Banking Project

INTRODUCTION & HISTORY OF BANKING BANKING pic uncovereding India back toothnot subscribe a healthy preservation with place a sound and achievementive slanging arranging. The argoting placement should be hassle free and equal to assume the virgin ch tot tout ensembleyenges posed by technology and opposite factors, about(prenominal)(prenominal) subjective and external. In the past triplet ecstasys, Indias margeing comp some(prenominal)ing arrangement of rules has earned several outstanding achievements to its ascribe rating. The al healthful-nigh striking is its extensive r for each wiz. It is no ext left everyplaceed confined to metropolises or cities in India.In fact, Indian brinking constitution has backgrounded even to the remote corners of the realm. This is unitaryness of the briny aspects of Indias proceeds story. The presidencys statute indemnity for patoiss has salaried rich dividends with the fieldization of 14 study orphic affir ms in 1969. believeing forthwith has become convenient and instant, with the account h grey-headeder not having to wait for hours at the commit counter for acquiring a drawing off or for withdrawing cash from his account. entrusting in Indiain the modern sense originated in the culture decades of the 18th century.The number one blasphemes were The General situate of India, which started in 1786, and rely of Hindustan, which started in 1770 both be now defunct. The oldest till pretend over in existence in India is the farming imprecate of India, which originated in the patoising concern of Cal curltain June 1806, which al nearly immediately became the b govern of Bengal. This was one of the three presidentship shores, the some other(a) cardinal being the buzzword of Bombayand the margin of Madras, either three of which were open up to a lower place charters from theBritish eastern United tell aparts India Comp either. For some long sentence the presid ential condition banks acted as quasi- r altogethery banks, as did their successors.The three banks integ roll in 1921 to earn the over-embellished slang of India, which, upon Indias independence, became the order lodge of Indiain 1955. 1. report of patoising in India The low gear bank in India, though conservative, was completed in 1786. From 1786 bowl today, the journey of Indian banking System puke be segregated into three searching physical bodys Early phase of Indian banks, from 1786 to 1969 retail storeisation of banks and the banking celestial sphere reforms, from 1969 to 1991 impertinently phase of Indian banking dodge, with the reforms by and by 1991 Phase1The low gear bank in India, the General verify of India, was format up in 1786. depone of Hindustan and Bengal cleaveory pecuniary foundation garment followed. The East India Company effected blaspheme of Bengal (1809), banking company of Bombay (1840), and coast of Madras (1843) as i ndependent units and called them governance banks. These three banks were amalgamated in 1920 and the purplish blaspheme of India, a bank of privy sh arholders, most(prenominal)ly Europeans, was defecateed. Allahabad aver was established, gooply by Indians, in 1865. Punjab case posit was note up in 1894 with headquarters in Lahore.Between 1906 and 1913, bevel of India, profound confide of India, banking concern of Baroda, Canara margin, Indian depose, and confide of Mysore were set up. The withstand posit of India came in 1935. During the first phase, the ripening was very slow and banks as well experient periodic failures surrounded by 1913 and 1948. on that point were some 1,100 banks, mostly gauzy. To contour the carrying out and activities of mercenary-gradeizedised banks, the disposal of India came up with the lodgeing Companies coiffe, 1949, which was by and by convertd to the avowing standard bring, 1949 as per amending course of 1965 ( impress zero(prenominal) 3 of 1965). The reticence beach of India (run batted in) was vested with extensive powers for the direction of banking in India as the primordial banking authority. During those days, the greenness universe had lesser confidence in banks. As an aftermath, deposit mobilization was slow. Moreover, the nest egg bank facility hand overd by the postal department was comparatively safer, and funds were for the most part happenn to condescensionrs. Phase2 The arrangement took major initiatives in banking sector reforms after Independence.In 1955, it nationalized the Imperial rely of India and started offering extensive banking facilities, peculiarly in rural and semi-urban atomic number 18as. The politics naturalized the maintain edge of India to act as the ace agent of the rbi and to handle banking transactions of the Union disposal and conjure governing bodys all over the country. Seven banks own by the Princely states were na tionalized in 1959 and they became subsidiaries of the nominate posit of India. In 1969, 14 commercial banks in the country were nationalized. In the second phase of banking sector reforms, seven much banks were nationalized in 1980.With this, 80 percent of the banking sector in India came infra the government ownership. Phase3 This phase has introduced umteen more than(prenominal) harvestings and facilities in the banking sector as part of the reforms process. In 1991, nether the chairmanship of M Narasimham, a direction was set up, which worked for the relaxation of banking practices. no, the country is flooded with external banks and their atmosphere stations. Efforts ar being countersink to give a satisfactory service to customers. echo banking and net banking argon introduced. The entire carcass became more convenient and swift.Time is given immenseness in all specie transactions. The pecuniary system of India has shown a wide discern of resilience. It i s sheltered from crises triggered by external macro sparing shocks, which other East Asian countries oft suffered. This is all collectible to a pliable transform assess regime, the high contrary permute re litigate, the not-yet fully convertible outstanding account, and the limited distant trade pic of banks and their customers. In ancient India at that place is evidence of totals from theVedic period(beginning 1750 BC).Later during theMaurya dynasty(321 to 185 BC), an instrument called adesha was in social occasion, which was an order on a banker desiring him to endure the money of the note to a 3rd person, which corresponds to the definition of a bill of exchange as we understand it today. During the Buddhist period, on that point was considerable use of these instruments. Merchants in boastful towns gave letters of denotation to one another. colonial era During the colonial era merchants inCalcuttaestablished the Union rely in 1839, b atomic number 18ly i t failed in 1840 as a consequence of the sparing crisis of 1848-49.TheAllahabad desire, established in 1865 and alleviate functioning today, is the oldestJoint product line bankin India, it was not the first though. That honor belongs to the depose of Upper India, which was established in 1863, and which survived until 1913, when it failed, with some of its assets and liabilities being conveyred to the adherence patois of Shimla. Foreign banks too started to appear, particularly inCalcutta, in the 1860s. TheComptoir dEscompte de Paris exposed a branch in Calcutta in 1860, and another inBombayin 1862 branches inMadrasandPondicherry, thence a French possession, followed. HSBCestablished itself inBengalin 1869.Calcutta was the most active vocation port in India, mainly due to the shell out of theBritish Empire, and so became a banking center. The first entirely Indian correlative rip bank was the Oudh mercenary deposit, established in 1881 inFaizabad. It failed in 1958. The nigh was thePunjab bailiwick Bank, established inLahorein 1895, which has survived to the show and is now one of the self-aggrandizingst banks in India. Around the turn of the 20th Century, the Indian frugality was passing through a relative period of perceptual constancy. Around quintuplet decades had elapsed since theIndian Mutiny, and the social, industrial and other infrastructure had modify.Indians had established small banks, most of which served particular ethnic and religious communities. The judicature banks dominated banking in India precisely there were to a fault some exchange banks and a number of Indianjoint stockbanks. All these banks ope calculated in different segments of the economy. The exchange banks, mostly owned by Europeans, unvoiced on financing foreign trade. Indian joint stock banks were generally under capitalized and lacked the experience and maturity to compete with the presidency and exchange banks.This segmentation let ecclesiastic Cur zon to observe,In respect of banking it seems we atomic number 18 cig bette the prison terms. We argon like some old fashioned sailing ship, carve up by solid wooden bulkheads into separate and sticky compartments. The period between 1906 and 1911, saw the presidential term of banks shake by theSwadeshi causement. The Swadeshi movement inspired local choremen and political figures to imbed banks of and for the Indian community. A number of banks established then guard survived to the deport such(prenominal) asBank of India,Corpo symmetryn Bank,Indian Bank,Bank of Baroda,Canara Bankand heavy Bank of India.The fervour of Swadeshi movement go away to establishing of many non earth banks inDakshina KannadaandUdupi di exactwhich were integrated earlier and known by the designationSouth Canara( South Kanara ) district. Four nationalised banks started in this district and also a lead story backstage sector bank. Hence undivided Dakshina Kannada district is known as roc king chair of Indian Banking. During the number 1 domain of a function war(19141918) through the end of the momentond World War(19391945), and cardinal historic period thenceforth until the independenceof India were challenging for Indian banking.The courses of the First World War were turbulent, and it took its bell with banks simply collapsing despite theIndian economygaining indirect boost due to war-related scotch activities. At least 94 banks in India failed between 1913 and 1918 as indicated in the pastime table Years Number of banks authoritative capital Paid-up Capital that failed (Rs. Lakhs) (Rs.Lakhs) 1913 12 274 35 1914 42 710 109 1915 11 56 5 1916 13 231 4 1917 9 76 25 1918 7 209 1 Post-Independence Thepartition of Indiain 1947 adversely wedge the economies ofPunjabandWest Bengal, paralyzing banking activities for months. Indiasindependencemarked the end of a regime of theLaissez-fairefor the Indian banking. The organization of Indiainitiated measur es to play an active eccentric in the economic look of the nation, and the industrial Policy Resolution adopted by the government in 1948 ideated a change inte surfacey economy. This turn outed into great involvement of the state in different segments of the economy including banking and finance.The major go to regulate banking included ? The prevail Bank of India, Indias aboriginal banking authority, was established in April 1935, but was nationalized on January 1, 1949 under the toll of the allow for Bank of India ( communicate to Public Ownership) Act, 1948 ( rbi, 2005b). ? In 1949, the Banking regularization Act was enacted which empowered the reservation Bank of India (run batted in) to regulate, reassure, and inspect the banks in India. ? The Banking Regulation Act also leave behindd that no spic-and-span bank or branch of an existing bank could be opened without a permit from the rbi, and no deuce banks could have common directors. Nationalization in the 1960sD espite the provisions, control and regulations of adjudge Bank of India, banks in India except the differentiate Bank of Indiaor SBI, continued to be owned and operated by common soldier persons. By the 1960s, the Indian banking industry had become an strategic tool to facilitate the instruction of theIndian economy. At the same time, it had emerged as a large employer, and a debate had ensued rough the nationalization of the banking industry. Indra Gandhi, thenPrime look of India, ex conjureed the intention of the disposal of Indiain the annual conference of the All India relative Meeting in a account entitledStray thoughts on Bank Nationalization. The welcomeing have the paper with enthusiasm. Thereafter, her move was swift and sudden.The Government of India appeard an ordinance (Banking Companies (Acquisition and transferral of chthoniantakings) Ordinance, 1969)) and nationalizedthe 14 largest commercial banks with effect from the midnight of July 19, 1969. These bank s contained 85 percent of bank deposits in the country. 5Jayaprakash Narayan, a national leader of India, described the standard as amasterstroke of political sagacity. deep hatful two weeks of the issue of the ordinance, the Parliamentpassed the Banking Companies (Acquisition and Transfer of at a lower placetaking) Bill, and it received thepresidentialapproval on 9 August 1969. A second social disease of nationalization of 6 more commercial banks followed in 1980.The stated modestness for the nationalization was to give the government more control of deferred payment delivery. With the second dose of nationalization, the Government of India controlled near 91% of the banking business of India. Later on, in the course of study 1993, the government merged modernistic Bank of IndiawithPunjab National Bank. It was the only merger between nationalized banks and resolvinged in the reduction of the number of nationalized banks from 20 to 19. by and by this, until the 1990s, the nationalized banks grew at a pace of around 4%, secretiver to the average growth rate of the Indian economy. Liberalization in the 1990s In the early 1990s, the thenNarasimha Raogovernment embarked on a form _or_ system of government ofliberalization, licensing a small number of private banks.These came to be known asNew propagation tech-savvy banks, and included Global affirm Bank (the first of such new generation banks to be set up), which later amalgamated with Oriental Bank of Commerce,UTI Bank(since renamedAxis Bank),ICICI BankandHDFC Bank. This move, along with the rapid growing in theeconomy of India, correct the banking sector in India, which has seen rapid growth with strong contribution from all the three sectors of banks, namely, government banks, private banks and foreign banks. The followers(a) stage for the Indian banking has been set up with the proposed relaxation in the norms for Foreign mastermind Investment, where all Foreign Investors in banks white thorn be given voting rights which could fade the present cap of 10%,at present it has gone up to 74% with some restrictions. The new polity shook the Banking sector inIndiacompletely.Bankers, till this time, were used to the 4-6-4 regularity (Borrow at 4% Lend at 6% Go home at 4) of functioning. The new wave ushered in a modern outlook and tech-savvy methods of operative for tralatitious banks. All this led to the retail pan gravy in India. People not fitting demanded more from their banks but also received more. Current period By 2010, banking in India was generally fairly mature in price of add, product range and reach-even though reach in rural India still remains a challenge for the private sector and foreign banks. In terms of superior of assets and capital adequacy, Indian banks are considered to have clean, strong and transparent equilibrium sheets relative to other banks in comparable economies in its region.The defend Bank of India is an sovereign body, with minimal pressure from the government. The stated indemnity of the Bank on theIndian rupeeis to manage volatility but without any fixed exchange rate-and this has mostly been true. With the growth in the Indian economy evaluate to be strong for quite some time- particularly in its serve sector-the demand for banking service, especiallyretail banking, mortgages and set upment services are expected to be strong. One may also expect M, takeovers, and asset sales. In attest 2006, the take Bank of India allowedWarburg Pincusto affix its stake inKotak Mahindra Bank(a private sector bank) to 10%.This is the first time an investor has been allowed to hold more than 5% in a private sector bank since the run batted in announced norms in 2005 that any stake exceeding 5% in the private sector banks would pauperism to be vetted by them. In novel old age critics have charged that the non-government owned banks are too aggressive in their loan recovery efforts in connection with housin g, vehicle and personal loans. There are press reports that the banks loan recovery efforts have drive defaulting borrowers to suicide. relegate Bank of India & Its Subordinates pic 1. Introduction estate Bank of India(SBI) is abankingand monetary services beau monde ground in India.It is astate-ownedcorporation with its headquarters inMumbai, Maharashtra. As of March 2012, it had assets ofUS$360 billion and 14,119 branches, including 157 foreign offices in 32 countries across the macrocosm making it the largest banking and fiscal services company in India. The bank traces its ancestry toBritish India, through theImperial Bank of India, to the intro in 1806 of theBank of Calcutta, making it the oldest commercial bank in the Indian Subcontinent. Bank of Madras merged into the other two presidencies banksBank of Calcutta and Bank of Bombayto form the Imperial Bank of India, which in turn became the conjure Bank of India.TheGovernment of Indianationalized the Imperial Bank of India in 1955, with theReserve Bank of Indiataking a 60% stake, and renamed it the acres Bank of India. In 2008, the government took over the stake held by the Reserve Bank of India. SBI has been ranked 285th in theFortune Global 500rankings of the worlds biggest corporations for the yr 2012. SBI provides a range of banking products through its meshwork of branches in India and overseas, including products aimed atnon-resident Indians(NRIs). SBI has 14 regional hubs and 57 Zonal Offices that are located at all-important(a) cities throughout the country. SBI is a regional banking behemoth and has 20% grocery store share in deposits and loans among Indian commercial banks.The arouse Bank of India was named the 29th most reputed company in the world match toForbes2009 rankings and was the only bank featured in the top 10 brands of India list in an annual survey conducted by tick off FinanceandThe Economic Timesin 2010. invoice The roots of the order Bank of India lie in the first decade of 19th century, when theBank of Calcutta, later renamed theBank of Bengal, was established on 2 June 1806. The Bank of Bengal was one of three Presidency banks, the other two being theBank of Bombay ( corporate on 15 April 1840) and theBank of Madras(incorporated on 1 July 1843). All three Presidency banks were incorporated asjoint stock companiesand were the termination of theroyal charters. These three banks received the exclusive right to issue paper cash till 1861 when with the Paper Currency Act the right was taken over by the Government of India.The Presidency banks amalgamated on 27 January 1921, and the re-organized banking entity took as its nameImperial Bank of India. The Imperial Bank of India remained a joint stock company but without Government participation. Pursuant to the provisions of the fix Bank of India Act of 1955, theReserve Bank of India, which isIndias of import bank, acquired a despotic occupy in the Imperial Bank of India. On 30 April 1 955, the Imperial Bank of India became the severalise Bank of India. Thegovernment of Indiarecently acquired the Reserve Bank of Indias stake in SBI so as to remove any meshing of liaison because the RBI is the countrys banking regulatory authority.In 1959, the government passed the tell apart Bank of India (Subsidiary Banks) Act, which made octad state banks coadjutors of SBI. A process of consolidation began on 13 September 2008, when the acres Bank of Saurashtramerged with SBI. SBI has acquired local banks in rescues. The first was the Bank of Behar (est. 1911), which SBI acquired in 1969, in concert with its 28 branches. The next year SBI acquired National Bank of Lahore (est. 1942), which had 24 branches. v eld later, in 1975, SBI acquired Krishnaram Baldeo Bank, which had been established in 1916 inGwalior body politic, under the patronage of MaharajaMadho Rao Scindia. The bank had been the Dukan Pichadi, a small moneylender, owned by the Maharaja. The new banks firs t manager was Jall N. Broacha, a Parsi.In 1985, SBI acquired the Bank of Cochin inKerala, which had one hundred twenty branches. SBI was the acquirer as its affiliate, the plead Bank of Travancore, already had an extensive network in Kerala. 2. agree banks SBI has fin yoke banks all use the res publica Bank of India logo, which is a gentle circle, and all use the State Bank of name, followed by the regional headquarters name ? State Bank of Bikaner & Jaipur ? State Bank of Hyderabad ? State Bank of Mysore ? State Bank of Patiala ? State Bank of Travancore Earlier SBI had seven feller banks, all of which had belonged toprincely statesuntil the government nationalised them between October 1959 and May 1960.In tune with the first Five Year Plan, which prioritized the emergence of rural India, the government integrated these banks into State Bank of India system to expand its rural outreach. There has been a proposal to merge all the associate banks into SBI to create a mega ban k and streamline the groups trading operations. The first measurement towards unification occurred on 13 August 2008 whenState Bank of Saurashtramerged with SBI, reducing the number of associate state banks from seven to six. Then on 19 June 2009 the SBI come along approved the acculturation ofState Bank of Indore. SBI holds 98. 3% in State Bank of Indore. (Individuals who held the shares prior to its takeover by the government hold the equaliser of 1. 77%. ) The acquisition of State Bank of Indore added 470 branches to SBIs existing network of branches.Also, following the acquisition, SBIs hail assets go away inch very close to thepic10 trillion marks. The total assets of SBI and theState Bank of Indorestood atpic9,981,190 million as of March 2009. The process of merging of State Bank of Indore was completed by April 2010, and the SBI Indore branches started functioning as SBI branches on 26 August 2010. Non-banking subsidiaries obscure from its five associate banks, SBI al so has the following non-banking subsidiaries ? SBI Capital MarketsLtd ? SBI Funds Management Pvt Ltd ? SBI Factors & mercenary function Pvt Ltd ? SBI Cards& Payments Services Pvt. Ltd. (SBICPSL) ? SBI DFHI Ltd ? SBI liveness indemnification Co. Ltd. ? SBI General InsuranceIn March 2001, SBI (with 74% of the total capital), joined withBNP Paribas(with 26% of the stay capital), to form a joint pretend life policy company named SBI behavior Insurance company Ltd. Nowadays, SBI demeanor Insurance Co. Ltd ranks among the top and most trusted Life Insurance Companies in India and also abroad. In 2004, SBI DFHI Ltd. (DISCOUNT AND FINANCE HOUSE OF INDIA) was founded with its headquarters in MUMBAI, MAHARASHTRA. SBIDFHI Ltd. is a primary aimer that trades in Fixed income securities (treasury bills, state culture loans, government securities, non SLR bonds, corporate bonds) and Short Term bills Market instruments (certificates of deposit, commercial papers, inter-corporate deposits , call and money notice deposits).It is an intro formed by RBI to support the book building process in primary auctions of Government securities and to provide necessary depth and liquid stateness to the secondary merchandise in Government securities. Reserve Bank of India pic TheReserve Bank of India(RBI) is Indiascommutation bankinginstitution, which controls the financial policyof theIndian rupee. It was established on 1 April 1935 during theBritish Rajin treaty with the provisions of the Reserve Bank of India Act, 1934. The share capital was divided into shares of ? 100 each fully paid which was entirely owned by private shareholders in the beginning. Following Indias independence in 1947, the RBI was nationalised in the year 1949. The RBI plays an important part in the development strategy of theGovernment of India. It is a process bank of theAsian Clearing Union.The general control and direction of the RBI is entrusted with the 21-member-strong primeval bill of fare of handlerstheGovernor(currentlyDuvvuri Subbarao), quartet Deputy Governors, twoFinance Ministryrepresentative, ten Government-nominated coachs to represent important elements from Indias economy, and four directors to represent Local ages headquartered at Mumbai, Kolkata, Chennai and New Delhi. Each of these Local Boards constitute of five members who represent regional posts, as strong as the interests of co-operative and indigenous banks. 1. twist central Board of music directors The Central Board of Directors is the main committee of the central bank. TheGovernment of Indiaappoints the directors for a four-year term. The Board consists of a governor, four deputy governors, fifteen directors to represent the regional boards, one from the Ministry of Finance and ten other directors from various fields. Governors The current Governor of RBI isDuvvuri Subbarao.The RBI extended the period of the present governor up to 2013. There are four deputy governors. Supportive bodie s The Reserve Bank of India has ten regional representations compass north in New Delhi, South in Chennai, East in Kolkata and West in Mumbai. The representations are formed by five members, appointed for four years by the central government and servebeside the advice of the Central Board of Directorsas a group meeting place for regional banks and to deal with delegated tasks from the central board. The institution has 22 regional offices. TheBoard of monetary Supervision(BFS), formed in November 1994, serves as a CCBD committee to control the financial institutions.It has four members, appointed for two years, and takes measures to power the role of statutory auditors in the financial sector, external monitoring and internal controlling systems. Offices and branches The Reserve Bank of India has 4 zonary offices. It has 19 regional offices at most state capitals and at a fewer major cities in India. Few of them are located inAhmedabad, Bangalore,Bhopal,Bhubaneswar,Chandigarh ,Chennai,Delhi,Guwahati, Hyderabad Jaipur,Jammu,Kanpur,Kolkata,Lucknow,Mumbai,Nagpur,Patna,andThiruvananthapuram. Besides it has 09 sub-offices. 2. History 19351950 The Reserve Bank of India was founded on 1 April 1935 to respond to economic troubles after theFirst World War. It came into picture according to the guidelines place down byDr. Ambedkar.RBI was conceptualized as per the guidelines, working style and outlook presented by Dr Ambedkar in front of the Hilton Young Commission. When this commission came to India under the name of Royal Commission on Indian Currency & Finance, each and any member of this commission were place Dr Ambedkars book named The Problem of the rupee Its origin and its solution. The Bank was set up based on the recommendations of the 1926 Royal Commission on Indian Currency and Finance, also known as the HiltonYoung Commission. The original choice for the pestle of RBI was The East India Company twice Mohur, with the sketch of the Lion and Palm Tre e. withal it was decided to replace the lion with the tiger, the national animal of India.The Preamble of the RBI describes its elemental functions to regulate the issue of bank notes, handgrip reserves to secure monetary constancy in India, and generally to operate the bills and creed system in the beaver interests of the country. The Central Office of the RBI was initially established in Calcutta (now Kolkata), but was for good moved to Bombay (now Mumbai) in 1937. The RBI also acted as Burmas central bank, except during the years of theJapanese occupation of Burma(194245), until April 1947, even though Burma seceded from the Indian Union in 1937. aft(prenominal) thePartition of Indiain 1947, the Bank served as the central bank forPakistanuntil June 1948 when theState Bank of Pakistancommenced operations.Though originally set up as a shareholders bank, the RBI has been fully owned by theGovernment of Indiasince its nationalization in 1949. 19501960 In the 1950s, the India n government, under its first Prime MinisterJawaharlal Nehru, developed a centrally programmened economic policy that focused on the country sector. The administration nationalized commercial banks and established, based on the Banking Companies Act of 1949 (later called the Banking Regulation Act), a central bank regulation as part of the RBI. Furthermore, the central bank was ordered to support the economic plan with loans. 19601969 As a result of bank crashes, the RBI was orisoned to establish and monitor a deposit insurance system.It should restore the trust in the national bank system and was initialized on 7 December 1961. The Indian government founded funds to call forth the economy and used the shibboleth Developing Banking. The Government of India restructured the national bank market and nationalized a spread of imparts. As a result, the RBI had to play the central part of control and support of this public banking sector. 19691985 In 1969, theIndira Gandhi-headed g overnment nationalized 14 major commercial banks. Upon Gandhis return to power in 1980, a further six banks were nationalized. The regulation of the economy and especially the financial sector was repayd by the Government of India in the 1970s and 1980s.The central bank became the central player and accessiond its policies for a plenteousness of tasks like interests, reserve ratio and panoptic deposits. These measures aimed at better economic development and had a huge effect on the company policy of the grounds. The banks lent money in selected sectors, like agri-business and small trade companies. The branch was forced to establish two new offices in the country for every newly established office in a town. Theoil crisesin 1973 resulted in increasinginflation, and the RBI restricted monetary policy to reduce the effects. 19851991 A lot of committees analysed the Indian economy between 1985 and 1991. Their results had an effect on the RBI. TheBoard for Industrial and Financial Reconstruction, theIndira Gandhi show of Development Researchand theSecurity & deputise Board of Indiainvestigated the national economy as a full-page, and the security and exchange board proposed better methods for more effective markets and the auspices of investor interests. The Indian financial market was a leading example for so-called financial repression (Mackinnon and Shaw). TheDiscount and Finance House of Indiabegan its operations on the monetary market in April 1988 theNational Housing Bank, founded in July 1988, was forced to invest in the property market and a new financial law improved the versatility of direct deposit by more security measures and liberalisation. 19912000 The national economy came down in July 1991 and the Indian rupee was de judged.The gold lost 18% relative to theUS dollar, and theNarsimahmam Committee informed restructuring the financial sector by a temporal trim back reserve ratio as well as the statutory fluidness ratio. New guidelines wer e published in 1993 to establish a private banking sector. This turning point should reinforce the market and was often calledneo-liberal. The central bank deregulated bank interests and some sectors of the financial market like the trust and property markets. This first phase was a success and the central government forced a potpourri liberalisation to metamorphose owner structures in 1998. TheNational Stock Exchange of Indiatook the trade on in June 1994 and the RBI allowed nationalized banks in July to interact with the capital market to reinforce their capital base.The central bank founded a subsidiary companytheBharatiya Reserve Bank Note Mudran Limitedin February 1995 to introduce banknotes. Since 2000 TheForeign Exchange Management Actfrom 1999 came into force in June 2000. It should improve the foreign exchange market, international investments in India and transactions. The RBI promoted the development of the financial market in the nett years, allowedonline bankingin 2 001 and established a new compensation system in 20042005 (National Electronic Fund Transfer). TheSecurity notion & Minting can of India Ltd. , a merger of cardinal institutions, was founded in 2006 and produces banknotes and coins.The national economys growth rate came down to 5. 8% in the stand quarter of 20082009and the central bank promotes the economic development. Main functions Bank of Issue Under Section 22 of the Reserve Bank of India Act, the Bank has the sole right to issue bank notes of all denominations. The distribution of one rupee notes and coins and small coins all over the country is undertaken by the Reserve Bank as agent of the Government. The Reserve Bank has a separate Issue department which is entrusted with the issue of silver notes. The assets and liabilities of the Issue discussion section are kept separate from those of the Banking Department. monetary authorityThe Reserve Bank of India is the main monetary authority of the country and beside that the central bank acts as the bank of the national and state governments. It formulates implements and monitors the monetary policy as well as it has to ensure an adequate tend of credit to productive sectors. Regulator and executive program of the financial system The institution is also the regulator and supervisor of the financial system and enjoins broad parameters of banking operations within which the countrys banking and financial system functions. Its objectives are to maintain public confidence in the system, protect depositors interest and provide constitute-effective banking services to the public.TheBanking Ombudsman shunninghas been formulated by the Reserve Bank of India (RBI) for effective addressing of complaints by bank customers. The RBI controls the monetary append, monitors economic indicators like theproduct and has to decide the design of the rupee banknotes as well as coins. Managerial of exchange control The central bank manages to reach the goals of th e Foreign Exchange Management Act, 1999. documentary to facilitate external trade and payment and promote orderly development and nutriment of foreign exchange market in India. Issuer of property The bank issues and exchanges or destroys currency notes and coins that are not fit for circulation.The objectives are giving the public adequate supply of currency of good quality and to provide loans tocommercial banksto maintain or improve the GDP. The basic objectives of RBI are to issue bank notes, to maintain the currency and credit system of the country to utilize it in its best advantage, and to maintain the reserves. RBI maintains the economic structure of the country so that it tail assembly achieve the objective of price stability as well as economic development, because both objectives are diverse in themselves. Banker of Banks RBI also works as a central bank where commercial banks are account holders and can deposit money. RBI maintains banking accounts of all schedule ba nks. Commercial banks create credit.It is the duty of the RBI to control the credit through the CRR, bank rate and open market operations. As bankers bank, the RBI facilitates the clearing of cheques between the commercial banks and helps inter-bank transfer of funds. It can give financial accommodation to schedule banks. It acts as the lender of the last resort by providing emergency advances to the banks. It supervises the functioning of the commercial banks and take action against it if need arises. Detection of Fake currency In order to curb the fake currency menace, RBI has launched a website to raise knowingness among masses about fake notes in the market. pic pic Policy grade and reserve ratiosBank tell RBI lends to the commercial banks through its rabbet window to help the banks meet depositors demands and reserve demands for long term. The Interest rate the RBI charges the banks for this purpose is called bank rate. If the RBI wants to ontogeny the fluidity and money supply in the market, it entrust decline the bank rate and if RBI wants to reduce the liquidity and money supply in the system, it get out increase the bank rate. As of 25 June 2012 the bank rate was 8. 0%. up-to-the-minute bank rate is 7. 75% as on 29/01/2013. Reserve requirement cash reserve ratio (CRR) all(prenominal) commercial bank has to clench accredited minimum cash reserves with RBI.Consequent upon amendment to sub-Section 42(1), the Reserve Bank, having regard to the inevitably of securing the monetary stability in the country, RBI can prescribe Cash Reserve ratio (CRR) for scheduled banks without any floor rate or ceiling rate, Before the enactment of this amendment, in terms ofSection 42(1) of the RBI Act, the Reserve Bank could prescribe CRR for scheduled banks between 5% and 20% of total of their demand and time liabilities. RBI uses this tool to increase or decrease the reserve requirement depending on whether it wants to effect a decrease or an increase in t he money supply. An increase in Cash Reserve Ratio (CRR) result make it mandatory on the part of the banks to hold a large proportion of their deposits in the form of deposits with the RBI. This give reduce the size of their deposits and they will lend less. This will in turn decrease the money supply. The current rate is 4. 75%. ( As a Reduction in CRR by 0. 25% as on Date- 17 September 2012). -25 basis points cut in Cash ReserveRatio(CRR) on 17 September 2012, It will release Rs 17,000 crore into the system/Market. The RBI lowered the CRR by 25 basis points to 4. 25% on 30 October 2012, a move it said would come in about 175 billion rupees into the banking system in order to pre-empt potentially change liquidity. The latest CRR as on 29/01/13 is 4% Statutory runniness ratio (SLR) Apart from the CRR, banks are infallible to maintain liquid assets in the form of gold, cash and approved securities. Higher liquidity ratio forces commercial banks to maintain a larger proportion o f their resources in liquid form and thus reduces their capacity to grant loans and advances, thus it is an anti-inflationary impact.A higher liquidity ratio diverts the bank funds from loans and advances to investment in government and approved securities. IN new(prenominal) WORDS ITS A TOOL standardized TO CRR BUT AT HIGHER balance In well-developed economies, central banks use open market operationsbuying and sell of eligible securities by central bank in the money marketto diverge the volume of cash reserves with commercial banks and thus influence the volume of loans and advances they can make to the commercial and industrial sectors. In the open money market, government securities are traded at market related rates of interest. The RBI is resorting more to open market operations in the more recent years.Generally RBI uses three kinds of selective credit controls 1. Minimum margins for lending against specific securities. 2. chapiter on the amounts of credit for certain pu rposes. 3. prejudiced rate of interest charged on certain types of advances. Direct credit controls in India are of three types 1. Part of the interest rate structure i. e. on small savings and provident funds, are administratively set. 2. Banks are mandatory required to keep 23% of their deposits in the form of government securities. 3. Banks are required to lend to the anteriority sectors to the extent of 40% of their advances. Punjab State Co-Operative Bank pic 1. Introduction picWelcome toThe Punjab State conjunctive Bank Ltd. (PSCB) Experience a full-page new Era of Banking Technology. Where banking is made easier and convenient for our customers. The Punjab State conjunctive Bank provides you with the New Generation banking architecture to progress in the future day in an evolutionary manner. Punjab State reconciling Bank (PSCB) is customer centric. 2. History The Punjab State conjunctive Bank was established on 31st August, 1949 at Shimla vide registration No. 720 has a principle financing institution of the reconciling movement in Punjab. In 1951 its Head Office was shifted to Ja territoryhar from where it moved in 1963 to its present building at Chandigarh.In the concerted Banking structure, the position of the Punjab State conjunctive Bank is extremely important as the whole credit system revolves around it. It has 19 branches and 1 accessory counters in Chandigarh. There are 20 District Central conjunct Banks having 804 branches all over Punjab, mostly in rural areas of the State. 3. Profile THE PUNJAB conjure COOPERATIVE BANK LTD. CHANDIGARH ORGANISATION The Punjab State conjunct Bank Chandigarhwas established on 31 August 1949 at shimla vides fitting No. 720 as a pass financing institution of the accommodating movement in the state.It has 19 branches and 1 extension counters in the city of Chandigarh. 20 Central Cooperative Banks having 786 branches and 18 Extension Counters in the State of Punjab are affiliated with the ba nk. In the Cooperative banking structure the position of the Punjab State Coop Bank is extremely important as a the whole short(p) term credit system revolves around it. This bank ensures that its member central joint banks follow sound banking practices and observe strict financial discipline. The Central Cooperative Banks are financing the farmers through PACS at the resolution Level. There is no arena of life where this premier institution has not play its part. From a farmer, artisan to traders/businessman, everybody has been covered in the fold of this institution. The green, white and sweet revolutions in the state of Punjab are some of the major achievement in which this institution has plays a vital role. The Punjab State Cooperative Bank has already been awarded BEST PERFORMANCE distribute from NABARD and NAFSCOB. For the year 2003-04, Punjab Cooperative Bank has been selected for NABARDs beat out achievement yield which is based on action of all the SCBs in the country. Similarly our Jalandhar DCCB has also been selected for NABARDs Best Performance Award out of all the DCCBs in the country for the year 2003-04. OBJECTIVES To serve as a Balancing sum for Cooperative Societies in the State for Cooperative Societies in the State of Punjab registered under the Punjab Cooperative Societies Ac, 1961 for the time being in force. To promote the economic interest of the member banks and conjunctive societies in the state in accordance with cooperative principles and to facilitate the development and financial support of any cooperative society registered under the said act. To carry on banking and credit business. MANAGEMENT The present Board of Directors was constituted in May 2005. Now the trouble of the bank is being looking after by the elected BOD. 4.Organization pic 5. Board of Directors SNO ca-ca Designation Contact No. manoeuver 1. Sh. Avtar Singh Zira Chairman 0172-5067035 Makhu Road,VPO Zira, S/o Sh. Hari Singh Distt Ferozepure Zira 2. Sh. Milap Singh S/o Director 98147-83077 Khajanewala house,Gobind Nagar,SW Road Sh.Jasbir Singh Amritsar 3. Sh. Gurpreet Singh Director 94172-3778 95, Model Town ,Phase 3 ,Bhatinda Maluka S/o Sh. Sikander Singh Maluka 4. Sh. Baljit Singh Director 97803-00916 VPO Salempur P. O Bras, Bhutta S/o Sh Baldev Distt.Fathegarh Sahib Singh 5. Sh. Ravikiran Singh Director 97804-00002 H. No 649, Basant Avenue, Kahlon S/o Sh. 97819-00001 Amritsar Nirmal Singh Kahlon 6. Sh. Satwinderpal SinghDirector 98761-08332 Village Ramdaspur, Dhat S/o Sh. Mohan The.Dasuha, Singh Distt. Hoshiarpur 7. Sh. Harjit Singh Director 98140-57531 Khothran Road , Parmar S/o Sh. Near J. C. T MillPhagwara , Gurbachan Singh Parmar Kapurthala 8. Sh. Tajinder Singh Director 97806-00019 VPO Mithukhera , Mithukhera S/o Sh. Malot, Gurnam Singh Distt. Muktsar 9. Sh. Dildar Singh S/o Director 95925-83101 Vill. Majra Kalan, P. O. Jadlan , Sh. Ranjit Singh Distt. Nawanshahr 10. Sh. Jarnail Singh S/o Director 97800-32206 VPO Kartarpur, Charaso, Distt. Patiala Sh. Hajara Singh 11. Sh.Baldev Singh S/o Director 94631-47642 VPO Chakla, Chamakaur Sahib, Distt. Ropar Sh. Gurnam Singh 12. Sh. Baljit Singh Director 99889-10417 H. NO. 621, WardNo. 11 , DerraBassi, Distt. Karkaur S/o Sh. Gurdev Mohali Singh 13. Sh. Kanwaljeet Singh Director 97799-15100 H.No 7/250, Shastri Nagar , Batala , Distt. S/o Sh. Raghbir Singh Gurdaspur 14. Sh. Sukhdarshan Singh Director 98765-61261 The Punjab State cooperztive Agriculture Marar, S/o Sh. Narayan Development Bank Ltd. , Sec 17 B , Singh Chandigarh 15. CGM, NABARD 5071431,2604608 Plot No. 3, Sector-34 A , Candigarh. 16. Financial 2742771 Cooperation Dept. Commissioner genteel Sectt , Cooperation, Punjab Punjab Chandigarh 17. Principal Sectary Finance 18. Registrar, 5046814 RCS , Punjab , Cooperative Sector-17 Bays B uilding , Societies, Punjab Chandigarh 19. Sh. Kamaljeet Singh Managing Director 5061404 Punjab State Coop. Bank Ltd. Sangha PSCB Chandigarh SCO 175-187, Sector-34A, Chandigarh. 6. AWARDS & ACHIEVEMENTS AWARDS The Punjab State Cooperative Bank has already been awarded BEST PERFORMANCE AWARD from NABARD and NAFSCOB. For the year 2003-04, Punjab Cooperative Bank has been selected for NABARDs Best Performance Award which is based on performance of all the SCBs in the country. Similarly our Jalandhar DCCB has also been selected for NABARDs Best Performance Award out of all the DCCBs in the country for the year 2003-04. ACHIEVEMENTS S. T. AGRI.LOAN The Cooperative Banks in the State have go Rs. 7536. 33 Crores as ST Agri. Loan during the year 2009-10 as compared to Rs. 5894. 28 crore during 2008-09. Similarly during 2010-11, Rs 8497. 15 crores stand disbursed. Against the come in of Rs. 8300. 00 Crores. R. C. C. LIMIT During 2009-10 the Central C oop. Banks in Punjab have sanctioned R. C. C limits worth Rs. 2296. 62 croresas compared to Rs. 2091. 75 crore of 2008-09.During the year 2010-11 the bank has sanctioned RCC limits worth Rs. 2460. 79 crore. twain WHEELER LOANS TO AGRICULTURISTS Under Two wheel horse Loan Scheme the farmers can take loan up to 75% of two-wheelers cost or Rs. 50,000/- whichever is lower from the Central Cooperative Banks. During the year 2009-10, the Bank has advanced a sum of Rs. 32. 67 crore. Similarly, during 2010-11, Rs. 29. 70 crore has been advanced against the soft touch of Rs. 40. 00 crore. HOUSING LOANS During the year 2008-09 Central Cooperative Banks in the State have advanced Rs. 90. 66 Crores against the target area of Rs. 80. 00 crores. During 2009-10, Rs. 86. 64 crores has been disbursed against the target of Rs. 110. 00 crore. During 2010-11 Rs. 84. 56 crore has been disbursed . NON uprise SECTOR LOANS During 2008-09 Rs 47. 72 crores were advanced under the schem e by DCCBs in the State of Punjab. During the year 2009-10, Rs. 48. 84 crores has been advanced. Similarly during 2010-11, Rs. 41. 93 crore has been advanced against the target of Rs. 55. 00 crore. LOAN FOR CONSUMER durable goods UnderConsumerDurables Loan Scheme, Rs. 79. 62 croreshas been advanced during 2009-10. Similarly, during 2010-11, Rs. 78. 25 crore has been advanced against the target of Rs. 80. 00 Crores . PERSONAL LOAN SCHEME Under Personal Loan Scheme, the Bank has advanced Rs. 143. 58 crore during the year 2009-10 against the target of Rs. 125. 00 crore. During 2010-11, Rs. 62. 41 crore has been disbursedagainst the target of Rs. 150. 00 crore. DEPOSIT MOBILIZATION The deposit of Punjab State Coop. Bank and Central Cooperative Banks were Rs. 9819. 09 crores during the year 2009-10. During the year 2010-11 the deposits are Rs. 10684. 54 crore. PROFITS During 2010-11, there was a net income Rs. 65. 17 crore whereas 2 DCCB, namely Faridkot and Man sa were in loss. REDUCTION IN THE RATE OF matter to Rate of Interest on garment Loan has been reduced to 7. 00% w. e. f. 01-04-2006. 7. Future mean and mass Future Perspective Cooperatives are not unaffected by structural adjustments and globalization of commodity market. As a result, Cooperative Banks are required to redesign their strategies for sustainability and growth. The economic reforms initiated by the government of India in 1991 have affected the Financial Institutions ncluding the Cooperative Financial Institutions. These reforms aim at liberalization and deregulation of Indian economy. The Cooperative Banks of Punjab have accepted the reforms in Indian economy, especially, the financial reforms in right spirit. Since these Banks have mainly been providing credit to agriculture sector, changes in plain economy affect them more closely. The Banks envisage following scenario as a result of liberalized unpolished policy Liberalization of rural policy wou ld result in greater capital intensity and borrowed capital requirements of agriculturists.In order to induce diversification and produce quality products for international market. For this purpose, Punjab farmers would need greater credit support for improved technology, seeds and agro-inputs. Liberalized agricultural policy would reverse the process of fragmentation of land holdings and would result in exodus of utilisation opportunities from agricultural sector to other sectors of economy. such as small business enterprises, services and industrial sector. Liberalization of agriculture would professionalize and modernize agriculture, thereby earning a shape of industry get outing high skilled professionals in agriculture sector. Liberalized agricultural economy would lead to a greater role of private research and development institutions in up(a) the productivity and quality of agricultural operations. The liberalized agricultural policy would result in greater ga rget on value growth in agriculture. Therefore, a great deal of thrust would be on agro-processing units. The liberalized agricultural policy would bring greater thrust on export of raw and value added agro-products. The liberalized agricultural economy would lead to sowing/ lay of new crops. Leading to a great deal of crop diversification. With this perspective, the Cooperative credit Policy, both for short-term and long term requirements of the farmers, demand to be restructured.Accordingly, the Cooperative Banks in the State resolve to pursue credit policy in keeping with the following. Vision ? We will force the future challenges with grit and take every possible step for the development of our institution. ? More steps will be taken to provide streamlined services. ? Present customers will be maintained and other customers will be attracted to increase market share. ? Bank will attract maximal deposit (especially low cost deposit) to strengthen its financial resour ces so as to reduce its dependency upon NABARD. ? Bank slice diversifying its loan portfolio will provide sensitive term and long term loans to the maximum extent. Every effort will be made to open account of all the farmers of the State. Bank will receive deposits from Farmers and meet all their credit needs. ? Bank, for the sake of development of State, will strive hard to provide maximum and better services to customers especially farmers and for this wherever necessary, every effort will be made to modify the schemes. ? Bank will prepare its business plan every year and by implementing it, goals set will be achieved. ? Bank will professionalize and modernize the business. 8. Training centralise pic Introduction Agriculturecooperative mental efficiency Training Institute in the State of Punjab was established in 1986 by the Punjab State Cooperative Bank Ltd.With the Financial avail from National Cooperative Development Corporation Under World Bank NCDC Project. The main aim of setting up this name was to provide breeding to the faculty and committee members as well as upbringing to the ordinary members of the Primary Agricultural Services Societies (PACS) during the project period of 5 years. aft(prenominal) successfully completion of the Project the institute started catering to the formulation needs of the whole short term credit cooperative in Punjab particularly cooperative banks from 2001. The institute is caterpillar track various instruction programmed for different categories of ply of cooperative bank.The Punjab State Cooperative Bank is giving high priority for the training of its staff as well as staff of its member banks. The institute is getting full support from the bank in the field of training. The institute is acting for the development of a cadre of professional bankers to meet the challenges of changing banking scenario. Since 1991, there has been tremendous change in banking sector which had affected cooperative bank to a great extent. The Tara focalize Committee, Narsimham Committee and Vaidyanathan Committee recommendations have put profound challenges to cooperative banks. The technological changes in the banking sector are also touch these banks.This institute is aware of these transformations and has geared up its training plans. The training institute of Cooperative banks cannot remain passive but mustiness play an active role in providing consultancy, latest knowledge and skills to cooperative banks. acting as a catalyst in the change process, this institute has decided to diversify its activities to face the challenge of time. Objective ? sensitising the banks of the challenges ahead and to prepare the employees to meet these challenges ? Improving the running(a) efficiency of cooperative bank. ? Building up the managerial and leadership abilities among the officers for organizational effectiveness. educational activity NEEDS ASSESSMENTThis institute assesses the training needs of the staff in the following ways. 1. forecast of the latest Development Latest developments in economic and banking sectors (Capital Adequacy Norms, Asset obligation Management, Prudential Norms, and Recommendation of various Committees) are considered as Training requirement. 2. Demand from Central Cooperative Banks Various central cooperative banks at different occasions come up the institute to provide training to their staff in specific area. On the request of those banks the institute conducts field programmers as per the gubbins of the client banks. 3. Policy matters of Management The institute keeps in touch with the olicy decision of the Reserve Bank of India, NABARD central Government RCS and apex of the suns way Bank Management, Institute develops and organizes training programmed for effectives execution of instrument of these decisions. 4. Faculty Members Visit Faculty member of this institute frequently visit cooperative banks at different intervals to study operable problems of the banks and to identify the training needs of the staff. 5. examine Reports and Inspection Reports These reports do provide helpful indication for the training needs in banks. We continuously study these reports to find out procedural gaps and problems of the banks. COURSE DESIGN The training programmers are designed by conducting a critical analysis of training needs of Bank Staff.Each member of faculty is advised to design at least two training programmers in a year. The training programmed along with detailed course confine prepared by them is then discussed in a faculty meeting. In this meeting the members of faculty meeting. In this meeting the members of faculty share thei