Commerical Banking | Macro Economics - B Com PDF Download

 Page 1


Banking
Page 2


Banking
Banking
Banking Regulation Act of India, 1949 defines
Banking as “accepting, for the purpose of lending or of
investment of deposits of money from the public,
repayable on demand or otherwise or withdrawable by
cheque, draft order or otherwise.” The Reserve Bank of
India Act, 1934 and the Banking Regulation Act, 1949,
govern the banking operations in India.
Page 3


Banking
Banking
Banking Regulation Act of India, 1949 defines
Banking as “accepting, for the purpose of lending or of
investment of deposits of money from the public,
repayable on demand or otherwise or withdrawable by
cheque, draft order or otherwise.” The Reserve Bank of
India Act, 1934 and the Banking Regulation Act, 1949,
govern the banking operations in India.
Banking Structure in India
• A well-regulated banking system is a key comfort for
local and foreign stake-holders in any country. Prudent
banking regulation is recognized as one of the reasons
why India was less affected by the global financial
crisis.
• Banks can be broadly categorized as Commercial
Banks or Co-operative Banks.
• Banks which meet specific criteria are included in the
second schedule of the RBI Act, 1934. These are called
scheduled banks. They may be commercial banks or co-
operative banks. Scheduled banks are considered to be
safer, and are entitled to special facilities like re-finance
from RBI. Inclusion in the schedule also comes with its
responsibilities of reporting to RBI and maintaining a
percentage of its demand and time liabilities as Cash
Reserve Ratio (CRR) with RBI.
Page 4


Banking
Banking
Banking Regulation Act of India, 1949 defines
Banking as “accepting, for the purpose of lending or of
investment of deposits of money from the public,
repayable on demand or otherwise or withdrawable by
cheque, draft order or otherwise.” The Reserve Bank of
India Act, 1934 and the Banking Regulation Act, 1949,
govern the banking operations in India.
Banking Structure in India
• A well-regulated banking system is a key comfort for
local and foreign stake-holders in any country. Prudent
banking regulation is recognized as one of the reasons
why India was less affected by the global financial
crisis.
• Banks can be broadly categorized as Commercial
Banks or Co-operative Banks.
• Banks which meet specific criteria are included in the
second schedule of the RBI Act, 1934. These are called
scheduled banks. They may be commercial banks or co-
operative banks. Scheduled banks are considered to be
safer, and are entitled to special facilities like re-finance
from RBI. Inclusion in the schedule also comes with its
responsibilities of reporting to RBI and maintaining a
percentage of its demand and time liabilities as Cash
Reserve Ratio (CRR) with RBI.
Structure of Banks in India
Page 5


Banking
Banking
Banking Regulation Act of India, 1949 defines
Banking as “accepting, for the purpose of lending or of
investment of deposits of money from the public,
repayable on demand or otherwise or withdrawable by
cheque, draft order or otherwise.” The Reserve Bank of
India Act, 1934 and the Banking Regulation Act, 1949,
govern the banking operations in India.
Banking Structure in India
• A well-regulated banking system is a key comfort for
local and foreign stake-holders in any country. Prudent
banking regulation is recognized as one of the reasons
why India was less affected by the global financial
crisis.
• Banks can be broadly categorized as Commercial
Banks or Co-operative Banks.
• Banks which meet specific criteria are included in the
second schedule of the RBI Act, 1934. These are called
scheduled banks. They may be commercial banks or co-
operative banks. Scheduled banks are considered to be
safer, and are entitled to special facilities like re-finance
from RBI. Inclusion in the schedule also comes with its
responsibilities of reporting to RBI and maintaining a
percentage of its demand and time liabilities as Cash
Reserve Ratio (CRR) with RBI.
Structure of Banks in India
Broad Classification of Banks in 
India
1) The RBI: The RBI is the supreme monetary and banking authority
in the country and has the responsibility to control the banking
system in the country. It keeps the reserves of all scheduled banks
and hence is known as the “Reserve Bank”.
2) Public Sector Banks:
? State Bank of India and its Associates (8)
? Nationalized Banks (19)
? Regional Rural Banks Sponsored by Public Sector Banks (196)
3) Private Sector Banks:
? Old Generation Private Banks (22)
? Foreign New Generation Private Banks (8)
? Banks in India (40)