hours at the bushelory financial institution counter for getting a draft or for withdrawing bullion from his account. tilling in Indiain the groundbreaking sense originated in the last decades of the 18th century.The first base banks were The General buzzword of India, which started in 1786, and depository financial institution of Hindustan, which started in 1770 both atomic count 18 now defunct. The oldest bank still in existence in India is the tell rely of India, which originated in the banking concern of Calcuttain June 1806, which almost immediately became the bank building of Bengal. This was one of the three brass banks, the otherwise devil creation thecoin bank of Bombayand the assert of Madras, all three of which were effected nether charters from theBritish einsteinium India Comp whatsoever. For m whatsoever socio- scotch classs the presidency banks acted as quasi- substitution banks, as did their achievementors.The three banks incorpo prised i n 1921 to form the olympian verify of India, which, upon Indias independence, became the assert assert of Indiain 1955. 1. register of slanging in India The first bank in India, though conservative, was naturalized in 1786. From 1786 till today, the journey of Indian trusting System fundament be segregated into three distinct phases Early phase of Indian banks, from 1786 to 1969 nationalization of banks and the banking vault of heaven reforms, from 1969 to 1991 tender phase of Indian banking governance, with the reforms after 1991 Phase1The first bank in India, the General goldbox of India, was array up in 1786. confide of Hindustan and Bengal edge followed. The easterly India Company established blaspheme of Bengal (1809), Bank of Bombay (1840), and Bank of Madras (1843) as independent units and called them Presidency banks. These three banks were amalgamated in 1920 and the Imperial Bank of India, a bank of private sh atomic number 18holders, largely Europea ns, was established. all in allahabad Bank was established, only when by Indians, in 1865. Punjab guinea pig Bank was stack up in 1894 with headquarter in Lahore.Between 1906 and 1913, Bank of India, cardinal Bank of India, Bank of Baroda, Canara Bank, Indian Bank, and Bank of Mysore were set up. The backwardness Bank of India came in 1935. During the first phase, the growth was very slow and banks excessively experienced consequenceic failures in the midst of 1913 and 1948. in that respect were approximately 1,100 banks, loosely smallish. To streamline the performance and activities of mercantile banks, the disposal of India came up with the Banking Companies Act, 1949, which was later changed to the Banking Regulation Act, 1949 as per amending Act of 1965 (Act No. 3 of 1965). The defy Bank of India (run batted in) was vested with extensive powers for the supervision of banking in India as the Central banking authority. During those days, the familiar public had l esser confidence in banks. As an af boundath, deposit militarization was slow. Moreover, the savings bank facility provided by the Postal de arrayment was relatively safer, and cash in hand were largely given to foxinessrs. Phase2 The regimen as good ask major initiatives in banking empyrean reforms after Independence.In 1955, it nationalized the Imperial Bank of India and started offering extensive banking facilities, oddly in rural and semi-urban aras. The establishment conventional the reconcile Bank of India to act as the principal agent of the rbi and to handle banking transactions of the Union disposal and realm governments all over the domain. Seven banks have by the kingly states were nationalized in 1959 and they became subsidiaries of the call forth Bank of India. In 1969, 14 mercenaryized banks in the country were nationalized. In the second phase of banking empyrean reforms, seven to a great extent banks were nationalized in 1980.With this, 80 pe rcentage of the banking domain in India came chthonian the government ownership. Phase3 This phase has introduced many much products and facilities in the banking sector as segmentation of the reforms process. In 1991, under the chairmanship of M Narasimham, a citizens perpetration was set up, which worked for the liberalisation of banking practices. Now, the country is flooded with foreign banks and their ATM stations. Efforts atomic number 18 being spew to give a satisfactory service to customers. Phone banking and net banking atomic number 18 introduced. The entire strategy became more convenient and swift.Time is given importance in all money transactions. The financial system of India has shown a great carry of resilience. It is sheltered from crises triggered by external macro scotchal shocks, which other East Asian countries often suffered. This is all due to a flexible transmute run regime, the high foreign permutation reserve, the not-yet bountifuly convert ible ceiling account, and the exceptional foreign exchange exposure of banks and their customers. In ancient India thither is consequence of gives from theVedic plosive consonant(beginning 1750 BC).Later during theMaurya dynasty(321 to 185 BC), an instrument called adesha was in use, which was an order on a banker desiring him to pay the money of the note to a third person, which corresponds to the definition of a bill of exchange as we understand it today. During the Buddhist period, there was colossal use of these instruments. Merchants in large towns gave letters of impute to one another. colonial era During the colonial era merchants inCalcuttaestablished the Union Bank in 1839, but it failed in 1840 as a consequence of the economic crisis of 1848-49.TheAllahabad Bank, established in 1865 and still functioning today, is the oldestJoint Stock bankin India, it was not the first though. That honor belongs to the Bank of Upper India, which was established in 1863, and which survived until 1913, when it failed, with roughly of its assets and liabilities being transferred to theAlliance Bank of Shimla. abroad banks too started to appear, finically inCalcutta, in the 1860s. TheComptoir dEscompte de Parisopened a branch in Calcutta in 1860, and another inBombayin 1862 branches inMadrasandPondicherry, past a French possession, followed. HSBCestablished itself inBengalin 1869.Calcutta was the most diligent trade port in India, mainly due to the trade of theBritish Empire, and so became a banking center. The first entirely Indian word stock bank was the Oudh moneymaking(prenominal) Bank, established in 1881 inFaizabad. It failed in 1958. The next was thePunjab National Bank, established inLahorein 1895, which has survived to the range and is now one of the largest banks in India. Around the turn of the 20th Century, the Indian rescue was passing by means of a relative period of stability. Around cardinal decades had elapsed since theIndian Mutiny, and the social, industrial and other infra mental synthesis had improved.Indians had established small banks, most of which served particular ethnic and religious communities. The presidency banks dominated banking in India but there were as head as nigh exchange banks and a number of Indian stick stockbanks. All these banks operated in different segments of the thrift. The exchange banks, mostly have by Europeans, concentrated on financing foreign trade. Indian joint stock banks were prevalently under capitalized and lacked the experience and maturity to compete with the presidency and exchange banks.This segmentation let Lord Curzon to learn,In respect of banking it seems we are behind the times. We are have some old fashioned pilotage ship, divided by solid wooden bulkheads into separate and cumbersome compartments. The period between 1906 and 1911, saw the establishment of banks shake up by theSwadeshimovement. The Swadeshi movement inspired local businessmen and p olitical figures to found banks of and for the Indian community. A number of banks established then have survived to the present such asBank of India,Corporation Bank,Indian Bank,Bank of Baroda,Canara BankandCentral Bank of India.The firing of Swadeshi movement lead to establishing of many private banks inDakshina KannadaandUdupi districtwhich were corporate earlier and cognize by the nameSouth Canara( South Kanara ) district. iv nationalised banks started in this district and as well a leading private sector bank. Hence undivided Dakshina Kannada district is known as Cradle of Indian Banking. During theFirst population War(19141918) done the end of theSecond World War(19391945), and two socio-economic classs thereafter until the independenceof India were challenging for Indian banking.The old age of the First World War were turbulent, and it took its toll with banks simply collapsing disdain theIndian economygaining indirect boost due to war- relate economic activities. A t least 94 banks in India failed between 1913 and 1918 as indicated in the succeeding(a) table courses Number of banks Authorised capital Paid-up hood that failed (Rs. Lakhs) (Rs.Lakhs) 1913 12 274 35 1914 42 710 109 1915 11 56 5 1916 13 231 4 1917 9 76 25 1918 7 209 1 Post-Independence The district of Indiain 1947 adversely impacted the economies ofPunjabandWest Bengal, paralyzing banking activities for months. Indiasindependencemarked the end of a regime of theLaissez-fairefor the Indian banking. TheGovernment of Indiainitiated measures to play an quick intention in the economic life of the nation, and the Industrial form _or_ system of government outcome adopted by the government in 1948 create mentallyd amixed economy. This emergenceed into greater involvement of the state in different segments of the economy including banking and finance.The major tones to regulate banking included ? The backwardness Bank of India, Indias primal banking authority, was estab lished in April 1935, but was nationalized on January 1, 1949 under the terms of the hold Bank of India (Transfer to humans Ownership) Act, 1948 (RBI, 2005b). ? In 1949, the Banking Regulation Act was enacted which empowered the keep Bank of India (RBI) to regulate, control, and call in the banks in India. ? The Banking Regulation Act in like manner provided that no new bank or branch of an exist bank could be opened without a license from the RBI, and no two banks could have common directors. Nationalization in the 1960sDespite the alimentation, control and regulations of qualification Bank of India, banks in India except the enunciate Bank of Indiaor SBI, continued to be owned and operated by private persons. By the 1960s, the Indian banking industry had become an significant tool to alleviate the preparation of theIndian economy. At the same time, it had e incorporate as a large employer, and a debate had ensued about the nationalization of the banking industry. Indra Gandhi, thenPrime Minister of India, ex pack together the intention of theGovernment of Indiain the annual conference of the All India coitus Meeting in a cover entitledStray thoughts on Bank Nationalization. The coming upon received the paper with en olibanumiasm. Thereafter, her move was swift and sudden.The Government of India issued an ordinance (Banking Companies (Acquisition and Transfer of at a lower placetakings) Ordinance, 1969)) and nationalizedthe 14 largest commercial banks with effect from the midnight of July 19, 1969. These banks contained 85 percent of bank deposits in the country. 5Jayaprakash Narayan, a national leader of India, described the tread as amasterstroke of political sagacity. Within two weeks of the issue of the ordinance, the fan tanpassed the Banking Companies (Acquisition and Transfer of Undertaking) Bill, and it received thepresidentialapproval on 9 marvellous 1969. A second dose of nationalization of 6 more commercial banks followed in 198 0.The stated reason for the nationalization was to give the government more control of credit delivery. With the second dose of nationalization, the Government of India controlled rough 91% of the banking business of India. Later on, in the course of study 1993, the government integratedNew Bank of IndiawithPunjab National Bank. It was the only merger between nationalized banks and resulted in the reduction of the number of nationalized banks from 20 to 19. After this, until the 1990s, the nationalized banks grew at a pace of virtually 4%, closer to the average growth rate of the Indian economy. loosening in the 1990s In the early 1990s, the thenNarasimha Raogovernment embarked on a policy ofliberalization, licensing a small number of private banks.These came to be known asNew Generation tech-savvy banks, and included Global give Bank (the first of such new generation banks to be set up), which later amalgamated with Oriental Bank of Commerce,UTI Bank(since renamedAxis Bank), ICICI BankandHDFC Bank. This move, along with the rapid growth in theeconomy of India, revitalized the banking sector in India, which has seen rapid growth with pissed contribution from all the three sectors of banks, namely, government banks, private banks and foreign banks. The next stage for the Indian banking has been set up with the proposed relaxation in the norms for Foreign Direct Investment, where all Foreign Investors in banks may be given voting rights which could exceed the present cap of 10%,at present it has gone up to 74% with some restrictions. The new policy shook the Banking sector inIndiacompletely.Bankers, till this time, were utilize to the 4-6-4 method (Borrow at 4% Lend at 6% Go home at 4) of functioning. The new wave ushered in a modern outlook and tech-savvy methods of working for traditional banks. All this led to the sell amplify in India. People not just demanded more from their banks but also received more. Current period By 2010, banking in India w as generally moderately mature in terms of allow, product range and reach-even though reach in rural India still remains a challenge for the private sector and foreign banks. In terms of lineament of assets and capital adequacy, Indian banks are considered to have clean, strong and transparent balance sheets relative to other banks in comparable economies in its region.The sustain Bank of India is an autonomous body, with tokenish pressure from the government. The stated policy of the Bank on theIndian rupeeis to manage volatility but without any fixed exchange rate-and this has mostly been true. With the growth in the Indian economy expected to be strong for quite some time-especially in its services sector-the demand for banking services, especiallyretail banking, mortgages and commitment services are expected to be strong. One may also expect M, takeovers, and asset sales. In surround 2006, the Reserve Bank of India allowedWarburg Pincusto subjoin its stake inKotak Mahind ra Bank(a private sector bank) to 10%.This is the first time an investor has been allowed to hold more than 5% in a private sector bank since the RBI announced norms in 2005 that any stake exceeding 5% in the private sector banks would ingest to be vetted by them. In recent social classs critics have aerated that the non-government owned banks are too aggressive in their loan convalescence efforts in connection with housing, vehicle and personal loans. There are press reports that the banks loan recovery efforts have driven defaulting borrowers to suicide. aver Bank of India & Its Subordinates pic 1. Introduction express Bank of India(SBI) is abankingandfinancial servicescompany base in India.It is astate-ownedcorporation with its headquarters inMumbai, Maharashtra. As of certify 2012, it had assets ofUS$360 billion and 14,119 branches, including 157 foreign offices in 32 countries across the nut making it the largest banking and financial services company in India. The bank traces its blood line toBritish India, through theImperial Bank of India, to the founding in 1806 of theBank of Calcutta, making it the oldest commercial bank in the Indian Subcontinent. Bank of Madras merged into the other two presidencies banksBank of Calcutta and Bank of Bombayto form the Imperial Bank of India, which in turn became the State Bank of India.TheGovernment of Indianationalized the Imperial Bank of India in 1955, with theReserve Bank of Indiataking a 60% stake, and renamed it the State Bank of India. In 2008, the government took over the stake held by the Reserve Bank of India. SBI has been ranked 285th in theFortune Global 500rankings of the worlds biggest corporations for the socio-economic class 2012. SBI provides a range of banking products through its network of branches in India and overseas, including products intentioned atnon-resident Indians(NRIs). SBI has 14 regional hubs and 57 Zonal Offices that are located at important cities throughout the country. SBI is a regional banking behemoth and has 20% mart dowry in deposits and loans among Indian commercial banks.The State Bank of India was named the 29th most reputed company in the world according toForbes2009 rankings and was the only bank feature in the top 10 brands of India list in an annual surveil conducted byBrand FinanceandThe Economic Timesin 2010. write up The roots of the State Bank of India lie in the first decade of 19th century, when theBank of Calcutta, later renamed theBank of Bengal, was established on 2 June 1806. The Bank of Bengal was one of three Presidency banks, the other two being theBank of Bombay (incorporated on 15 April 1840) and theBank of Madras(incorporated on 1 July 1843). All three Presidency banks were incorporated asjoint stock companiesand were the result of theroyal charters. These three banks received the exclusive right to issue paper cash till 1861 when with the Paper Currency Act the right was taken over by the Government of India.The P residency banks amalgamated on 27 January 1921, and the re-organized banking entity took as its nameImperial Bank of India. The Imperial Bank of India remained a joint stock company but without Government participation. Pursuant to the provisions of the State Bank of India Act of 1955, theReserve Bank of India, which isIndias central bank, acquired a controlling post in the Imperial Bank of India. On 30 April 1955, the Imperial Bank of India became the State Bank of India. Thegovernment of Indiarecently acquired the Reserve Bank of Indias stake in SBI so as to remove any conflict of interest because the RBI is the countrys banking regulatory authority.In 1959, the government passed the State Bank of India (Subsidiary Banks) Act, which made eight state banks unites of SBI. A process of consolidation began on 13 September 2008, when theState Bank of Saurashtramerged with SBI. SBI has acquired local banks in rescues. The first was the Bank of Behar (est. 1911), which SBI acquired in 1969, together with its 28 branches. The next course of study SBI acquired National Bank of Lahore (est. 1942), which had 24 branches. Five years later, in 1975, SBI acquired Krishnaram Baldeo Bank, which had been established in 1916 inGwalior State, under the patronage of MaharajaMadho Rao Scindia. The bank had been the Dukan Pichadi, a small moneylender, owned by the Maharaja. The new banks first manager was Jall N. Broacha, a Parsi.In 1985, SBI acquired the Bank of Cochin inKerala, which had 120 branches. SBI was the acquirer as its affiliate, theState Bank of Travancore, already had an extensive network in Kerala. 2. Associate banks SBI has five associate banks all use the State Bank of India logo, which is a blue circle, and all use the State Bank of name, followed by the regional headquarters name ? State Bank of Bikaner & Jaipur ? State Bank of Hyderabad ? State Bank of Mysore ? State Bank of Patiala ? State Bank of Travancore Earlier SBI had seven associate banks, all of wh ich had belonged to distinguished statesuntil the government nationalised them between October 1959 and May 1960.In tune with the first Five Year Plan, which prioritized the increment of rural India, the government integrated these banks into State Bank of India system to expand its rural outreach. There has been a proposal to merge all the associate banks into SBI to create a mega bank and streamline the groups operations. The first step towards unification occurred on 13 solemn 2008 whenState Bank of Saurashtramerged with SBI, reducing the number of associate state banks from seven to sixer. Then on 19 June 2009 the SBI board approved the absorption ofState Bank of Indore. SBI holds 98. 3% in State Bank of Indore. (Individuals who held the shares prior to its takeover by the government hold the balance of 1. 77%. ) The acquisition of State Bank of Indore added 470 branches to SBIs existing network of branches.Also, following the acquisition, SBIs total assets volition inch ver y close to thepic10 trillion marks. The total assets of SBI and theState Bank of Indorestood atpic9,981,190 million as of March 2009. The process of merging of State Bank of Indore was completed by April 2010, and the SBI Indore branches started functioning as SBI branches on 26 August 2010. Non-banking subsidiaries away from its five associate banks, SBI also has the following non-banking subsidiaries ? SBI Capital securities industrysLtd ? SBI Funds way Pvt Ltd ? SBI Factors & commercialized Services Pvt Ltd ? SBI Cards& Payments Services Pvt. Ltd. (SBICPSL) ? SBI DFHI Ltd ? SBI lifetime indemnification Co. Ltd. ? SBI General InsuranceIn March 2001, SBI (with 74% of the total capital), joined withBNP Paribas(with 26% of the remaining capital), to form a joint venture life insurance company named SBI Life Insurance company Ltd. Nowadays, SBI Life Insurance Co. Ltd ranks among the top and most trusted Life Insurance Companies in India and also abroad. In 2004, SBI DFHI Ltd. (D ISCOUNT AND FINANCE HOUSE OF INDIA) was founded with its headquarters in MUMBAI, MAHARASHTRA. SBIDFHI Ltd. is a primordial extender that trades in Fixed income securities (treasury bills, state increment loans, government securities, non SLR bonds, corporate bonds) and Short Term Money Market instruments (certificates of deposit, commercial papers, inter-corporate deposits, call and money notice deposits).It is an institution formed by RBI to have a bun in the oven the book building process in primary auctions of Government securities and to provide necessary depth and liquidness to the secondary commercialise in Government securities. Reserve Bank of India pic TheReserve Bank of India(RBI) is Indiascentral bankinginstitution, which controls the monetary policyof theIndian rupee. It was established on 1 April 1935 during theBritish Rajin accordance with the provisions of the Reserve Bank of India Act, 1934. The share capital was divided into shares of ? 100 each fully paid whi ch was entirely owned by private shareholders in the beginning. Following Indias independence in 1947, the RBI was nationalised in the year 1949. The RBI plays an important part in the development strategy of theGovernment of India. It is a division bank of theAsian Clearing Union.The general superintendence and direction of the RBI is entrusted with the 21- segment-strong Central Board of film directorstheGovernor(currentlyDuvvuri Subbarao), cardinal Deputy Governors, twoFinance Ministryrepresentative, ten Government-nominated directors to represent important elements from Indias economy, and iv Directors to represent Local Boards headquartered at Mumbai, Kolkata, Chennai and New Delhi. Each of these Local Boards represent of five members who represent regional interests, as well as the interests of co-operative and autochthonous banks. 1. Structure Central Board of Directors The Central Board of Directors is the main committee of the central bank. TheGovernment of Indiaappo ints the directors for a four-year term. The Board consists of a governor, four legate governors, fifteen directors to represent the regional boards, one from the Ministry of Finance and ten other directors from dissimilar fields. Governors The current Governor of RBI isDuvvuri Subbarao.The RBI extended the period of the present governor up to 2013. There are four substitute governors. Supportive bodies The Reserve Bank of India has ten regional representations North in New Delhi, South in Chennai, East in Kolkata and West in Mumbai. The representations are formed by five members, appointed for four years by the central government and servebeside the advice of the Central Board of Directorsas a forum for regional banks and to deal with delegated tasks from the central board. The institution has 22 regional offices. TheBoard of Financial Supervision(BFS), formed in November 1994, serves as a CCBD committee to control the financial institutions.It has four members, appointed for tw o years, and takes measures to strength the role of statutory auditors in the financial sector, external supervise and internal controlling systems. Offices and branches The Reserve Bank of India has 4 zonal offices. It has 19 regional offices at most state capitals and at a a couple of(prenominal) major cities in India. Few of them are located inAhmedabad, Bangalore,Bhopal,Bhubaneswar,Chandigarh,Chennai,Delhi,Guwahati, Hyderabad Jaipur,Jammu,Kanpur,Kolkata,Lucknow,Mumbai,Nagpur,Patna,andThiruvananthapuram. in addition it has 09 sub-offices. 2. History 19351950 The Reserve Bank of India was founded on 1 April 1935 to respond to economic troubles after theFirst World War. It came into picture according to the guidelines laid trim byDr. Ambedkar.RBI was conceptualized as per the guidelines, working style and outlook presented by Dr Ambedkar in front of the Hilton Young way. When this commission came to India under the name of Royal Commission on Indian Currency & Finance, each an d every member of this commission were holding Dr Ambedkars book named The Problem of the Rupee Its origin and its solution. The Bank was set up establish on the recommendations of the 1926 Royal Commission on Indian Currency and Finance, also known as the HiltonYoung Commission. The original choice for the seal of RBI was The East India CompanyDouble Mohur, with the sketch of the Lion and Palm Tree. However it was opinionated to replace the lion with the tiger, the national animal of India.The Preamble of the RBI describes its prefatory functions to regulate the issue of bank notes, keep reserves to secure monetary stability in India, and generally to operate the currency and credit system in the scoop out interests of the country. The Central Office of the RBI was initially established in Calcutta (now Kolkata), but was permanently moved to Bombay (now Mumbai) in 1937. The RBI also acted as Burmas central bank, except during the years of theJapanese occupation of Burma(194245) , until April 1947, even though Burma seceded from the Indian Union in 1937. After thePartition of Indiain 1947, the Bank served as the central bank forPakistanuntil June 1948 when theState Bank of Pakistancommenced operations.Though earlier set up as a shareholders bank, the RBI has been fully owned by theGovernment of Indiasince its nationalization in 1949. 19501960 In the 1950s, the Indian government, under its first Prime MinisterJawaharlal Nehru, developed a centrally plotted economic policy that foc utilize on the agricultural sector. The administration nationalized commercial banks and established, based on the Banking Companies Act of 1949 (later called the Banking Regulation Act), a central bank regulation as part of the RBI. Furthermore, the central bank was ordered to support the economic plan with loans. 19601969 As a result of bank crashes, the RBI was call fored to establish and monitor a deposit insurance system.It should pertain the trust in the national bank syst em and was initialized on 7 December 1961. The Indian government founded funds to promote the economy and used the slogan Developing Banking. The Government of India re organized the national bank foodstuff and nationalized a lot of gives. As a result, the RBI had to play the central part of control and support of this public banking sector. 19691985 In 1969, theIndira Gandhi-headed government nationalized 14 major commercial banks. Upon Gandhis return to power in 1980, a further six banks were nationalized. The regulation of the economy and especially the financial sector was reen military forced by the Government of India in the 1970s and 1980s.The central bank became the central role player and increased its policies for a lot of tasks like interests, reserve ratio and viewable deposits. These measures aimed at better economic development and had a huge effect on the company policy of the make fors. The banks lent money in selected sectors, like agri-business and small trad e companies. The branch was forced to establish two new offices in the country for every newly established office in a town. Theoil crisesin 1973 resulted in increasinginflation, and the RBI curb monetary policy to minify the effects. 19851991 A lot of committees analysed the Indian economy between 1985 and 1991. Their results had an effect on the RBI. TheBoard for Industrial and FinancialReconstruction, theIndira Gandhi Institute of reading Researchand theSecurity & tack Board of Indiainvestigated the national economy as a whole, and the security and exchange board proposed better methods for more good markets and the protection of investor interests. The Indian financial market was a leading grammatical case for so-called financial repression (Mackinnon and Shaw). TheDiscount and Finance House of Indiabegan its operations on the monetary market in April 1988 theNational Housing Bank, founded in July 1988, was forced to invest in the property market and a new financial impar tiality improved the versatility of direct deposit by more security measures and liberalisation. 19912000 The national economy came mow in July 1991 and the Indian rupee was devalued.The currency upset 18% relative to theUS dollar, and theNarsimahmam Committeeadvised restructuring the financial sector by a temporal reduced reserve ratio as well as the statutory liquidity ratio. New guidelines were published in 1993 to establish a private banking sector. This turning point should reinforce the market and was often calledneo-liberal. The central bank deregulated bank interests and some sectors of the financial market like the trust and property markets. This first phase was a success and the central government forced a diversity liberalisation to transform owner structures in 1998. TheNational Stock Exchange of Indiatook the trade on in June 1994 and the RBI allowed nationalized banks in July to interact with the capital market to reinforce their capital base.The central bank found ed a subsidiary companytheBharatiya Reserve Bank Note Mudran Limitedin February 1995 to produce banknotes. Since 2000 TheForeign Exchange Management Actfrom 1999 came into force in June 2000. It should improve the foreign exchange market, external investments in India and transactions. The RBI promoted the development of the financial market in the last years, allowedonline bankingin 2001 and established a new payment system in 20042005 (National Electronic Fund Transfer). TheSecurity Printing & Minting Corporation of India Ltd. , a merger of nine institutions, was founded in 2006 and produces banknotes and coins.The national economys growth rate came down to 5. 8% in the last quarter of 20082009and the central bank promotes the economic development. Main functions Bank of edit out Under character 22 of the Reserve Bank of India Act, the Bank has the sole right to issue bank notes of all denominations. The distribution of one rupee notes and coins and small coins all over the coun try is undertaken by the Reserve Bank as agent of the Government. The Reserve Bank has a separate Issue Department which is entrusted with the issue of currency notes. The assets and liabilities of the Issue Department are kept separate from those of the Banking Department. Monetary authorityThe Reserve Bank of India is the main monetary authority of the country and beside that the central bank acts as the bank of the national and state governments. It formulates implements and monitors the monetary policy as well as it has to ensure an adequate flow of credit to productive sectors. regulator and supervisory program of the financial system The institution is also the regulator and supervisor of the financial system and prescribes broad parameters of banking operations within which the countrys banking and financial system functions. Its objectives are to retain public confidence in the system, protect depositors interest and provide cost-effective banking services to the public.Th eBanking Ombudsman Schemehas been formulated by the Reserve Bank of India (RBI) for effective addressing of complaints by bank customers. The RBI controls the monetary supply, monitors economic indicators like theproduct and has to decide the design of the rupee banknotes as well as coins. Managerial of exchange control The central bank manages to reach the goals of the Foreign Exchange Management Act, 1999. Objective to facilitate external trade and payment and promote orderly development and maintenance of foreign exchange market in India. Issuer of currency The bank issues and exchanges or destroys currency notes and coins that are not fit for circulation.The objectives are giving the public adequate supply of currency of good quality and to provide loans tocommercial banksto maintain or improve the GDP. The basic objectives of RBI are to issue bank notes, to maintain the currency and credit system of the country to utilize it in its best advantage, and to maintain the reserves. RBI maintains the economic structure of the country so that it can achieve the objective of price stability as well as economic development, because both objectives are diverse in themselves. Banker of Banks RBI also works as a central bank where commercial banks are account holders and can deposit money. RBI maintains banking accounts of all enrolmentd banks. Commercial banks create credit.It is the duty of the RBI to control the credit through the CRR, bank rate and open market operations. As bankers bank, the RBI facilitates the clearing of cheques between the commercial banks and helps inter-bank transfer of funds. It can grant financial accommodation to schedule banks. It acts as the lender of the last resort by providing emergency advances to the banks. It supervises the functioning of the commercial banks and take action against it if need arises. Detection of Fake currency In order to curb the fake currency menace, RBI has launched a website to raise awareness among masses about fake notes in the market. pic pic Policy rates and reserve ratiosBank Rate RBI lends to the commercial banks through its synthesis window to help the banks meet depositors demands and reserve requirements for long term. The reside rate the RBI charges the banks for this purpose is called bank rate. If the RBI wants to increase the liquidity and money supply in the market, it forget decrease the bank rate and if RBI wants to reduce the liquidity and money supply in the system, it get out increase the bank rate. As of 25 June 2012 the bank rate was 8. 0%. latest bank rate is 7. 75% as on 29/01/2013. Reserve requirement cash reserve ratio (CRR) Every commercial bank has to keep certain minimum cash reserves with RBI.Consequent upon amendment to sub-Section 42(1), the Reserve Bank, having regard to the inescapably of securing the monetary stability in the country, RBI can prescribe Cash Reserve Ratio (CRR) for scheduled banks without any traumatize rate or ceiling rate, Befo re the enactment of this amendment, in terms ofSection 42(1) of the RBI Act, the Reserve Bank could prescribe CRR for scheduled banks between 5% and 20% of total of their demand and time liabilities. RBI uses this tool to increase or decrease the reserve requirement depending on whether it wants to effect a decrease or an increase in the money supply. An increase in Cash Reserve Ratio (CRR) leave make it mandatory on the part of the banks to hold a large proportion of their deposits in the form of deposits with the RBI. This will reduce the size of their deposits and they will lend less. This will in turn decrease the money supply. The current rate is 4. 75%. ( As a Reduction in CRR by 0. 25% as on Date- 17 September 2012). -25 basis points cut in Cash ReserveRatio(CRR) on 17 September 2012, It will release Rs 17,000 crore into the system/Market. The RBI displace the CRR by 25 basis points to 4. 25% on 30 October 2012, a move it say would inject about 175 billion rupees into the banking system in order to pre-empt potentially tightening liquidity. The latest CRR as on 29/01/13 is 4% Statutory Liquidity ratio (SLR) Apart from the CRR, banks are required to maintain liquid assets in the form of gold, cash and approved securities. Higher liquidity ratio forces commercial banks to maintain a larger proportion of their resources in liquid form and thus reduces their electrical capacity to grant loans and advances, thus it is an anti-inflationary impact.A higher liquidity ratio diverts the bank funds from loans and advances to investment in government and approved securities. IN OTHER dustup ITS A TOOL SIMILAR TO CRR BUT AT HIGHER ratio In well-developed economies, central banks use open market operations purchasing and selling of eligible securities by central bank in the money marketto influence the volume of cash reserves with commercial banks and thus influence the volume of loans and advances they can make to the commercial and industrial sectors. In the open money market, government securities are traded at market related rates of interest. The RBI is resorting more to open market operations in the more recent years.Generally RBI uses three kinds of selective credit controls 1. tokenish margins for lending against specific securities. 2. Ceiling on the amounts of credit for certain purposes. 3. racist rate of interest charged on certain types of advances. Direct credit controls in India are of three types 1. Part of the interest rate structure i. e. on small savings and provident funds, are administratively set. 2. Banks are mandatory required to keep 23% of their deposits in the form of government securities. 3. Banks are required to lend to the priority sectors to the extent of 40% of their advances. Punjab State Co-Operative Bank pic 1. Introduction picWelcome toThe Punjab State reconciling Bank Ltd. (PSCB) Experience a whole new Era of Banking Technology. Where banking is made easier and convenient for our customers. The Pun jab State conjunctive Bank provides you with the New Generation banking architecture to progress in the succeeding(a) in an evolutionary manner. Punjab State reconciling Bank (PSCB) is customer centric. 2. History The Punjab State reconciling Bank was established on 31st August, 1949 at Shimla vide registration No. 720 has a principle financing institution of the reconciling movement in Punjab. In 1951 its Head Office was shifted to Jalandhar from where it moved in 1963 to its present building at Chandigarh.In the concerted Banking structure, the position of the Punjab State reconciling Bank is extremely important as the whole credit system revolves around it. It has 19 branches and 1 denotation counters in Chandigarh. There are 20 District Central accommodative Banks having 804 branches all over Punjab, mostly in rural areas of the State. 3. Profile THE PUNJAB STATE COOPERATIVE BANK LTD. CHANDIGARH brass section The Punjab State reconciling Bank Chandigarhwas establish ed on 31 August 1949 at shimla vides Registration No. 720 as a principal financing institution of the cooperative movement in the state.It has 19 branches and 1 extension counters in the city of Chandigarh. 20 Central conjunct Banks having 786 branches and 18 backstage Counters in the State of Punjab are affiliated with the bank. In the Cooperative banking structure the position of the Punjab State Coop Bank is extremely important as a the whole petty term credit system revolves around it. This bank ensures that its member central cooperative banks follow sound banking practices and observe strict financial discipline. The Central Cooperative Banks are financing the farmers through PACS at the village Level. There is no arena of life where this postmortem examination institution has not played its part. From a farmer, artisan to traders/businessman, everybody has been covered in the fold of this institution. The green, white and sweet revolutions in the state of Punjab ar e some of the major achievement in which this institution has plays a vital role. The Punjab State Cooperative Bank has already been awarded BEST effect AWARD from NABARD and NAFSCOB. For the year 2003-04, Punjab Cooperative Bank has been selected for NABARDs Best Performance set apart which is based on performance of all the SCBs in the country. in like manner our Jalandhar DCCB has also been selected for NABARDs Best Performance Award out of all the DCCBs in the country for the year 2003-04. OBJECTIVES To serve as a Balancing Centre for Cooperative Societies in the State for Cooperative Societies in the State of Punjab registered under the Punjab Cooperative Societies Ac, 1961 for the time being in force. To promote the economic interest of the member banks and cooperative societies in the state in accordance with cooperative principles and to facilitate the development and funding of any cooperative society registered under the said act. To carry on banking and cred it business. MANAGEMENT The present Board of Directors was constituted in May 2005. Now the management of the bank is being flavor after by the elected BOD. 4.Organization pic 5. Board of Directors SNO Name Designation connection No. Address 1. Sh. Avtar Singh Zira Chairman 0172-5067035 Makhu Road,VPO Zira, S/o Sh. Hari Singh Distt Ferozepure Zira 2. Sh. Milap Singh S/o Director 98147-83077 Khajanewala house,Gobind Nagar,SW Road Sh.Jasbir Singh Amritsar 3. Sh. Gurpreet Singh Director 94172-3778 95, Model Town ,Phase 3 ,Bhatinda Maluka S/o Sh. Sikander Singh Maluka 4. Sh. Baljit Singh Director 97803-00916 VPO Salempur P. O Bras, Bhutta S/o Sh Baldev Distt.Fathegarh Sahib Singh 5. Sh. Ravikiran Singh Director 97804-00002 H. No 649, Basant Avenue, Kahlon S/o Sh. 97819-00001 Amritsar Nirmal Singh Kahlon 6. Sh. Satwinderpal SinghDirector 98761-08332 Village Ramdaspur, Dhat S/o Sh. Mohan The.Dasuha, Singh Distt. Hoshiarpur 7. Sh . Harjit Singh Director 98140-57531 Khothran Road , Parmar S/o Sh. Near J. C. T MillPhagwara , Gurbachan Singh Parmar Kapurthala 8. Sh. Tajinder Singh Director 97806-00019 VPO Mithukhera , Mithukhera S/o Sh. Malot, Gurnam Singh Distt. Muktsar 9. Sh. Dildar Singh S/o Director 95925-83101 Vill. Majra Kalan, P. O. Jadlan , Sh. Ranjit Singh Distt. Nawanshahr 10. Sh. Jarnail Singh S/o Director 97800-32206 VPO Kartarpur, Charaso, Distt. Patiala Sh. Hajara Singh 11. Sh.Baldev Singh S/o Director 94631-47642 VPO Chakla, Chamakaur Sahib, Distt. Ropar Sh. Gurnam Singh 12. Sh. Baljit Singh Director 99889-10417 H. NO. 621, WardNo. 11 , DerraBassi, Distt. Karkaur S/o Sh. Gurdev Mohali Singh 13. Sh. Kanwaljeet Singh Director 97799-15100 H.No 7/250, Shastri Nagar , Batala , Distt. S/o Sh. Raghbir Singh Gurdaspur 14. Sh. Sukhdarshan Singh Director 98765-61261 The Punjab State cooperztive Agriculture Marar, S/o Sh. Narayan Development Bank Ltd. , Se c 17 B , Singh Chandigarh 15. CGM, NABARD 5071431,2604608 Plot No. 3, Sector-34 A , Candigarh. 16. Financial 2742771 Cooperation Dept. Commissioner civilised Sectt , Cooperation, Punjab Punjab Chandigarh 17. Principal Sectary Finance 18. Registrar, 5046814 RCS , Punjab , Cooperative Sector-17 Bays Building , Societies, Punjab Chandigarh 19. Sh. Kamaljeet Singh Managing Director 5061404 Punjab State Coop. Bank Ltd. Sangha PSCB Chandigarh SCO 175-187, Sector-34A, Chandigarh. 6. AWARDS & ACHIEVEMENTS AWARDS The Punjab State Cooperative Bank has already been awarded BEST PERFORMANCE AWARD from NABARD and NAFSCOB. For the year 2003-04, Punjab Cooperative Bank has been selected for NABARDs Best Performance Award which is based on performance of all the SCBs in the country. also our Jalandhar DCCB has also been selected for NABARDs Best Performance Award out of all the DCCBs in the country for the year 2003-04. ACHIEVEMENT S S. T. AGRI.LOAN The Cooperative Banks in the State have move on Rs. 7536. 33 Crores as ST Agri. Loan during the year 2009-10 as compared to Rs. 5894. 28 crore during 2008-09. Similarly during 2010-11, Rs 8497. 15 crores stand disbursed. Against the target of Rs. 8300. 00 Crores. R. C. C. LIMIT During 2009-10 the Central Coop. Banks in Punjab have sanctioned R. C. C limits worth Rs. 2296. 62 croresas compared to Rs. 2091. 75 crore of 2008-09.During the year 2010-11 the bank has sanctioned RCC limits worth Rs. 2460. 79 crore. TWO WHEELER LOANS TO AGRICULTURISTS Under Two Wheeler Loan Scheme the farmers can take loan up to 75% of two-wheelers cost or Rs. 50,000/- whichever is lower from the Central Cooperative Banks. During the year 2009-10, the Bank has advanced a sum of Rs. 32. 67 crore. Similarly, during 2010-11, Rs. 29. 70 crore has been advanced against the target of Rs. 40. 00 crore. HOUSING LOANS During the year 2008-09 Central Cooperative Banks in the State have advanced Rs. 90. 66 Crores against the target of Rs. 80. 00 crores. During 2009-10, Rs. 86. 64 crores has been disbursed against the target of Rs. 110. 00 crore. During 2010-11 Rs. 84. 56 crore has been disbursed . NON FARM SECTOR LOANS During 2008-09 Rs 47. 72 crores were advanced under the scheme by DCCBs in the State of Punjab. During the year 2009-10, Rs. 48. 84 crores has been advanced. Similarly during 2010-11, Rs. 41. 93 crore has been advanced against the target of Rs. 55. 00 crore. LOAN FOR CONSUMER DURABLES UnderConsumer durables Loan Scheme, Rs. 79. 62 croreshas been advanced during 2009-10. Similarly, during 2010-11, Rs. 78. 25 crore has been advanced against the target of Rs. 80. 00 Crores . private LOAN SCHEME Under Personal Loan Scheme, the Bank has advanced Rs. 143. 58 crore during the year 2009-10 against the target of Rs. 125. 00 crore. During 2010-11, Rs. 62. 41 crore has been disbursedagainst the target of Rs. 150. 00 crore. D EPOSIT mobilisation The deposit of Punjab State Coop. Bank and Central Cooperative Banks were Rs. 9819. 09 crores during the year 2009-10. During the year 2010-11 the deposits are Rs. 10684. 54 crore. PROFITS During 2010-11, there was a profit Rs. 65. 17 crore whereas 2 DCCB, namely Faridkot and Mansa were in loss. REDUCTION IN THE RATE OF pursuance Rate of Interest on Crop Loan has been reduced to 7. 00% w. e. f. 01-04-2006. 7. early Planning and Vision Future Perspective Cooperatives are not unmoved(p) by structural adjustments and globalization of commodity market. As a result, Cooperative Banks are required to redesign their strategies for sustainability and growth. The economic reforms initiated by the government of India in 1991 have affected the Financial Institutions ncluding the Cooperative Financial Institutions. These reforms aim at liberalization and deregulation of Indian economy. The Cooperative Banks of Punjab have accepted the reforms in Indian ec onomy, especially, the financial reforms in right spirit. Since these Banks have mainly been providing credit to agriculture sector, changes in agricultural economy affect them more closely. The Banks envisage following scenario as a result of liberalized agricultural policy easiness of agricultural policy would result in greater capital forte and borrowed capital requirements of agriculturists.In order to induce diversification and produce quality products for international market. For this purpose, Punjab farmers would need greater credit support for improved technology, seeds and agro-inputs. Liberalized agricultural policy would reverse the process of fragmentation of land holdings and would result in exodus of employment opportunities from agricultural sector to other sectors of economy. Such as small business enterprises, services and industrial sector. Liberalization of agriculture would change and explicate agriculture, thereby earning a status of industry att racting high skilled professionals in agriculture sector. Liberalized agricultural economy would lead to a greater role of private research and development institutions in improving the productivity and quality of agricultural operations. The liberalized agricultural policy would result in greater draw on value addition in agriculture. Therefore, a great deal of thrust would be on agro-processing units. The liberalized agricultural policy would bring greater thrust on export of raw and value added agro-products. The liberalized agricultural economy would lead to sowing/planting of new crops. Leading to a great deal of crop diversification. With this perspective, the Cooperative Credit Policy, both for short-term and long term requirements of the farmers, needs to be restructured.Accordingly, the Cooperative Banks in the State resolve to abide by credit policy in keeping with the following. Vision ? We will force the future challenges with grit and take every possible st ep for the development of our institution. ? More steps will be taken to provide effectual services. ? Present customers will be retained and other customers will be attracted to increase market share. ? Bank will attract maximum deposit (especially low cost deposit) to strengthen its financial resources so as to reduce its dependency upon NABARD. ? Bank while substituteing its loan portfolio will provide strength term and long term loans to the maximum extent. Every effort will be made to open account of all the farmers of the State. Bank will receive deposits from Farmers and meet all their credit needs. ? Bank, for the sake of development of State, will strive hard to provide maximum and better services to customers especially farmers and for this wherever necessary, every effort will be made to modify the schemes. ? Bank will prepare its business plan every year and by implementing it, goals set will be achieved. ? Bank will professionalize and modernize the business. 8. Tra ining Center pic Introduction Agriculturecooperative mental efficiency Training Institute in the State of Punjab was established in 1986 by the Punjab State Cooperative Bank Ltd.With the Financial assistance from National Cooperative Development Corporation Under World Bank NCDC Project. The main aim of setting up this institute was to provide training to the rung and committee members as well as education to the ordinary members of the Primary countrified Services Societies (PACS) during the project period of 5 years. After successfully climax of the Project the institute started catering to the training needs of the whole short term credit cooperative in Punjab particularly cooperative banks from 2001. The institute is ladder various training programmed for different categories of staff of cooperative bank.The Punjab State Cooperative Bank is giving high priority for the training of its staff as well as staff of its member banks. The institute is getting full support from th e bank in the field of training. The institute is acting for the development of a cadre of professional bankers to meet the challenges of changing banking scenario. Since 1991, there has been wondrous change in banking sector which had affected cooperative bank to a great extent. The Tara pore Committee, Narsimham Committee and Vaidyanathan Committee recommendations have put scholarly challenges to cooperative banks. The technological changes in the banking sector are also change these banks.This institute is aware of these transformations and has geared up its training plans. The training institute of Cooperative banks cannot remain passive but must play an active role in providing consultancy, latest knowledge and skills to cooperative banks. Acting as a catalyst in the change process, this institute has decided to diversify its activities to face the challenge of time. Objective ? Sensitizing the banks of the challenges ahead and to prepare the employees to meet these challenge s ? modify the operational efficiency of cooperative bank. ? Building up the managerial and leadership abilities among the officers for organizational effectiveness. TRAINING NEEDS ASSESSMENTThis institute assesses the training needs of the staff in the following ways. 1. Anticipation of the latest Development Latest developments in economic and banking sectors (Capital Adequacy Norms, Asset Liability Management, Prudential Norms, and Recommendation of various Committees) are considered as Training requirement. 2. Demand from Central Cooperative Banks miscellaneous central cooperative banks at different occasions approach the institute to provide training to their staff in specific area. On the request of those banks the institute conducts field programmers as per the convenience of the client banks. 3. Policy matters of Management The institute keeps in touch with the olicy decision of the Reserve Bank of India, NABARD central Government RCS and Apex Bank Management, Institute d evelops and organizes training programmed for effectives implementation of these decisions. 4. susceptibility Members Visit Faculty member of this institute frequently visit cooperative banks at different intervals to study operational problems of the banks and to identify the training needs of the staff. 5. Audit Reports and Inspection Reports These reports do provide useful indication for the training needs in banks. We continuously study these reports to find out adjective gaps and problems of the banks. COURSE DESIGN The training programmers are designed by conducting a critical analysis of training needs of Bank Staff.Each member of faculty is advised to design at least two training programmers in a year. The training programmed along with detailed course contents vigilant by them is then discussed in a faculty meeting. In this meeting the members of faculty meeting. In this meeting the members of faculty share thei