Topic 7.pptx - Banks Bank Management Definitions Banking...

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Banks & Bank Management
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Definitions Banking Banking Regulation Act of India defines banking as ‘the accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise and withdrawable by cheque, draft, order or otherwise.’ Banks Banks are defined as ‘any company that transacts the business of banks in India.’
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Functions of Banks 1. Accepting deposits 2. Lending of funds 3. Credit creation 4. Ancillary functions Ancillary services include transfer of funds, collection, foreign exchange transactions, safe deposit locker, gift cheques and merchant banking
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An Overview of the Indian Scheduled Commercial Banks Public sector banks (28) State Bank of India and its Associates Nationalized banks Private sector banks (23) Old Private Sector Banks New Private Sector Banks Foreign banks in India (40) Regional Rural Banks (56)
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Public Sector Banks: Nationalization Phase – I State Bank of India SB of Bikaner and Jaipur SB of Hyderabad SB of Mysore SB of Patiala and SB of Travancore Phase – II : 14 Banks were nationalized in 1969 Phase – III: 6 Banks were nationalized in 1980
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Private Sector Banks Old Private Sector Banks New Private Sector Banks City Union Bank Axis Bank Dhanlaxmi Bank Development Credit Bank Federal Bank HDFC Bank Kotak Mahindra Bank ICICI Bank Jammu & Kashmir Bank Indusind Bank Karantaka Bank Yes Bank Karur Vysya Bank Bandhan Bank Lakshmi Vilas Bank IDFC Nainital Bank Ratnakar Bank South Indian Bank Tamilnad Mercantile Bank Catholic Syrian Bank
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SBI Mkt. Cap. Full(Cr.) 2,15,683.30 Mkt. Cap. F F(Cr.) 79,802.82 HDFC Bank Mkt. Cap. Full(Cr.) 3,56,803.72 Mkt. Cap. F F(Cr.) 2,64,034.75 ICICI Bank Mkt. Cap. Full(Cr.) 1,65,608.94 Mkt. Cap. F F(Cr.) 1,65,608.94 Axis Bank Mkt. Cap. Full(Cr.) 1,26,223.45 Mkt. Cap. F F(Cr.) 82,045.24 PNB Mkt. Cap. Full(Cr.) 29,876.67 Mkt. Cap. F F(Cr.) 11,353.14
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Foreign Banks Some foreign banks are operating for more than a century, e.g. ANZ Grindlays and Standard Chartered. A total of 27 new foreign banks opened their branches in India following the liberalization of the 1990s. For a foreign bank to operate in India the minimum capital requirement is USD 25 million spread over three branches. Additional branches are permitted after observing the performance of the existing branches. The number of licenses is fixed at 12 per year for both new and expansion by existing banks. They have to mandatorily lend 32 per cent of their adjusted net bank credit (i.e. net bank credit plus investment in non-SLR bonds) or credit equivalent of the off balance sheet exposures, whichever is higher, to the priority sector. Foreign banks need to park 20 per cent of their profits from India operations with the RBI in terms of cash, or approved securities or both. Standard Chartered is the undisputed leader among the foreign banks with more than 90 branches and assets over more than Rs 30,000 crores, followed by Citibank which is a distant second.
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