Banking in India-overview

BANKING IN INDIA-OVERVIEW

RESERVE BANK SUPERVISION
‡ -SCHEDULED BANKS (SECOND SCHEDULE)
± NON-SCHEDULED BANKS ± COOPERATIVE BANKS ± REGIONAL RURAL BANKS (60%GOI+20%SPONSORING PSB+20%STATE GOVT=1CR ISSUED CAPITAL) ± FOREIGN BANKS

DEVELOPMENT BANKS
‡ NABARD (NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT) ‡ SIDBI(SMALL IND DEV BANK OF INDIA) ‡ IFCI(INDUSTRIAL FINANCE CORPN OF INDIA) ‡ .IRBI(INDUSTRIAL RECONSTRUCTON BANK OF INDIA) ‡ .EXIM BANK(EXPORT-IMPORT BANK OF INDIA) ‡ .NHB(NATIONAL HOUSING BANK)

BANKING IN INDIA
‡ BANKING REGULATION ACT1949‡ -------------PERMITTED BUSINESS-----------‡ MAIN BUSINESS =DEPOSITS(BORROWING FROM PUBLIC)--ADVANCES(LENDING TO PUBLILC ‡ -BULLION SELLING AND BUYING-SAFE DEPOSIT LOCKERS-CUSTODY OF DOCUMENTS‡ COLLECTION AND TRANSFER OF MONEY AND SECURITIES ‡ AUTHORISED DEALERS HIP IN FOREIGN EXCHANGE ‡ DEALING IN NEGOTIABLE INSTRUMENTS(BILLS OF EXCHANGE/CHEQUES/DRAFTS/) ‡ DEALING IN DOCUMENTS OF TITLE TO GOODS(RAILWAY RECEIPTS/BILL OF LADING/LORRY RECEIPTS) ‡ DEALING IN SHARES AND WARRANTS /DIVIDENDS/DEBENTURES/BONDS/ ‡ LETTERS OF CREDIT(DOMESTIC AND FOREIGN)

BANKING IN INDIA
SCHEDULED BANKS-285 Private sector30---public sector30-foreign31 RRB86-LOCAL AREA BANKS4COOP BANKS ---------------------PRIMARY COOP CREDIT SOCIETY ---CENTRAL COOP BANKS---STATE COOP BANKS-STATE COOP BANKS31 ‡ URBANCOOP BANKS1721---LAND DEV BANKS ‡ ‡ ‡ ‡ ‡

BANKING IN INDIA
‡ SUBSIDIARY BUSINESS-----------------------------‡ ---------------ANY AGENCY FUNCTIONS ON BEHALF OF CUSTOMERS AND GOVT/TRUSTEE RELATIONSHIP/GUARANTEES/INDEMNITIES ‡ ACQUIRING AND DEALING ANY PROPERTY TAKEN AS SECURITY ‡ EXECUTION OF WILLS AND ADMINISTRATION OF ESTATES ‡ ANY OTHER BUSINESS NOTIFIED BY CENTRAL GOVT

BANKING IN INDIA
--__PROHIBITED BUSINESS----------------TRADING IN PROPERTY/SHARES NOT TO HOLD SHARES IN OTHER COMPANIES EXCEEDING 30%OF PAID UP CAPITAL OF THE COMPANY OR ITS OWN CAPITAL WHICH EVER IS LESS ‡ GIVING LOANS AND ADVANCES AGAINST ITS OWN SHARES ‡ ‡ ‡ ‡

BANKING IN INDIA
‡ PROHIBITED ACTS ‡ ===========NO UNSECURED ADVANCES TO DIRECTORS OR INTERESTED COMPANIES ‡ NO ADVANCES VIOLATINGRBI SEC 20 CREDIT POLICY ‡ NO FLOATING CHARGES AGAINST ITS OWN PROPERTY

BANKING IN INDIA
‡ LICENCING POLICY FOR BANKS ‡ MIN.100CRORES(proposed500cr) ‡ SEC22----CAPACITY OF PROMOTERS TO REPAY DEPOSITS-CREDIBLE IMAGE ‡ LICENCING OF BRANCHES-LOCATION / ‡ ADEQUATE CAPITAL CAR8%-‡ NPA LESS THAN 15%OF NET OWNED FUNDS OF MIN 100CR ‡ NEW POLICY-INDUSTRIAL HOUSES/NBFCs ‡ ------TAKING OVER OF RRBs

BANKING IN INDIA
‡ ‡ ‡ ‡ ‡ ‡ ‡ RBI DIRECTIVES ON LENDING--------------------------------------------------PURPOSE ---------------------------------------MARGIN ----------------------------------------MAX.AMOUNT -----------------------------------------INTEREST SELECTIVE CREDIT CONTROL ---------sensitive commodities-(credit rationing/margin increase/hiking interest

BANKING IN INDIA
‡ R B I POWERS UNDER BNKG REG ACT
‡ ‡ ‡ ‡ ----LICENCING ----CREDIT POLICY ----DIRECTIVES ON ALL BUSINESS SERVICES/CUSTOMER GRIEVANCE REDRESSAL CONTROL MANAGEMENT/APPOINTMENT/SUPERCEDING BOARD/PROHIBIT EXPOSURE/ADVISE AND APPROVE AMALGAMATIONS BEFORE SANCTIONING BY HIGH COURT/SEEKING PERIODICAL RETURNS ON STATUS OF ASSETS AND LIABILITIES /IMPOSING PENALTIES FOR NON-COMPLIANCE MORATORIUM-on banks detrimental to depositors interest-on run-apply to central govtAPPOINT LIQUIDATOR- After sanction by high court ADVISING CENTRAL GOVT ON LEGISLATIONS REGDG BANKING

‡ ‡ ‡

‡ CENTRAL GOVT POWERS UNDER BR ACT ‡ -----------/MORATORIUM/ACQUISITION/ IN DEPOSITORS AND NATIONAL INTEREST AFTER PAYMENT OF COMPENSATION-5TH SCH

BANKING IN INDIA
‡ WINDING UP OF A BANKING COMP.
‡ -COMPULSORILY INTERVENTION OF RBI ‡ VOLUNTARILY------INABILITY TO PAY LIABILITIES INCLDG DEPOSITS ‡ SUBJECT TO SUPERVISION OF COURTS

‡ INTERVENTION OF RBI
‡ ---when continuance is prejudicial to depositors interests/statutory returns not submitted/unable to pay debts(within two working days at its offfice or five days at other places as per BR ACT)

BANKING IN INDIA
‡ AMALGAMATION OF BANKS-BR ACT
‡ DRAFT TO BE PASSED BY RESOLUTION OF TWO THIRDS MAJORITY BY SHAREHOLDERS OF EACH BANK(ONLY AFTER SERVING DUE NOTICE TO SHAREHOLDERS AND PUBLICATION IN TWO NEWS PAPERS FOR THREE CONSECUTIVE WEEEKS) ‡ ---DISSENTING SHAREHOLDERS COMPENSATED AS PER RBI ADVICE ‡ RBI APPROVAL ANDTRANSFER OF ASSETS AND LIABILITIES TO ABSORBING COMP. NOTIFICATION OF RBI=DISSOLUTION OF OLD BANK ORDER SENT TO REG OF COMP

E-BANKING EVOLUTION
‡ TELE BANKING ‡ ONLINE BANKING ‡ MOBILE BANKING ‡ AUTOMATED TELLER MACHINE ‡ BANKING(ATM) ‡ CORE BANKING SOLUTIONS(CBS)

CORE BANKING-CCS
‡ A CENTRALISED BRANCH COMPUTERISATION MODEL WHERE BRANCHES ARE CONNECTED TO A CENTRAL HOST ‡ ONLINE MULTIPLE DELIVERY CHANNELS-ATM DEBITCARDS/MOBILE BANKING /INTERNET BANKING ‡ ANY BRANCH BANKING ‡ MODULES OF BUSINESS INTELLIGENCE ‡ INTERFACE WITH ELECTRONIC PAYMENT SYSTEMS

ELECTRONIC PAYMENT SYSTEMS
‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ AUTOMATED TELLER MACHINES ONLINE/OFFLINE/STAND ALONE /NETWORKED CASH DISPENCERS ATM CUSTOMER INTER- FACE VIDEO DISPLAY MONITOR KEY BOARDTOUCH SCREEN SLOTS-CARD READER/CASH DEPOSIT/CASH DISPENSER/ENVELOPE DISPENSER

E-PAYMENTS
‡ TRUNCATED CHEQUES ‡ TRUNCATED IN CLEARING CYCLE BY CLEARING HOUSE OR BANK TO REPLACE A PHYSICAL CHQ WITH ELECTRONIC IMAGE ‡ ELECTRONIC CHEQUES ‡ -- EXACT MIRROR IMAGE OF PAPER CHEQUE SIGNED BY DIGITAL SIGNATURE AS PER IT ACT ‡ OR BIO METRICS ‡ M-CHQS ‡ MOBILE TO MOBILE WITH SIM CARD IN SECURED FORMAT ‡ RTGS(REAL TIME GROSS SETTLEMENT) ‡ OPERATED BY RBI IMMEDIATE SETTLEMENT BY DEBITING AND CREDITING INTER BANK TRANSACTIONS ‡