CBR on SBI.docx - COMPANY - 3 INTRODUCTION TO BANKING...

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COMPANY - 3INTRODUCTION TO BANKING INDUSTRYINTRODUCTIONIndia's banking sector is sufficiently capitalized and well-regulated according tothe Reserve Bank of India (RBI). The nation's political and economic conditionsare far superior to any other democracy on the planet. Studies on credit, market andliquidity risk suggest that Indian banks are generally resilient and have wellresisted the global downturn.Recently, Indian banking industry has seen the roll out of creative banking modelssuch as payments and small finance banks. RBI's new steps could go a long way inhelping the domestic banking industry restructure.India's digital payments system has evolved the most among 25 countries withIndia's Immediate Payment Service (IMPS) being the only system in the FasterPayments Innovation Index (FPII) at level five.MARKET SIZEIn addition to cooperative credit institutions, the Indian banking system iscomposed of 20 public sector banks, 22 private sector banks, 44 internationalbanks, 44 national rural banks, 1,542 urban cooperative banks and 94,384 ruralcooperative banks. As of January 31, 2020, India's total number of ATMs rose to210,263, and is further expected to rise to 407,000 by 2021.In FY19, the assets of the public sector banks stood at Rs 72.59 lakh crore (US$1.038.76 billion).Lending off-take grew at a CAGR of 13.93 per cent during FY16-FY20. As ofFY20, total extended credit rose to 1,936.29 billion US dollars.SOME RECENT DEVELOPMENTSIn March 2020, State Bank of India (SBI), India’s largest lender, raised US$100 million in green bonds through private placement.1
In February 2020, the Cabinet Committee on Economic Affairs approved thecontinuation of the recapitalization cycle for Regional Rural Banks (RRBs)through the provision of minimum regulatory capital to RRBs for a furtheryear after 2019-20 – until 2020-21 for those RRBs that are unable to sustaina minimum Capital to Risk Weighted Assets Ratio (CRAR) of 9% incompliance with regulatory standards.Allahabad Bank’s board approved the merger with Indian bank for theconsolidation of 10 state-run banks into the large-scale lenders.INVESTMENT/DEVELOPMENTSIn February 2020, the Cabinet Committee on Economic Affairs approved thecontinuation of the recapitalization cycle for Regional Rural Banks (RRBs)through the provision of minimum regulatory capital to RRBs for a furtheryear after 2019-20 – until 2020-21 for those RRBs that are unable to sustaina minimum Capital to Risk Weighted Assets Ratio (CRAR) of 9% incompliance with regulatory standards.ACHIEVEMENTS OF THE GOVERNMENTAccording to RBI, as of April 19, 2020, India's foreign exchange reservestood at about US$ 414.14 billion.To boost connectivity in the villages, National Bank for Agriculture andRural Development (NABARD) has approved 204,000 Point of Sale (PoS)terminals from the Financial Inclusion Fund.

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