Download - Banking Industry Tufail Khan
-
7/30/2019 Banking Industry Tufail Khan
1/66
-
7/30/2019 Banking Industry Tufail Khan
2/66
Banking means the accepting, for the purpose of
lending or investment, of deposits of money fromthe public, repayable on demand or otherwise,and withdrawal by cheque, draft, order orotherwise.
"Banking organization" means any org. whichtransacts the business of banking in India.
Explanation: Any company which is engaged in the
manufacture of goods or carries on any trade and whichaccepts the deposits of money from public merely for thepurpose of financing its business as such manufacturer ortrader shall not be deemed to transact the business ofbanking within the meaning of this clause."
-
7/30/2019 Banking Industry Tufail Khan
3/66
PRESENTATION PATH
History of banking in India
Nationalization of Banks in India
Scheduled Commercial Banks in India
Global scenario
Technology in banks
Current position of banking in India
Services by banks
Central bank of India
-
7/30/2019 Banking Industry Tufail Khan
4/66
GLOBAL SCENARIO
Growing sector Largest bank=city group
Tier 1 capital =$74billion
Assets = $1484billion
Number of banks=1569
1st country in banking=
http://en.wikipedia.org/wiki/Image:Citibank_Chinatown.jpghttp://en.wikipedia.org/wiki/Image:Citibank_Chinatown.jpg -
7/30/2019 Banking Industry Tufail Khan
5/66
The first bank in India was established in 1786. From 1786 till today,the journey of Indian Banking System can be segregated into threedistinct phases. They are as mentioned below:
Early phase -- from 1786 to 1969
From 1969 to 1991
New phase of Indian Banking System (IndianFinancial & Banking Sector Reforms after 1991. )
-
7/30/2019 Banking Industry Tufail Khan
6/66
* The General Bank of India was set up in the year 1786.
* The East India Company established Bank of Bengal(1809), Bankof Bombay (1840) & Bank of Madras (1843)
* In 1865 Allahabad Bank was established and first timeexclusively by Indians.
* Punjab National Bank Ltd. was set up in 1894 with headquartersat Lahore.
* Reserve Bank of India came in 1935.
IBA was formed on the 26th September, 1946 with 22 members.functioning of IBA To promote sound & progressive bankingpractices
* 1949 : Enactment of Banking Regulation Act.
1955 : Nationalization of SBI
1959 : Nationalization of SBI subsidiaries.*
-
7/30/2019 Banking Industry Tufail Khan
7/66
It formed SBI to act as the principal agent of RBI and tohandle banking transactions of the Union and State Govt. allover the country.
14 major commercial banks in the country was nationalized.
It was the effort of the then PM of India, Mrs. Indira Gandhi.
2nd phase of nationalization Indian Banking Sector Reformwas carried out in 1980 with 6 more banks(having asset of200 crore).
This step brought 80% of the banking segment under Govt.ownership.
-
7/30/2019 Banking Industry Tufail Khan
8/66
The following are the steps taken by the Govt. of India toRegulate Banking Institutions in the Country:
1975 : Creation of regional rural banks.1980 : Nationalization of 7 banks with deposits over 200
crore
After the nationalization of banks, the branches of the PSBIndia rose to approximately 800% and advances took a huge
jump by 11,000%
Banking in the sunshine of Govt. ownership gave the publicimplicit faith and immense confidence about thesustainability of these institutions.
-
7/30/2019 Banking Industry Tufail Khan
9/66
Under the chairmanship of M Narasimham, a committee was set up which
worked for the LIBERALIZATION of banking practices.
1993____guidelines for setting private banks are issued
1994____UTI(axis) received license to 1st private sector bank
1994____RBI issue guidelines regarding CAR(capital adeq.)
1994____OBC become 1st nationalized bank to access capital mkt. To raisefund(387.24 crore)
-
7/30/2019 Banking Industry Tufail Khan
10/66
TECHNOLOGY DEVELOPMENT IN NEW PHASE
The country is flooded with foreign banks & theirATM stations.
Customer oriented services
Centralized computer tech . (became moreconvenient and swift.)
Phone Banking , Net Banking & plastic money isintroduced.
Merchandised banking concept and NEFT
-
7/30/2019 Banking Industry Tufail Khan
11/66
Pervasive Branch
Network
Mass Transaction
& Items Processing
Global Operations
Complex Credit
Calculations
Why technology in banks
-
7/30/2019 Banking Industry Tufail Khan
12/66
Benefits of Technology
Increased operational efficiency, profitability &productivity
Superior customer service
Multi-channel, real-time transaction processing
Better cross-selling ability
Improved management and accountability
Efficient NPA and risk management
Minimal transaction costs
-
7/30/2019 Banking Industry Tufail Khan
13/66
Core
Banking (CBS)
ATMs
Card
Management
Any BranchBanking
DocumentManagement
Risk
Management
Resource
Management
MIS &
Intranet
Corporate
Network
Electronic
Banking
BANKS BUSINESS
RAI
SINGD
EP
OSITS
LOANS&
MISC.SE
RVICES
BANKS BUSINESS
-
7/30/2019 Banking Industry Tufail Khan
14/66
Payments by credit card
TYPE 2004 2005 2006 2007
CREDITCARD
17663 25666 33886 41361
DEBITCARD
---- --- 5897 8172
Total number of transaction in 2006-07=2297.13 lack
-
7/30/2019 Banking Industry Tufail Khan
15/66
NATIONALIZATION is act of taking an industry into the
public ownership of a national govt. by acquiring their sharesor stock or control by any other way.
1955 : Nationalization of SBI1959 : Nationalization of SBI 7 subsidiaries
.
.
1969 : Nationalization of 14 banks1980 : Nationalization of 6 other banks(15/4/80)
OBJECTIVE OF NATIONALIZATION
Provide strengthen to banking system as well aseconomy
Increase public confidence
Secure public fund
Equal availability in different area
-
7/30/2019 Banking Industry Tufail Khan
16/66
Distribution of branches
year No. of branches
of commercial
banks
No. of branches in
rural sector
% of total
branches
1969 8262 1833 22.13%
1980 32419 15105 46.59
1991 60220 35206 58.46
2001 65933 32547 49.36
2006 69417 30750 44.30
-
7/30/2019 Banking Industry Tufail Khan
17/66
The commercial banking structure in India consists of: SCHEDULED COMMERCIAL BANKS UNSCHEDULED BANKS
SCHEDULED BANKS constitute those banks which havebeen included in the Second Schedule of RBI Act-1934. RBIin turn includes only those banks in this schedule whichsatisfy the criteria laid down vide section 42 (6) (a) of the
Act.
Total number of scheduled bank in India=198
-
7/30/2019 Banking Industry Tufail Khan
18/66
ACCORDING TO OWNERSHIP & /OR NATURE OF OPERATION
(i)SBI & its associates(ii) Nationalized Banks,
(iii) Regional Rural Banks
(iv) Foreign Banks(v) Other Indian Sh. Commercial Banks (in the private
sector).
Scheduled Co-operative Banks
Scheduled State Co-operative Banks
Scheduled Urban Co-operative Banks
-
7/30/2019 Banking Industry Tufail Khan
19/66
year credit
1970-71 10.3
1980-81 17.6
1990-91 20.5
2000-01 24.2
2004-05 35.3
2005-06 42.7
-
7/30/2019 Banking Industry Tufail Khan
20/66
-
7/30/2019 Banking Industry Tufail Khan
21/66
AGGREGATE DEPOSITS VS. GDP
-
7/30/2019 Banking Industry Tufail Khan
22/66
COMMERCIAL BANKS
Year
1999 89
2000 298
2001 300
2002 297
2003 292
2004 290
2005 289
2006 222
Year deposits GROWTH
RATE
1999 722203
2000 85159317.91602
2001 98914116.15185
2002 113118814.36064
2003 1311761
15.96313
2004 150441614.68675
2005 170019813.01382
2006 210904924.04726
-
7/30/2019 Banking Industry Tufail Khan
23/66
CURRENT SITUATION ACCORDING TO A REPORT BY ICRA LIMITED, 88 scheduled commercial banks
28 public sector banks 29 private banks (no govt stake; they may be publicly
listed and traded on stock exchanges)
31 foreign banks,
Combined network of over 69,000 branches &17,000 ATMs
the PSBs hold over 75 % of total assets of thebanking industry,
the private & foreign banks holding 18.2% & 6.5% oftotal assets respectively
Over 18500 branches of 53 bank having NEFT tech.
SBI l t i l b k
-
7/30/2019 Banking Industry Tufail Khan
24/66
SBI largest commercial bank
ICICI 2nd largest commercial bank
Nationalized bank having 2.8 lack employees,over 9 lack in schedule banks
Contribution in GDP =35%
Growth of banking sector=15-17%
FDI in public sector bank=24%
FDI in private sector bank=74%
CAR require to maintain=9%
The overall level of NPLS around rs. 1,20,000
crore. 50,000 crore on account of thecorporate sector, the rest by the rural and
cooperative sector.
-
7/30/2019 Banking Industry Tufail Khan
25/66
Standard Chartered Bank, Citibank & HSBC are the top 3 foreign banksin India with more than 65% of the total assets of foreign banks
Most global players in banking & financial services - Morgan Stanley,
Merrill Lynch, JP Morgan, Deutsche Bank, UBS, ABN Amro, Barclays,Calyon etc. - are in India
5 largest bank of India include SBI, ICICI, PNB, CANARA BNAK, BANKOF INDIA (basis of assets)
In top 1000 India has 20 representatives SBI=82
ICICI=268
PNB=313
CANARA BNAK=425 BANK OF INDIA=477
SBI 6.4*SBICHINABANK
-
7/30/2019 Banking Industry Tufail Khan
26/66
1. Private Sector Banks:Not more then 10%of the total voting rights
2. Nationalized Banks:Not more than 1%
ofthe total voting rights
3. SBI: Not more than 10% of the issued
capital.
4. SBI Associates :Not more than 1%.
-
7/30/2019 Banking Industry Tufail Khan
27/66
FOREIGN BANKS GOING TO SET UP BUSINESS ININDIA Royal Bank of Scotland
Switzerland's UBS
US-based GE Capital
Credit Suisse Group
Industrial and Commercial Bank of China
-
7/30/2019 Banking Industry Tufail Khan
28/66
EMPLOYEE DISTRIBUTION WITHIN INDIA
Northern Region
17%
North-EasternRegion
2%
Eastern Region
16%
Central Region16%
tern Region21%
Southern Region
28%
Northern Region
North-Eastern Region
Eastern Region
Central Region
Western Region
Southern Region
-
7/30/2019 Banking Industry Tufail Khan
29/66
-
7/30/2019 Banking Industry Tufail Khan
30/66
i) UP =8591
II) MAHARASHTRA =6845
III) ANDRE PRAD. =5621
PUNJAB = 2823 (11TH)
DELHI =1812 (13TH)
HARYANA=1758 (14TH)
-
7/30/2019 Banking Industry Tufail Khan
31/66
SERVICES OF BANK
Personal Banking Gold Banking NRI Banking Corporate Banking Small Scale Industries Small Business Finance Rural Banking Government Business
Home Loans
-
7/30/2019 Banking Industry Tufail Khan
32/66
RESERVE BANK OF INDIA
Central bank of India
Proposed by HILTON YOUNG COMMISSION
Established in1931, active since 1935
RBI act-1934
Share capital=5 crore
Chairman=
Gold value held by RBI=4699.79 CRORE(2006) Foreign Securities=345244(2005), 399769(2006)
-
7/30/2019 Banking Industry Tufail Khan
33/66
Function of RBI
-
7/30/2019 Banking Industry Tufail Khan
34/66
CENTRAL BOARD OF RBI
RBI affairs are governed by a central board ofdirectors.
appointed by the Govt in keeping with the RBIAct.
Appointed/nominated for a period of 4 years
Constitution:1. Official Directors
2. Full-time : Governor and not more than four DeputyGovernors
3. Nominated by Government: 10 Directors fromvarious fields and one government Official
4. Others: four Directors - one each from four localboards
-
7/30/2019 Banking Industry Tufail Khan
35/66
NEWS OF RBI
i) RBI transfered of shareholding in SBI to Govt inJune,2007 amount to be determined on market price inaccordance with the SEBI guidelines.
ii) Transfer of ownership of shareholding of RBI in NABARDand NHB to Government of India in June, 2008 at book
value.iii) RBI has increase CRR by 50 basis points
iv) RBI revised guide lines for implementation of new carframework has hiked the tier-I ratio from 4.5 to 6% (by2010)
-
7/30/2019 Banking Industry Tufail Khan
36/66
TOP BANKS IN INDIA State Bank Of India (SBI) ICICI
PNB
CANARA BANK
BANK OF INDIA HDFC Bank
HSBC Bank
IDBI
Allahabad Bank American Express Bank
In India
Andhra BanK Central Bank Of India
CITI Bank
Standard Chartered
Bank United Bank Of India
Bank Of Baroda
http://finance.indiamart.com/investment_in_india/top_banks_india.htmlhttp://finance.indiamart.com/investment_in_india/top_banks_india.html -
7/30/2019 Banking Industry Tufail Khan
37/66
SBI came into existence by an act of Parliament assuccessor to the Imperial Bank of India
Nationalized in 1955
SBI is India's largest commercial bank
Chairman= Mr.OM PRAKASH BHATT
On the basis of assets, its global position last year was 84;on profits on average capital, 104, and return on assets, 407.
Even within Asia, its rank was 11.
On the strength of its balance sheet, the bank ranked 93rdamong top global banks.
-
7/30/2019 Banking Industry Tufail Khan
38/66
serves to 90 million customers through a network of9,000Branches (approximat 14% of all bank branches)
commands 20% of deposits & loans of all scheduledcommercial banks.
offers -- either directly or through subsidiaries -- a widerange of banking services
SBI HAS ISSUED 3 CRORE DEBIT CARD
SBI Credit Card is acceptable over 1,05,000 merchants inIndia and Nepal
-
7/30/2019 Banking Industry Tufail Khan
39/66
SBI Group includes a network of eight banking subsidiaries & several
non banking subsidiaries offers
Bank in SBI group inclued:1-State Bank of Bikaner and Jaipur (SBBJ)2-State Bank of Hyderabad (SBH)3-State Bank of India (SBI)
4-State Bank of Indore (SBIR)5-State Bank of Mysore (SBM)6-State Bank of Patiala (SBP)7-State Bank of Saurashtra (SBS)8-State Bank of Travancore (SBT)
SBI has in 34 countries. SBI serves theinternational needs of its foreign customers,
in addition to conducting retail operations.
-
7/30/2019 Banking Industry Tufail Khan
40/66
SHARE HOLDING IN SBI
-
7/30/2019 Banking Industry Tufail Khan
41/66
FINANCIAL ANALYSISBVS
0
100
200
300
400
500
600
700
YEAR
2002
YEAR
2003
YEAR
2004
YEAR
2005
YEAR
2006
YEAR
2007
BVS
5.63
4.5
3.48
2.65
1.881.56
0
1
2
3
4
5
6
YEAR
2002
YEAR
2003
YEAR
2004
YEAR
2005
YEAR
2006
YEAR
2007
NPA
NPA
-
7/30/2019 Banking Industry Tufail Khan
42/66
-
7/30/2019 Banking Industry Tufail Khan
43/66
-
7/30/2019 Banking Industry Tufail Khan
44/66
ICICI Bank(ICICI 1955)
India's largest private sector bank in marketcapitalization
second largest overall in terms of assets.
total assets of about USD 79 Billion (end-Mar2007),
a network of over 950 branches, about 3600 ATMs,and 24 million customer
ICICI Bank offers a wide range of banking productsand financial services to corporate and retail
ICICI Bank's equity shares are listed in India onstock exchanges at Kolkata , BSE and the NSE
2002 f ICICI ith ICICI B k
-
7/30/2019 Banking Industry Tufail Khan
45/66
2002--- merger of ICICI,with ICICI Bank
2004 ICICI opens a office in Bangladesh to tap the extensive tradebetween that country
2005 ICICI acquires I-K Bank , a Russia bank with about US$4mn inassets,
ICICI Bank offers a high-interest (5.4% gross) internet savings accountto UK customers
ICICI establishes a branch in Dubai International Financial Centre & inHong Kong.
2006 ICICI Bank opens a branch in Belgium. ICICI opensrepresentative offices in Bangkok, Jakarta, and Kuala Lumpur.
2007 ICICI amalgamates Sangli Bank, which is headquartered inMaharashtra and which has 158 branches in Maharashtra and another31 in Karnataka.
-
7/30/2019 Banking Industry Tufail Khan
46/66
First Bank in India to launch website 1996First Bank in India to launch Internet Banking 1997
FOR YEAR ENDING 31-3-07
Profits: USD 715 mln (prev. USD 569 mn)
Assets: USD 79 bn (prev. USD 56.3 bn)
Employees: over 33,000 (prev. 25,384)
-
7/30/2019 Banking Industry Tufail Khan
47/66
PNB PNB was set up in 1894 with headquarters at Lahore.
PNB is serving over 3.5 crore customers through4540 Offices
PNB with 112 year tradition of sound & prudent
banking is one among 300 global companies & 7Indian companies
The Banker, the leading magazine in London, has
placed PNB at the 248th position
Bank has set up representative offices at Almaty:Kazakhistan, Shanghai: China and in London.Besides, Bank has opened a full fledged Branch in
Kabul, Afghanistan.
HDFC BANK
-
7/30/2019 Banking Industry Tufail Khan
48/66
HDFC BANK The bank was promoted by the housing development finance
corporation limited ( 1977)
Incorporated in 1994
754 branch and 1800 ATMs in 327 cities.
All branches of the bank are linked on an online real-time
total income of the bank for the quarter ended September 30,
2007 grew by44.0% to Rs.2,845.1 crores.
deposits increase of 43.5% from September 2006
CAR as of September 30, 2007 14.9%
-
7/30/2019 Banking Industry Tufail Khan
49/66
-
7/30/2019 Banking Industry Tufail Khan
50/66
-
7/30/2019 Banking Industry Tufail Khan
51/66
-
7/30/2019 Banking Industry Tufail Khan
52/66
CSR BY INDIAN BANKS
-
7/30/2019 Banking Industry Tufail Khan
53/66
CSR BY INDIAN BANKS
Directors established a basic policy.
Each group co. that earns over 300 million yen, donates 1% of its profitto the Children's Social Welfare Corp.
Charitable activities took hold.SBI donated 167.1 million yen to children's homes and infant homes
SBI established the SBI Child Welfare Corp.SBI became the first enterprise to make use of stock options andsecurities as donations
SBI Child Welfare Corp. became fully active.
SBI representatives visit child welfare facilities across Japan to learnabout child welfare facilities.
ICICI donated Rs 11.5 million towards GujaratEarthquake.
-
7/30/2019 Banking Industry Tufail Khan
54/66
TOP BANKS OF WORLD
CITI GROUP
JP MORGAN CHASE
HSBC HOLDING
BANK OF AMERICA
CREDIT AGRICOLE
ROYAL BANK OF SCOTLAND
MITSUBISHI TOKYOHBOS
BNP PARIBUS
-
7/30/2019 Banking Industry Tufail Khan
55/66
-
7/30/2019 Banking Industry Tufail Khan
56/66
STRENGTH
Growing economy
Support by government
Huge pool of skilled professionals
Existence of related industry High population
Growing saving-investment ratio
-
7/30/2019 Banking Industry Tufail Khan
57/66
WEAKNESS
Lack of networking among bank branches(the rural and semi-urban banks have still to see information
technology as an enabler. Complete integration of branch networkinvolves huge investments for creating IT and communicationinfrastructure.)
Low savings rate Restriction by govt regarding investment
-
7/30/2019 Banking Industry Tufail Khan
58/66
OPPORTUNITY
Data mining
Banks have a huge customer database which has to beproperly leveraged. Target segments should beidentified and tapped.
Wide distribution networks of banks provides a greatopportunity to sell insurance products through banks
Another potential area of growth of bancassurance is
exploiting the corporate customers and tying up forinsurance of the employees of corporate clients
-
7/30/2019 Banking Industry Tufail Khan
59/66
THREAT
Human Resource Challenges Success in bancassurance venture requires a
change in mindset. Though we have a large talentpool, the inability to sell complex insurance
products on the part of bank professionals and theirreluctance to learn can be severe setback. Therehas to be a change in the thinking, approach andwork culture.
Non-response from the target groups can also posea challenge as it happened in the USA in 1980s.
-
7/30/2019 Banking Industry Tufail Khan
60/66
EASY BANKING--This section is fullydedicated to the Tech banking, include mobile
banking, SMS banking, net banking & ATMs.
CORE BANKING is all about knowing
customers' needs. Provide them with the rightproducts at the right time through the rightchannels 24 hours a day, 7 days a week.
Proxy banking (see in notes)Mercantile banking in law note book
FUTURE IN INDIA
-
7/30/2019 Banking Industry Tufail Khan
61/66
FUTURE IN INDIA Fast growth & more employment
Centre is planning to raise the upper limit onforeign equity in PSB
PSU raise rs. 31300 crore by march 2009
IBA proposal to lower the minimum dividendpayment requirement for PSB
The government is seeking proposal to splitting
of share to improve liquidity of bank stockNational banks will raise rs.14728 crore equity
2% decline in wages and salary compare to
14% growth of employment
-
7/30/2019 Banking Industry Tufail Khan
62/66
THANKS!!!
-
7/30/2019 Banking Industry Tufail Khan
63/66
QUESTIONS
what isPresidency Banks
Diff b/w banksand NBFI
Interest checkingaccount (NOW)
checking account(NOW)
-
7/30/2019 Banking Industry Tufail Khan
64/66
EXTRA POINT
actual acquisition cost for the stake transferis likely to be around Rs. 40,000 crore.
The NEFT, was introduced in 2005. Since its
inception the coverage of NEFT hasincreased. Currently it is available in 28000+bank branches, through 67 banks at 3000+
centers. The first regular institution resembling what
we call a Bank, was establishedat Venice,
nearly 700 years ago.
-
7/30/2019 Banking Industry Tufail Khan
65/66
BANGING SECTOR
-
7/30/2019 Banking Industry Tufail Khan
66/66
BANGING SECTOR