not too many crackers

7/28/2019 Not Too Many Crackers

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Not too many crackers & diyas for the auto industry last month. The Diwali & Dussheraholidays usually lead to a big spike in auto sales, with most customers actually planningtheir car delivery around these two auspicious occasions. Unfortunately, the weak market

sentiment, high interest rates and stratospheric petrol prices resulted in a damp holidayseason. It's sad that there are no signs of improvement in the near future either.

- The long-drawn strikes hit Maruti the hardest in October...the company's sales were down

50+% (year on year). The Alto hit a new low, at a mere 15,000 units sold (usually closesthe month at anywhere between 20 - 30K sales). The Ritz, WagonR & SX4 - regular strong

movers - also suffered a drastic decline in volume. Kudos to Maruti for somehow managing

to deliver nearly 8,000 Swifts though. Even Dzire deliveries were reasonably managed atthe ~5,000 mark. Maruti's market share for the last month was the lowest in a long time,and even though labour problems (hopefully) are behind it, regaining lost market share

points will not be easy. We must also spare a thought for Maruti's vendors who are far

smaller in size and have suffered greatly in these trying times. Some competitors recordeda marginal spike in sales (i10, Vista, Figo etc.); a part of this could be attributed to Marutis

being unavailable at showrooms.

- Hyundai had some unpredictable hits & misses in October. Take the i10 for instance, it's

performance is surprisingly back to thepre-petrol-hike days at a strong 11.5 thousandshipments. Possibly, the number includes a lot of Maruti converts. The premium i20

maintained its 2011 monthly average, and closed October @ 6,800. The fluidicVerna also

maintained a comfortable lead over the City & Vento, retaining the title of the best sellingupper C segment sedan. On the other hand, the Santro dropped to an all-time low of amere 3,100 units. Take it as the Eon effect; whether Hyundai adjusted production in favour

of the Eon (unlikely) or customers cross-shopped in favour of the new hatch is unknown.

After the petrol price hike in June 2011, Hyundai's total sales had dipped to the ~25,000level. The Eon takes Hyundai back to 30,000+ (35K in September, and 33K in October). It

will be interesting to see how the Eon gains traction in the entry-level hatchback segment.Santa Fe imports & deliveries appear to have become strong in the August-September

period.

- Tata's passenger car sales improved 3% over October 2010. While Nano numbers have

gone up, 3,800 is still nothing for a ~2 lakh rupee car in India. Tata simply hasn't marketedthe car well enough. The Indica / Vista & Indigo CS / Manza continue their respectable

performance for the 2nd month in a row. The Indica sisters - especially - clocked over10,000 units, while the Indigo / Manza together occupy the best selling sedan category. TheSumo / Grande is slowly inching back to the 2.5K level it was previously used to, recordinga sales increase for the 4th month in a row. Not much happening for the Safari though, and

even the Aria isn't able to sustain the 500+ point it managed last month with the cheaper

4x2's introduction. The sheer value of the XUV500 will inevitably put Aria buyers in a fix.

- Someone forgot to tell the Bolero that market conditions aren't favourable. India's

favourite UV has yet another outstanding month with over 8,000 copies sold! The Scorpio


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also has a good run, nearly touching the 4,200 mark, while the Xylo continues its mediocreperformance at 2,431. XUV500 deliveries gaining traction and should cross 2,000 soon.

Remember that Mahindra's new premium SUV is sold out for 4 months.

- The Beat diesel climbs up impressively, becoming the first Chevy to record 5,000+ sales(for 3 of the last 4 months). On the other hand, the Spark inexplicably records another sub-

2K month. The li'l Spark is a very competent hatchback and has some great discounts onoffer. Except for the General giving production preference to the Beat, I can't think of anyother reason for the Spark's fall as it was a consistent 3,000 - 3,300 performer. The Cruze

overtakes the Corolla once again, but the Optra, Aveo & UVA continue as market duds. The

Captiva also appears to be fast losing favour with 20 lakh rupee SUV customers.

- Riding high on the Liva & Etios, Toyota is one of the rare manufacturers to record a

whopping 63% growth year-on-year. The Etios, unsurprisingly, outsold the Liva. Rememberthat the Etios has to fend off lesser competition than its hatchback sibling. The Innova,

Corolla & Fortuner have had a good - not excellent- month. Prado CBU imports see anoticeable rise.

- The Figo has amongst its best month in 6. Ford's heavily cashing in on the excellent 1.4

TDCi engine, I doubt there are too many people buying the 1.2 petrol. The ol' Fiesta, whosales have shot up after the new generation's launch, has a decent month @ 1,549 cars.The overpriced 2011 Fiesta performs as expected and is a market failure in only its 4 month

of launch. Will Ford swallow a bitter pill & reposition the car? There really is no other wayout to correct this strategical error.

- The all-rounded Vento overtakes the Honda City again, but only just @ 3,474 dealer

dispatches. Slight improvement with the Polo too, which ended October with a score of3,340. The new Jetta has given VW the volumes it expected and does 373 cars (the

previous-gen Jetta fared much poorer in comparison). However, the Passat simply cannot

touch the Superb in the premium sedan space.

- Honda has 6,000 Brio bookings and a long waiting period for the Jazz (IIRC, backlog of4,000). However, Honda isn't able to maximise the opportunity that it's well-priced new

hatchback brings. Reason? The Thailand floods. Only 1,220 Brios were shipped in October,and the price-cut Jazz shows no real improvement from its overpriced days (463 units). The

City continues as Honda's star performer bringing in a score of 3,376. The Civic remains a

market dud, while the Accord stays within a 20% reach of the Skoda Superb (the segmentking). Keeping in mind that the Accord lacks a diesel engine, this isn't too bad.

- The Nissan Sunny has a great entry-price point and finds 1,340 new homes in October. I

expect it to settle at around the 1,500 mark; after the diesel arrives, the Sunny shouldeasily cross 2,000 in the first quarter of 2012. The Micra has its best performance in 6

months @ 1,619 units.

- After two poor months, Skoda has a relatively better diwali season. The Fabia is back atthe 1,400 level (albeit no match for sister company's Polo), and the Laura @ 406 outsells

both, the Jetta & the Civic. The Yeti, with its small unappealing design, simply fails to findany takers @ merely 103 sales. The Superb continues to be the best selling luxury car in itsclass.

- Rounding up the rear are HM-Mitsubishi (all cars tanking, save for the Pajero that brings insome $$$) and Fiat (Punto recording its lowest ever sales). I understand that Fiat has


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problems, but still, things are thatbad that the cars should only sell 622 units. When thingsget tough, the weakest are the first to lose, I guess.

Bank of india

Car loan facility of bank of india

Core competency- customer relationship and customer service

Bank of india does not make any additional efforts to create new customers or enter new markets. They

depend on their existing customers of other services and whatever marketing is done for car loans, is

done by any employee of bank of india who feels the customer is a potential buyer.

Various schemes of bank of india..

Any customer whoisinterested in getting a loan can opt from the following schemes which it finds

most suitable.

Autofin- autofinance

This scheme deals with all kinds financing for all kind of automobiles for personal pupose. This financing

Is for any kind of vehicle for personal purpose.

The repayment period for these kind of vehicles may extend from 3-6yrs depending upon the repayment

capacity of the customer.

The vehicle can be finaced upto 75% of its total purchase cost ( cost of vehicle,insuarance,registrations)

at the time of purchse.

Repayment

Equated monthly instalment

Intrest and instalment both are added for the entire repayment period and equated.

Rate of intrest- 12.25

If any customer is unable pay instalment for the current month, the bank charges 2% penal rate of

intrest of the overdue amount which keeps on adding up until paid off.

If the customer is unable to pay instalments continuosly for 6 months the customer is assumed to be

non-performing asset.

Treatment of npa


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1) The bank stops adding intrest

2) Customer is sent a notice regarding the non payment

3) The bank creats a 100% provision of the unpaid amount

4) And after declairing it npa legal actions are taken aginst the customer and may take possession

of the car and has legal authority to sell it off.

SRTO(small road transport operator)

This type of loaning for cars is done for cars which are used for commercial purpose. This

loaning can be done for upto 6 vehicles.

Intrest rate- 14.5

Repayment

3to 7yrs

On emi basis.

The repayment of this kind of loan is similar to that of autofin.

rto

priority sector target- srto qualifies in this sector and helps achieve the target.

The current target is 40% of the total advances.

Elgibilty of the customer

Age- below 60 till the repayment of the loan

3 year income proof (income tax return file, salary slip etc)

No legal proceedings against the customer

Not be a defaulter of any other financial institution

Medi mobile scheme-

Doctors are granted loans under this scheme. The rate of intrest is 1% lower than the current rate of

intrest. This type of loaning also comes under the priority sector.


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Sbi loaning

SBI provide the best car loan scheme for you.

Salient features:

No Advance EMI;

Longest repayment tenure (7 years);

Lowest interest rates;

Lowest EMI;

LTV 85% of 'On Road Price' of car (includes registration, insurance and cost of

accessories worth Rs 25000), 90% in case of Corporate Salary Package accounts;

Interest Calculated on Daily Reducing Balance;

Flexibility of payment of EMI anytime during the month;

No pre-payment penalty;

Free Accident insurance ; Optional SBI Life cover;

Overdraft facility available.

Purpose

For purchase of new passenger cars, Multi Utility Vehicles (MUVs) and SUVs.

Eligibility

To avail an SBI Car Loan, you should be :

Individual between the age of 21-65 years of age.

Regular employee of State / Central Government, Public Sector Undertaking, Private

company or a reputed establishment.

Professionals, self-employed, businessmen, proprietary/partnership firms who is an

income tax assessee.

Person engaged in Agricultural and allied activities.

Net Annual Income Rs. 2,50,000/- and above.

Loan Amount

There is no upper limit for the amount of a car loan. A maximum loan amount of 48 times of

Net Monthly Income or 4 times of Net Annual Income can be sanctioned.


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Documents Required

You would need to submit the following documents along with the completed applicationform:

1. Statement of Bank account of the borrower for last 6 months.

2. 2 passport size photographs of borrower(s).3. A copy of passport /voters ID card/PAN card.

4. Proof of residence.

5. Latest salary-slip showing all deductions6. I.T. Returns/Form 16: 2 years for salaried employees and 2 years for professional/self-

employed/businessmen duly accepted by the ITO wherever applicable7. Proof of official address for non-salaried individuals

Margin

15% of the on road price (which includes vehicle registration charges, insurance, one-timeroad tax and accessories).

Repayment

You can enjoy the longest repayment period in the industry with us as long as 84 months.

Reimbursement of costs of car purchased by own sources

We also reimburse finance for the cars purchased out of own funds which are not more than3 month old at rate of interest applicable to New Car.

Interest

Click hereto view the interest rates

Processing Fee

Rs. 500/- per application. ( Till 30.06.2013)

Security

As per Bank's extant instructions.

(to smoothen the functions of car loaning, SBI involves dealers who help both the

customers as well as the bank with the procedure of loaning. The dealers collect information, get the documents required which are required for the loan to get sanctioned)
http://www.sbi.co.in/user.htm?action=viewsection&id=0,16,393,395http://www.sbi.co.in/user.htm?action=viewsection&id=0,16,393,395http://www.sbi.co.in/user.htm?action=viewsection&id=0,16,393,395


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SBI provides the loan for purchase of Car and Two Wheeler taken together.

Salient features:

No Advance EMI;

Longest repayment tenure (7 years);

Lowest interest rates;

Lowest EMI;

LTV 85% of 'On Road Price' of car (includes registration, insurance and cost ofaccessories worth Rs 25000), 90% in case of Corporate Salary Package accounts;

Interest Calculated on Daily Reducing Balance;

Flexibility of payment of EMI anytime during the month;

No pre-payment penalty;

Free Accident insurance; Optional SBI Life cover;

Purpose
https://www.sbi.co.in/user.htm?action=viewsection&lang=0&id=0,1,895,936,937


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For purchase of Car and Two Wheeler taken together.

Eligibility

To avail the Loan, you should be :

Individual between the age of 21-65 years of age.

Regular employee of State / Central Government, Public Sector Undertaking,Private company or a reputed establishment.

Professionals, self-employed, businessmen, proprietary/partnership firms who is anincome tax assessee.

Person engaged in Agricultural and allied activities.

Net Annual Income Rs. 2,50,000/- and above.

Loan Amount

There is no upper limit for the amount of the loan. A maximum loan amount of 48 timesof Net Monthly Income or 4 times of Net Annual Income can be sanctioned.

Process

i) Submission of both the invoices alongwith application form.

ii) Disbursement:

a) Simultaneously for two vehicles

or,

b) First Car Loan portion and then two-wheeler portion. But any case both disbursementshould be within one month

Documents Required

You would need to submit the following documents along with the completed applicationform:

1. Statement of Bank account of the borrower for last 6 months.

2. 2 passport size photographs of borrower(s).

3. A copy of passport /voters ID card/PAN card.

4. Proof of residence.


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5. Latest salary-slip showing all deductions

6. I.T. Returns/Form 16: 2 years for salaried employees and 2 years forprofessional/self-employed/businessmen duly accepted by the ITO whereverapplicable

7. Proof of official address for non-salaried individuals

Margin

15% of the on road price of the Car and two-wheeler (which includes vehicle registration

charges, insurance, one-time road tax and accessories).

Repayment

You can enjoy the longest repayment period of 84 months.

Interest

Click hereto view the interest rates

Processing Fee

Rs. 500/- per application. (Till 30.06.2013)

Security

As per Bank's extant instructions.

SBI provide the best car

loan scheme for you to

take a loan for purchase of

used car, not more than 5years old.

SBI offers you:

No Advance EMI;

Longest repayment

tenure (7 years);

KEY POINTS

Purpose

Eligibility

Loan Amount

DocumentsRequired

Margin

Repayment

Interest
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Lower interest rates

Lower EMI;

LTV 85% of On

Road Price of car

(includesregistration,

insurance and costof accessoriesworth Rs 25000),

Interest Calculated

on DailyReducing Balance;

Flexibility of

payment of EMI

anytime during themonth;

Low pre-paymentpenalty, only 2%;

Low processing fee

(only 0.51% of loanamount);

Free Accidental

insurance ;

Optional SBI Life

cover.

The Scheme

Purpose

You can take finance

for purchase of passengercars, Multi Utility Vehicles(MUVs) and SUVs notmore than five years old.

Eligibility

To avail an SBI Car Loan,

Security
https://www.sbi.co.in/user.htmhttps://www.sbi.co.in/user.htmhttps://www.sbi.co.in/user.htm


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you should be:

Individual between

the age of 21-65

years of age.

A Permanentemployee of State /

CentralGovernment, PublicSector

Undertaking,

Private company ora reputedestablishment or

A Professionals orself-employedindividual who is an

income tax

assessee or A Person engaged

in agriculture andallied activities.

Net Annual IncomeRs. 100,000/- andabove.

Salient Features

Loan Amount

Maximum Loan amount

will be 2.5 times of netannual income. Spouses

income could also beconsidered provided the

spouse becomes a co-borrower in the loan.

Documents Required

You would need to

submit the followingdocuments along with thecompleted application

form:

1. Statement of Bank

account of the


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borrower for last 12

months.2. 2 passport size

photographs of

borrower(s).

3. Signature

identification frombankers of

borrower(s).

4. A copy of passport/voters ID

card/PAN card.

5. Proof of residence.6. Latest salary-slip

showing alldeductions

7. I.T. Returns/Form16: 2 years for

salaried employeesand 3 years forprofessional/self-

employed/businessmen duly accepted

by the ITOwherever applicable

to be submitted.8. Proof of official

address for non-

salaried individuals.

Margin

15% of the on the road

price (which includesvehicle registration

charges, insurance, one-time road tax and

accessories).

Repayment

You can enjoy the longest

repayment period in theindustry with us as long as

84 months.

Interest

Click hereto view the
http://www.sbi.co.in/user.htm?action=viewsection&id=0,16,393,395http://www.sbi.co.in/user.htm?action=viewsection&id=0,16,393,395http://www.sbi.co.in/user.htm?action=viewsection&id=0,16,393,395


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interest rates.

Processing Fee

0.51% of Loan amount

Security

As per Bank's extant

instructions.

Product BOI Star Vehicle Loan Scheme

Security Salaried employees, Professionals, Self-employed

Non-Resident Indians- advance to be granted jointly withResident Indians (close relative)

(Age of the individual borrower not to exceed 65 years at the

time of availing the advance)Companies, Partnership Firms, Proprietary concern and other

types of Corporate entities.

HUFs not Eligible

Purpose Purchase of two/four wheeler vehicles (not requiring heavy

duty license). For purchase of used/second hand 2 and 4wheeler. (age of the vehicle not to exceed 3 years)

Type of Advance Demand Loan /Term Loan (for 2nd hand vehicles only

Demand Loan)

Quantum of Loan Maximum limits for finance :

. Individuals (Resident in India) :For Indian make vehicles - Rs.25 lacs

. For imported vehicles - Rs.75 lacs.

. For Companies and corporate entities - Rs.100 lacs (Can bea fleet of vehicles)

. Non-resident Indians - Rs.25 lacs.

The limits are subject to :


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24 times of gross monthly emoluments in case of salariedemployees/pension/ or two times of gross average annual

income as per last 3 years I.T. Returns

. Two times average annual cash accrual (i.e. PAT + Dep.) asper firms/ companies last 3 years audited balance sheet, P&L

A/c.

Net take home pay should be at least 40% of income (net of

proposed EMI).

Repayment (New

Vehicles)

. For Individuals - for new vehicles4 wheelers - Max. 7 years.2 wheelers - Max. 5 years.

. For Corporates/Firms, etc. - Max. 5 years.

For second hand vehicles - Max. 3 years.

Security Hypothecation of vehicle to be purchased out of Bank finance.Charge to be registered with RTO.

Third party guarantee required in the following cases

Loans to NRIsGuarantee of Resident Indian is required.

Vehicles not registered with RTO and for loans to individuals for limits exceedingRs.25.00 lacs.

Margin Individuals (including NRIs) : (For new vehicles)

Amount Margin -%

Upto Rs.10 lacsNIL MarginOn Ex. show room Price-excluding comprehensive

Insurance, Taxes and Registration charges

Above Rs.10Lacs to Rs.25

Lacs

15% Margin

On Road Price-including comprehensive InsuranceTaxes and Registration charges

Above Rs.25

Lacs25% MarginOn Road Price-including comprehensive Insurance


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Taxes and Registration charges

For Corporate entities/firms, etc. : Min. 25%

For second hand vehicles : Min. 30% ( on depreciated value

or value assessed by Valuer or sale consideration whichever islower)

Rate of Interest New VehicleRepayment period up to 7

years

Base Rate Plus 0.45% presently 10.70

%

Second Hand Vehicle

Maximum Repaymentperiod 3 years

Base Rate Plus 1.25% presently 11.50

%

Processing / HandlingCharges (One Time)

Upto Rs.25,000 One time Rs.1000/-

Above Rs.25000/- to

Rs.25 Lacs

One time @1% of loan

amount Min.Rs.2000/- and Max.Rs.10,000/-

Loans Above Rs.25

Lacs

One time flat Rs.15000/-

For Partnership firms/Corporates Processing charges will bedouble that of individuals

For Rural Branches Processing charges will be 75% that ofapplicable to individuals in respect of loans availed by

borrowers of rural areas from the rural Branches.

The first bank in India, though conservative, was established in 1786. From 1786 till today, the journey of Indian BankingSystem can be segregated into three distinct phases:

Early phase of Indian banks, from 1786 to 1969

Nationalization of banks and the banking sector reforms, from 1969 to 1991

New phase of Indian banking system, with the reforms after 1991


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Phase 1The first bank in India, the General Bank of India, was set up in 1786. Bank of Hindustan and Bengal Bank followed. TheEast India Company established Bank of Bengal (1809), Bank of Bombay (1840), and Bank of Madras (1843) asindependent units and called them Presidency banks. These three banks were amalgamated in 1920 and the Imperial Bankof India, a bank of private shareholders, mostly Europeans, was established. Allahabad Bank was established, exclusivelyby Indians, in 1865. Punjab National Bank was set up in 1894 with headquarters in Lahore. Between 1906 and 1913, Bankof India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank, and Bank of Mysore were set up. The ReserveBank of India came in 1935.

During the first phase, the growth was very slow and banks also experienced periodic failures between 1913 and 1948.There were approximately 1,100 banks, mostly small. To streamline the functioning and activities of commercial banks, theGovernment of India came up with the Banking Companies Act, 1949, which was later changed to the Banking RegulationAct, 1949 as per amending Act of 1965 (Act No. 23 of 1965). The Reserve Bank of India (RBI ) was vested with extensivepowers for the supervision of banking in India as the Central banking authority. During those days, the general public hadlesser confidence in banks. As an aftermath, deposit mobilization was slow. Moreover, the savings bank facility provided bythe Postal department was comparatively safer, and funds were largely given to traders.Phase 2The government took major initiatives in banking sector reforms after Independence. In 1955, it nationalized the ImperialBank of India and started offering extensive banking facilities, especially in rural and semi-urban areas. The governmentconstituted the State Bank of India to act as the principal agent of the RBI and to handle banking transactions of the Uniongovernment and state governments all over the country. Seven banks owned by the Princely states were nationalized in1959 and they became subsidiaries of the State Bank of India. In 1969, 14 commercial banks in the country werenationalized. In the second phase of banking sector reforms, seven more banks were nationalized in 1980. With this, 80percent of the banking sector in India came under the government ownership.

Phase 3This phase has introduced many more products and facilities in the banking sector as part of the reforms process. In 1991,under the chairmanship of M Narasimham, a committee was set up, which worked for the liberalization of banking practices.Now, the country is flooded with foreign banks and their ATM stations. Efforts are being put to give a satisfactory service tocustomers. Phone banking and net banking are introduced. The entire system became more convenient and swift. Time isgiven importance in all money transactions.The financial system of India has shown a great deal of resilience. It is sheltered from crises triggered by externalmacroeconomic shocks, which other East Asian countries often suffered. This is all due to a flexible exchange rate regime,the high foreign exchange reserve, the not-yet fully convertible capital account, and the limited foreign exchange exposure ofbanks and their customers.The Banking Structure in IndiaThe commercial banking structure in India consists of scheduled commercial banks and unscheduled banks. Scheduledbanks constitute those banks that are included in the Second Schedule of Reserve Bank of India (RBI) Act, 1934.As on June 30, 1999, there were 300 scheduled banks in India having a total network of 64,918 branches. The scheduledcommercial banks in India comprise State Bank of India and its associates (8), nationalised banks (19), foreign banks (45),private sector banks (32), co-operative banks, and regional rural banks. Before the nationalization of Indian banks, the State

Bank of India (SBI) was the only nationalized bank, which was nationalized on July 1, 1955, under the SBI Act of 1955. Thenationalization of seven State Bank subsidiaries took place in 1959.After the nationalization of banks in India, the branches of the public sector banks rose to approximately 800 percent indeposits and advances took a huge jump by 11,000 percent.

Nationalization Process

1955: Nationalization of State Bank of India

1959: Nationalization of SBI subsidiaries

1969: Nationalization of 14 major banks

1980: Nationalization of seven banks with deposits over Rs 200 crore

Banks in IndiaIn India, banks are segregated in different groups. Each group has its own benefits and limitations in operations. Each has

its own dedicated target market. A few of them work in the rural sector only while others in both rural as well as urban. Manybanks are catering in cities only. Some banks are of Indian origin and some are foreign players.Banks in India can be classified into:

Public Sector Banks

Private Sector Banks

Cooperative Banks

Regional Rural Banks

Foreign Banks


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One aspect to be noted is the increasing number of foreign banks in India. The RBI has shown certain interest to involvemore foreign banks. This step has paved the way for a few more foreign banks to start business in India.Reserve Bank of India (RBI)The central bank of the country is the Reserve Bank of India (RBI). It was established in April 1935 with a share capital of Rs5 crore on the basis of the recommendations of the Hilton Young Commission. The share capital was divided into fully paidshares of Rs 100 each, which was entirely owned by private shareholders in the beginning. The government held shares ofnominal value of Rs 220,000.The RBI commenced operation on April 1, 1935, under the Reserve Bank of India Act, 1934. The Act (II of 1934) provides

the statutory basis of the functioning of the Bank. The Bank was constituted to meet the following requirements:

Regulate the issue of currency notes

Maintain reserves with a view to securing monetary stability

Operate the credit and currency system of the country to its advantage

Functions of the RBIThe Reserve Bank of India Act of 1934 entrusts all the important functions of a central bank with the Reserve Bank of India.Bank of Issue: Under Section 22 of the Act, the Bank has the sole right to issue currency notes of all denominations. Thedistribution of one-rupee notes and coins and small coins all over the country is undertaken by the Reserve Bank as anagent of the government.Banker to the Government: The second important function of the RBI is to act as the govern ments banker, agent, andadviser.Bankers' Bank and Lender of the Last Resort: The RBI acts as the bankers' bank. Since commercial banks can always

expect the RBI to come to their help in times of banking crisis, the RBI becomes not only the banker's bank but also thelender of the last resort.Controller of Credit: The RBI is the controller of credit, i.e., it has the power to influence the volume of credit created bybanks in India. It can do so through changing the Bank rate or through open market operations.Custodian of Foreign Reserves: The RBI has the responsibility to maintain the official rate of exchange. Besidesmaintaining the rate of exchange of the rupee, the RBI has to act as the custodian of India's reserve of internationalcurrencies.Supervisory Functions: In addition to its traditional central banking functions, the RBI has certain non-monetary functionsof the nature of supervision of banks and promotion of sound banking in India. The Reserve Bank Act, 1934, and theBanking Regulation Act, 1949, have given the RBI wide powers of supervision and control over commercial and co-operativebanks, relating to licensing and establishments, branch expansion, liquidity of their assets, management and methods ofworking, amalgamation, reconstruction, and liquidation.Indian Banks Association (IBA)The Indian Banks Association (IBA) was formed on September 26, 1946, with 22 members. Today, IBA has more than 156members, such as public sector banks, private sector banks, foreign banks having offices in India, urban co-operativebanks, developmental financial institutions, federations, merchant banks, mutual funds, housing finance corporations, etc.The IBA has the following functions:

Promote sound and progressive banking principles and practices.

Render assistance and to provide common services to members.

Organize co-ordination and co-operation on procedural, legal, technical, administrative, and professional matters.

Collect, classify, and circulate statistical and other information.

Pool expertise towards common purposes such as cost reduction, increased efficiency, productivity, and improvingsystems, procedures, and banking practices.

Project good public image of banking through publicity and public relations.

Encourage sports and cultural activities among bank employees.

Banking Activities

Retail banking, dealing directly with individuals and small businesses

Business banking, providing services to mid-market businesses

Corporate banking, directed at large business entities

Private banking, providing wealth management services to high networth individuals

Investment banking, activities in the financial markets, such as "underwrite" (guarantee the sale of) stock and bondissues, trade for their own accounts, make markets, and advise corporations on capital market activities likemergers and acquisitions

Merchant banking is the private equity activity of investment banks

Financial services, global financial institutions that engage in multiple activities such as banking and insurance


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