banking presentation new
TRANSCRIPT
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Sectoral
Presentationon
BankingPresented Byaideep Bakre
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AgendaGENDA
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Bank: Establishment authorized by a government to:
accept deposits pay interest clear checks
make loans act as an intermediary in financial transactions provide other financial services to its customers.
What is a Bank?
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uled Commercial BanksCoopera
tive Credit InstitutionsAll India
Financial InstitutionsState Fi
nancial InstitutionsOt
her Institutio
Private Sector Banks (22)e
ctor Banks (27) Foreign Banks (31)
RRBs (84)Urban Cooperative Banks (1721)Rural Coope
rative Cre
: , , . . . ,Source Report on trend and progress of banking in India 2008 09 RBI website www rbi org in accessed on,January 12 2010
Structure of Indian Banks
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RBI
Role of Reserve Bank of India
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Scheduled Banks in India constitute those banks which
have been included in the Second Schedule of ReserveBank of India(RBI) Act, 1934. RBI in turn includes onlythose banks in this schedule which satisfy the criterialaid down vide section 42 (6) (a) of the Act.
The banks included in this schedule list should fulfil twoconditions.
The paid capital and collected funds of bankshould not be less than Rs. 5 lakhs.
Any activity of the bank will not adversely affectthe interests of depositors.
Every Scheduled bank enjoys the following facilities.
Such bank becomes eligible for debts/loans onbank rate from the RBI.
Scheduled Banks
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Market Overview
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: Source Report on trend and progress of banking in India , , . . . ,2008 09 RBI website www rbi org in accessed on January
,12 2010
Market Overview
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Revenues
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:Source RBI Website
Profit
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:Source RBI Website
( . )Business per employee in Rs Lakhs
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:Source RBI Website
( . )Profit per employee in Rs Lakhs
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: Source Report on trend and progress of banking in India
, , . . . ,2008 09 RBI website www rbi org in accessed on January,12 2010
Gradual Shift
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Key Trends in Banking
d k
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Key Trends in Banking
M d A i i i
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Date of
Merger
Acquirer
Bank
Target Bank Assets of
Target bankas a % ofAcquiringBanksAssets
Number of
Branches ofTarget Bank
Feb 2008 HDFC Bank CenturionBank of
Punjab
20 394
August 2007 CenturionBank ofPunjab
Lord KrishnaBank
11 110
April 2007 ICICI Bank Sangli Bank 0.5 190
March 2007 Indian
OverseasBank
Bharat
OverseasBank
6 102
October2006
IDBI UnitedWesternBank
8 230
September2006
Federal BankGanesh Bankof
Kurundwad
1 32
: ,Source Statistical tables relating to banks of India 1979 2007 6,May 2008
Mergers and Acquisitions
O i i
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Retail Banking
Corporate Banking
Growing MSME Sector
Microfinance
Fierce Competition in Urban Areas
46000 Branches in Rural and SemiUrban Areas
Growing Long Term FundRequirements
Remittance
US$ 45 Billion in 2008: : , ,So urce N R Im arket the po ten tial EY C en ter for B usine ss K no w led ge A pril2 0 0 9
Opportunities
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M t d C dit P li R t
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Bank rate (or Discount rate): It is the rate of interest which a central bankcharges on the loans and advances that it extends to commercial banksand other financial intermediaries.
Repo Rate: Whenever the banks have any shortage of funds they can borrowit from RBI. Repo rate is the rate at which our banks borrow rupees fromRBI. A reduction in the repo rate will help banks to get money at a cheaper
rate. When the repo rate increases borrowing from RBI becomes moreexpensive.
Reverse Repo Rate:The rate at which Reserve Bank of India (RBI) borrowsmoney from banks. Banks are always happy to lend money to RBI sincetheir money are in safe hands with a good interest. An increase in Reverserepo rate can cause the banks to transfer more funds to RBI due to thisattractive interest rates. It can cause the money to be drawn out of the
banking system.Cash reserve Ratio: It is the amount of funds that the banks have to keep
with RBI. If RBI decides to increase the percent of this, the availableamount with the banks comes down. RBI is using this method (increase ofCRR rate), to drain out the excessive money from the banks
Statutory Liquidity Ratio: It is the amount a commercial bank needs to
maintain in the form of cash, or gold or govt. approved securities (Bonds)before providing credit to its customers. SLR rate is determined and
Monetary and Credit Policy Rates
C t V l
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Policy Rates
Bank Rate: 6%
Repo Rate: 5.75%
Reverse Repo Rate: 4.5%
Reserve Ratio
Cash Reserve Ratio: 6%
Statutory Liquidity Ratio: 25%
Current Values
G D ti P d t
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Gross Domestic Product (GDP)- is ameasure of a country's overallofficial economic output. It is the
market value of all final goods andservices officially made within theborders of a country in a year
GDP (Y) is a sum ofConsumption(C), Investment (I), GovernmentSpending (G) and Net Exports (X -M).
Y= C + I + G + (X M)
Gross Domestic Product
GDP G th R t D d
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GDP Growth Rate over a Decade
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