The bank has accepting the deposit for the purpose of lending or investment of deposits of money from the public or repayable on demand or otherwise .

The first bank in India was established in 1786.

Commercial banks are very important part of the Indian money market. These commercial banks contributes in mobilizing the savings from various sectors which is the foundation of economic growth.

The structure of the Indian banking system that evolved during the pre- independence period was without any purposive control and direction.

At the time of independence the position of Indian banking system has significantly changed and number of branches of commercial banks are increased.

Reason of India's growth

Phase 1

Phase 2

Phase 3

The general bank of India was set up in the year 1786. next came bank of Hindustan .

Then the east India company established

Bank of Bengal(1809)

Bank of Bombay (1840)

Bank of madras (1843)

Amalgamated in (1920)

The process of first phase was very slow and the growth are also and experienced periodic failure between 1913 to 1948.

After the amalgamation the imperial bank was established which started as private bank .

Government took major steps in this banking sector reforms after independence . In 1955 the imperial banking system was establishes to provide the facility on large scale specially in rural and semi- urban areas.

It formed a state bank of India as a principal agent of RBI and to handle the all banking transactions of the union .

Seven banks forming subsidiary of state bank of India was nationalized in 1960 on 19th July

It was the efforts of the prime minister of India Mrs. Indira Gandhi to nationalized more seven banks in India. This step brought 80% of the banking segment in India under government ownership.

ENACTMENT OF BANKING REGULATION ACT(1949)NATIONALISATION OF STATE BANK OF INDIA (1955)

NATIONALISATION OF SBI SUBSIDIARY (1959)INSURANCE COVER EXTENDED TO DEPOSIT (1961)NATIONALISATION OF 14 MAJOUR BANKS (1969)CREATION OF CREDIT CORPORATION(1971)CREATION OF REGIONAL RURAL BANKS(1975)

This phase has introduced many products and facilities in the banking sector in its reforms measure.

In 1991 under the M. NARASIHAM a committee was set up by his name which worked or liberalization of banking practice.

All efforts are made to give satisfactory service to

Consumers. that's why the net banking phone banking has been introduced. The entire system will be convenient AND swift.

STRUCTURE OF INDIAN BANKING SYSTEM

ORAGANISED SECTOR UNORGANISED SECTOR

RBIINDIGENO

US BANKS

MONEY LENDER

S

COMMERCIAL

BANKS

REGIONAL

RURAL BANKS

SCHEDULED BANK AND UNCHEDULED BANK

PRIVATE SECTOR , PUBLIC SECTORAND FOREIGN BANKS

In RBI of India is the leader of the Indian banking system . RBI is the central bank of country. It is the apex financial institutions of India .the RBI of India came into existence in 1935 and since then it has been making continuous efforts to improve the banking system in India. Its traditional functions include issue of currency, bank of bankers, bankers of government.

Jioohhbnhbbvnn according to RBI act 1934, a sscheduled scheduled bank is that bank in which has been included in second schedule of RBI.and which is not included in this sector are know as unscheduled sector. The banks have to comply with the criteria laid down according section 42(6)

It must have an paid up capital and reserves of an aggregate value of not less then 5 lakhs .

It must satisfy the RBI that its affairs are not conducted in a manner detrimental to the interest of depositors.

It must be a co-operative bank or a company defined under section 3 of companies act.

SCHEDULED BANK=

PUBLIC BANKS= those banks which are owned or controlled by government the public sector, commercial banking in India are started with setting up of state bank of India in 1955 by taking over the imperial bank of India the state bank of India and its subsidiary are known as state bank of India group or SBI group. The group consist of :-

State bank of Hyderabad State bank of Patiala State bank of Mysore State bank of Indore.

PUBLIC BANKS=

PRIVATE BANKS= the private sector banks controlled by industrial houses or business houses .in which no role of government . These banks are going to improve the competition with in industry along with foreign banks. The consumer oriented shift given by these banks is going to improve service and innovative products. They will provide round the clock banking with launch ATM. In January 1993 the RBI announced guidelines for entry of new commercial banks in according with recommendations and as an attempt to deregulate the banking system.

PRIVATE BANKS=

REGIONAL RURAL BANKS= these banks are formed to provide the credit and other facilities to small and marginal farmers. The need was felt as commercial banks and corporate banks were not able to serve these segments adequately . These are scheduled banks which are governed by regional rural banks act 1976.

REGIONAL RURAL BANKS=

FOREIGN BANKS= foreign banks have been working in India from British days. All other foreign banks have branches less than 10. these banks have concentrated mainly on corporate clients. At the end 1994-1995 the total number of branches of foreign banks stood ate 151. the no. of foreign banks are entering in India because with the deregulation of banking in 1993. such new foreign banks are :-

Bank of Ceylon

State commercial bank of Mauritius

Development bank of Singapore

Fuji bank

Toronto domination bank

FOREIGN BANK=

INDIGENOUS BANKS= indigenous banks are forefather of modern commercial banks. These are individual or partnership firms performing the banking functions. They also act as financial intermediaries. They are local bankers. They can be found in all parts of the country for example-in west India they are known as Marwari. In south India they are known as sahukars.

INDIGENOUS BANK=

MONEY LENDERS= money lenders depend entirely on their own funds for the lending. It includes large farmers, zamidars, traders and village shopkeepers etc. the main features of money lenders are:-

Their own funds for lending

Their clients are mainly belong to weaker sections.

They charge high rate of interest.

Their operations are totally unregulated.

They provide quick credit

MONEY LENDERS