RECENT TRENDS IN BANKING INDUSTRY IN INDIA IntroductionThe Indian Banking Industry is governed by the Banking Regulation Act of India, 1949. As a whole India has now a far more developed and integrated banking system with large number of banks in the country.1) Structure of Banking Industry in India Banking industry in India is classified into scheduled and Non-scheduled banks. Scheduled banks consist of State Co-operative banks and Commercial banks. The non-scheduled banks consist of Central Co-operative banks and primary credit societies and commercial banks.2) Public sector banks in India The public sector banks consist of SBI and its associated banks, nationalized banks including IDBI and Regional Rural Banks. By 2012 there were 26public sector banks with 84,546 branches out of which 41.1% were rural branches consisting of State Bank of India and its 6 associated banks, 19 nationalized banks and IDBI Ltd. Public sector banks are the mainstay of the Indian Banking System. On account of many measures taken by the government the capital adequacy ratio of public sector banks has risen from 11.2% in 2001 to 13.1% by Basel II. Similarly the asset quality as shown by level of NPAs has improved. 3) Private sector Banks in India.The private sector banks consists of 14 old and 7 new the private sector banks with 13,667 branches with 11.8% rural branches by 2012. The capital adequacy ratio of old private sector banks has risen from12.5% during Basel I to 14.1% during Basel II and that of new private sector banks have risen from 14.9% to 16.7% . 4) Foreign banks operations in India:As at end June 2012, 41 foreign banks of 24 countries were operating in India with 323 branches with 2.2% rural branches. The capital adequacy ratio of foreign banks in India was 17.3 % during Basel I and 16.7% during Basel II.

5) Regional Rural Banks : The origin of RRBs can be traced back to the promulgation of RRB Act of 1976.They are established with the specific objective of providing credit and deposits facilities particularly to the small and marginal farmers , agricultural laborers and artisans and small entrepreneurs. The RRBs have the responsibility to develop agriculture, trade, comers and industry in the rural areas. In 2009-10 there were 82 RRBs. 6) Indian Banks Operation Abroad: Indian banks continued to expand their presence overseas. Indian banks undertake overseas operations through branches, subsidiaries, representatives offices and joint venture banks. The overseas operations of Indian banks have risen to 250 in 2011-12 to with 215 public sector and 35 private sector banks. 7) Local Area banks.The local area banks (LABs) Scheme was introduced in august 1996. The objective behind setting up of new private local banks was to help the mobilization of rural saving by local institutions and make them available for investments in local areas. There were 4 local area banks in the country at end march 2010.8) Priority sector landing:Domestic scheduled commercial banks, both public and private sectors, are required to meet a target of 40 percent of their adjusted net bank credit for lending to the priority sector. Foreign banks having offices in India target for lending to the priority sector is 32 % of Adjusted Net Bank Credit. Within this target, the advances to micro and small enterprises and export sectors should be 10 % and 12% of the ANBC respectively. 9) Overall performance of the banking industry:The balance sheets of scheduled commercial banks (SCBs) in India remained robust against the backdrop of global financial crisis. The consolidated balance sheets of SCBs increased by 21.2 percent as at end March 2009 as compared with 25 % in previous year. While the balance sheet of public sector banks maintained their growth momentum, the private sector banks and foreign banks registered a deceleration in growth rate in 2008. However in 2009 10 there was slowdown in the growth of balance sheet of public sector banks, old private sector banks and foreign banks. 10) Use of technology in banks:The banks in India are using information technology not only to improve their own internal processes but also to increase facilities and services to their customers. The proportion of public sector banks branches which achieved full computerization increased from 93.7 % as at end march 2008 to 97.8 % as at end of March. More and more ATMs are installed in the country.11) No frills Accounts:In order to provide financial inclusion , the RBI advised all banks in November 2005 to make available a basic banking no frills account either with nil or low minimum balances as well as charges. The number of no frills account opened by SCBs has risen from 67.3 lakhs at end of March 2007 to 330.2 lakhs as at end of March 2009.12) Introduction of base rate system of interest rates:RBI introduced the system of base rate since July 1, 2010. Base rate includes all those elements of the lending rates that are common across all categories of borrowers. The actual lending rate charged to borrowers would be the base rate plus borrowers specific charges. Conclusion: as whole India as now a far more developed and integrated banking system with large number of banks in the country.