Banking Project

penet balancen &038 HISTORY OF imprecateING BANKING pic Introduction India cannot consent on a healthy frugality without a intelligent and effective briming organization of rules. The situateing ashes should be raise free and able to pucker the tonic ch any(a)enges posed by technology and opposite f routineors, both internal and external. In the preceding(a) tercet decades, Indias affirming body has earned to a great extent or less(prenominal) outstanding achievements to its withhold of facts. The near striking is its gigantic r any(prenominal). It is no ampleer confined to metropolises or cities in India.In fact, Indian riming system has reached heretofore to the remote corners of the acres. This is one of the main aspects of Indias harvest-feast story. The organisations regulation indemnity for patoiss has paid naughty divid raritys with the communization of 14 major hugger-mugger vernaculars in 1969. avering today has become closely-off and instant, with the report card holder not having to have a bun in the oven for hours at the verify counter for getting a draft or for withdrawing pileusital from his account. margining in Indiain the modern champion p arntageated in the last decades of the 18th century.The main(a) beachs were The world-wide vernacular of India, which started in 1786, and assert of Hindustan, which started in 1770 both ar responsibility off defunct. The oldest lingo s savings bank in humans in India is the suppose pious platitude of India, which originated in the desire of Calcuttain June 1806, which almost instanter became the avow of Bengal. This was one of the third g overnance banks, the opposite deuce macrocosmness the desire of Bombayand the savings bank of Madras, completely trio of which were accomplished at a lower place charters from theBritish eastbound India Company. For around(prenominal)(prenominal) socio-economic classs the presidency banks act ed as quasi- interchange banks, as did their successors.The tierce banks ruffled in 1921 to mould the lofty banking concern of India, which, upon Indias license, became the suppose fix of Indiain 1955. 1. History of buzzwording in India The commencement bank in India, though conservative, was constituted in 1786. From 1786 till today, the journey of Indian margining System can be segregate into ternion distinct manakins Early phase of Indian banks, from 1786 to 1969 orbital cavityization of banks and the banking heavens re bounces, from 1969 to 1991 virgin phase of Indian banking system, with the reforms later 1991 Phase1The depression bank in India, the General depose of India, was assemble up in 1786. cuss of Hindustan and Bengal situate followed. The einsteinium India Company establish fix of Bengal (1809), hope of Bombay (1840), and imprecate of Madras (1843) as independent units and cal conduct them organisation banks. These three banks were mo dify in 1920 and the regal banking companionship of India, a bank of head-to-head characterholders, mostly Europeans, was establish. Allahabad bank building was found, exclusively by Indians, in 1865. Punjab National jargon was set up in 1894 with headquarter in Lahore.Between 1906 and 1913, coin bank of India, primaeval marge of India, depose of Baroda, Canara brink, Indian margin, and bank of Mysore were set up. The modestness entrust of India came in 1935. During the showtime phase, the growth was very slow and banks as intumesce experienced itemic failures amongst 1913 and 1948. on that point were approximately 1,100 banks, mostly depressed. To streamline the mental dish out and activities of technicalized banks, the giving medication of India came up with the bank buildinging Companies cultivate, 1949, which was later changed to the trusting Regulation involve, 1949 as per amending Act of 1965 (Act No. 3 of 1965). The sprout swan of In dia (run batted in) was vested with leng whereforeed powers for the supervision of banking in India as the interchange banking authority. During those days, the general world had lesser confidence in banks. As an af destinationath, mend mobilization was slow. more(prenominal)over, the savings bank facility supportd by the Postal de wear outment was comparatively safer, and finances were largely f completely apartn to traders. Phase2 The judicature took major initiatives in banking sphere reforms after Independence.In 1955, it contentized the regal vernacular of India and started offering ex decennarysive banking facilities, especially in plain and semi-urban atomic number 18as. The governingn constituted the enunciate border of India to act as the principal agentive role of the rbi and to handle banking transactions of the fusion political science and evince political sciences all over the boorish. vii banks own by the Princely pose ups were matterized in 1959 and they became subsidiaries of the state of matter commit of India. In 1969, 14 technicalized banks in the res publica were interior(a)ized. In the second phase of banking vault of heaven reforms, sep tenary more than banks were nationalized in 1980.With this, 80 pct of the banking orbit in India came under the political science ownership. Phase3 This phase has introduced many more harvest-tides and facilities in the banking sector as part of the reforms process. In 1991, under the chairmanship of M Narasimham, a charge was set up, which worked for the liberalization of banking practices. Now, the country is inundate with extraneous banks and their ATM stations. Efforts atomic number 18 universe put to give a fair to middling service to nodes. Phone banking and net banking be introduced. The entire system became more favorable and swift.Time is abandoned importance in all currency transactions. The pecuniary system of India has shown a great bulk of r esilience. It is sheltered from crises triggered by external macro scotch shocks, which other East Asian countries a good deal suffered. This is all callable to a flexible flavour in stride regime, the senior superior contrasted swap take, the not-yet in full convertible enceinte account, and the limited foreign exchange exposure of banks and their customers. In superannuated India on that point is evidence of loans from theVedic spot(beginning one hundred seventy-five0 BC).Later during theMaurya dynasty(321 to 185 BC), an instrument called adesha was in part, which was an prescribe on a banker desiring him to pay the property of the circular to a third person, which corresponds to the definition of a bill of exchange as we project it today. During the Buddhist dot, there was considerable physical exertion of these instruments. Merchants in large towns gave letters of cite to one another. Colonial era During the colonial era merchants inCalcutta outspo ken the federation secureory pecuniary institution in 1839, provided it failed in 1840 as a consequence of the frugal crisis of 1848-49.TheAllahabad hope, open in 1865 and still functioning today, is the oldestJoint melody bankin India, it was not the first though. That honor be languishs to the Bank of Upper India, which was established in 1863, and which survived until 1913, when it failed, with some of its assets and liabilities being transferred to theAlliance Bank of Shimla. distant banks too started to appear, particularly inCalcutta, in the 1860s. TheComptoir dEscompte de Paris opened a grow in Calcutta in 1860, and another inBombayin 1862 offset printinges inMadrasandPondicherry, then a French possession, followed. HSBCestablished itself inBengalin 1869.Calcutta was the most bustling trading port in India, mainly due to the trade of theBritish Empire, and so became a banking center. The first on the whole Indian reciprocal depot bank was the Oudh Commercial Bank, established in 1881 inFaizabad. It failed in 1958. The coterminous was thePunjab National Bank, established inLahorein 1895, which has survived to the give birth and is direct one of the largest banks in India. Around the subprogram of the 20th Century, the Indian preservation was short-lived by a relative goal of stability. Around five decades had elapsed since theIndian Mutiny, and the social, industrial and other infra structure had amend.Indians had established downcast banks, most of which served particular cultural and religious communities. The presidency banks dominated banking in India but there were to a fault some exchange banks and a hail of Indianjoint line of descentbanks. All these banks ope stationd in divergent segments of the sparing. The exchange banks, mostly own by Europeans, concent identifyd on pay foreign trade. Indian joint stock banks were broadly speaking under capized and lacked the experience and maturity to compete with the presidency and exchange banks.This partition let Lord Curzon to observe,In treasure of banking it seems we are behind the times. We are standardised some old fashioned glide ship, divided by solid wooden bulkheads into bring out and cumbersome compartments. The period surrounded by 1906 and 1911, saw the establishment of banks inspired by theSwadeshi purport. The Swadeshi execution inspired local businessmen and political figures to found banks of and for the Indian community. A number of banks established then have survived to the present such asBank of India,Corporation Bank,Indian Bank,Bank of Baroda,Canara Bankand primal Bank of India.The fervour of Swadeshi movement lead to establishing of many private banks inDakshina KannadaandUdupi districtwhich were unified earlier and cognise by the name to the south Canara( South Kanara ) district. Four nationalised banks started in this district and also a leading private sector bank. Hence undivided Dakshina Kannada district is know as Cradle of Indian Banking. During the primary creation War(19141918) with the end of theSecond arena War(19391945), and deuce divisions thereafter until the independenceof India were challenging for Indian banking.The socio-economic classs of the First World War were turbulent, and it took its toll with banks simply collapsing disdain theIndian economygaining indirect pass on due to war-related economic activities. At least 94 banks in India failed among 1913 and 1918 as indicated in the following table old age Number of banks Authorised capital pay 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 impacted the economies ofPunjabandWest Bengal, paralyzing banking activities for months. Indiasindependencemarked the end of a regime of theLaissez-fairefor the Indian banking. The politics of Indiainitiated measures to take to the woods an active role in the economic life of the nation, and the Industrial form _or_ system of government effect adopted by the authorities in 1948 envisaged amixed economy. This forgeted into greater sakeingness of the state in distinguishable segments of the economy including banking and finance.The major steps to regulate banking include ? The set aside Bank of India, Indias cardinal banking authority, was established in April 1935, but was nationalized on January 1, 1949 under the terms of the Reserve Bank of India (Transfer to ordinary Ownership) Act, 1948 (run batted in, 2005b). ? In 1949, the Banking Regulation Act was enacted which sceptred the Reserve Bank of India ( rbi) to regulate, supremacy, and inspect the banks in India. ? The Banking Regulation Act also provided that no new bank or branch of an existing bank could be opened without a license from the run batted in, and no two banks could have common directors. Nationalization in the 1960sDespite the p rovisions, control and regulations ofReserve Bank of India, banks in India except the body politic Bank of Indiaor SBI, continued to be owned and operated by private persons. By the 1960s, the Indian banking perseverance had become an meaning(a) putz to assuage the maturement of theIndian economy. At the corresponding time, it had emerged as a large employer, and a debate had ensued active the nationalization of the banking industry. Indra Gandhi, thenPrime parson of India, expressed the name of the political sympathies of Indiain the annual connection of the All India Congress Meeting in a paper entitled tend thoughts on Bank Nationalization. The meeting legitimate the paper with en and soiasm. Thereafter, her move was swift and sudden.The Government of India fall outd an ordinance (Banking Companies (Acquisition and Transfer of nethertakings) Ordinance, 1969)) and nationalizedthe 14 largest mercantile banks with effect from the midnight of July 19, 1969. These bank s contained 85 percent of bank secures in the country. 5Jayaprakash Narayan, a national attractor of India, described the step as amasterstroke of political saga urban center. Within two weeks of the get it on of the ordinance, the Parliamentpassed the Banking Companies (Acquisition and Transfer of Undertaking) Bill, and it received thepresidentialapproval on 9 prideful 1969. A second dose of nationalization of 6 more commercial banks followed in 1980.The stated reason for the nationalization was to give the governance more control of creed delivery. With the second dose of nationalization, the Government of India controlled nearly 91% of the banking business of India. Later on, in the family 1993, the government merged parvenu Bank of IndiawithPunjab National Bank. It was the only optical fusion between nationalized banks and forgeted in the reduction of the number of nationalized banks from 20 to 19. After this, until the 1990s, the nationalized banks grew at a pace of a round 4%, closer to the average growth rate of the Indian economy. relaxation in the 1990s In the early 1990s, the thenNarasimha Raogovernment embarked on a insurance ofliberalization, licensing a miniscule number of private banks.These came to be cognize as pertly Generation tech-savvy banks, and include world(a) Trust Bank (the first of such new generation banks to be set up), which later amalgamated with eastern Bank of Commerce,UTI Bank(since renamedAxis Bank),ICICI BankandHDFC Bank. This move, along with the rapid growth in theeconomy of India, revitalized the banking sector in India, which has seen rapid growth with absolute voice from all the three sectors of banks, namely, government banks, private banks and foreign banks. The next stage for the Indian banking has been set up with the proposed relaxation in the norms for contrasted forthwith Investment, where all Foreign Investors in banks may be given voting rights which could exceed the present cap of 10%,at prese nt it has gone up to 74% with some restrictions. The new insurance shook the Banking sector inIndiacompletely.Bankers, till this time, were used to the 4-6-4 method (Borrow at 4% Lend at 6% Go home at 4) of functioning. The new stray ushered in a modern sentinel and tech-savvy methods of working for traditional banks. All this led to the retail boom in India. tribe not just demanded more from their banks but also received more. Current period By 2010, banking in India was generally reasonably mature in terms of ply, product range and reach-even though reach in coarse India still remains a challenge for the private sector and foreign banks. In terms of eccentric of assets and capital adequacy, Indian banks are considered to have clean, strong and transparent balance sheets relative to other banks in comparable economies in its region.The Reserve Bank of India is an autonomous body, with minimal draw from the government. The stated indemnity of the Bank on theIndian Rupeeis to manage capriciousness but without any fixed exchange rate-and this has mostly been true. With the growth in the Indian economy stockpileed to be strong for quite some time-especially in its service sector-the demand for banking services, especiallyretail banking, mortgages and enthronisation services are expected to be strong. One may also expect M, takeovers, and asset sales. In March 2006, the Reserve Bank of India allowedWarburg Pincusto increase its stakes 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 stupendous 5% in the private sector banks would lead to be vetted by them. In recent classs critics have aerated that the non-government owned banks are too high-pressure in their loan convalescence childbeds in connection with housing, vehicle and personal loans. There are press reports that the banks l oan recovery efforts have driven defaulting borrowers to suicide. assure Bank of India &038 Its Subordinates pic 1. Introduction present Bank of India(SBI) is abankingand monetary servicescompany establish 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 globe making it the largest banking and monetary services company in India. The bank traces its ancestry toBritish India, through the royal Bank of India, to the founding 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 uprise became the utter Bank of India.TheGovernment of Indianationalized the Imperial Bank of India in 1955, with theReserve Bank of Indiataking a 60% stake, and rena med it the pronounce Bank of India. In 2008, the government took over the stake held by the Reserve Bank of India. SBI has been ranked 285th in theFor dividing line Global 500rankings of the worlds biggest corporations for the year 2012. SBI provides a range of banking products through its vane of branches in India and overseas, including products bewildered atnon-resident Indians(NRIs). SBI has 14 regional hubs and 57 zonary slurs that are located at crucial cities throughout the country. SBI is a regional banking giant star and has 20% foodstuff share in deposits and loans among Indian commercial banks.The area Bank of India was named the 29th most reputed company in the world according toForbes2009 rankings and was the only bank featured in the top 10 brands of India list in an annual evaluate conducted byBrand payandThe sparing Timesin 2010. History The grow of the State Bank of India lie in the first decade of 19th century, when theBank of Calcutta, later renamed th eBank 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 (incorporated on 15 April 1840) and theBank of Madras(incorporated on 1 July 1843). All three Presidency banks were incorporated asjoint stock companiesand were the result of theroyal charters. These three banks received the exclusive right to essence paper money till 1861 when with the idea certainness Act the right was interpreted 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(predicate) to the provisions of the State Bank of India Act of 1955, theReserve Bank of India, which isIndias primaeval bank, acquired a controlling refer in the Imperial Bank of India. On 30 April 1955, the Imperial Bank of India became the State B ank of India. Thegovernment of Indiarecently acquired the Reserve Bank of Indias stake in SBI so as to submit any conflict of interest because the rbi is the countrys banking regulatory authority.In 1959, the government passed the State Bank of India (Subsidiary Banks) Act, which do eight state banks concerns of SBI. A process of consolidation began on 13 phratry 2008, when theState 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, together with its 28 branches. The next year SBI acquired National Bank of Lahore (est. 1942), which had 24 branches. Five years later, in 1975, SBI acquired Krishnaram Baldeo Bank, which had been established in 1916 inGwalior State, under the musical accompaniment of MaharajaMadho Rao Scindia. The bank had been the Dukan Pichadi, a delicate moneylender, owned by the Maharaja. The new banks first manager was Jall N. Broacha, a Parsi.In 1985, SBI acqui red the Bank of cochin inKerala, which had 120 branches. SBI was the acquirer as its affiliate, theState Bank of Travancore, already had an extensive net profit in Kerala. 2. Associate banks SBI has five call down banks all use the State Bank of India logo, which is a blue circle, and all use the State Bank of name, followed by the regional headquarters name ? State Bank of Bikaner &038 Jaipur ? State Bank of Hyderabad ? State Bank of Mysore ? State Bank of Patiala ? State Bank of Travancore earlier SBI had seven associate banks, all of which had belonged to voluptuous statesuntil the government nationalised them between October 1959 and may 1960.In tune with the first Five Year Plan, which prioritized the victimization 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 bank and streamline the groups trading operations. The firs t step towards unification occurred on 13 howling(a) 2008 whenState Bank of Saurashtramerged with SBI, cut back the number of associate state banks from seven to six. Then on 19 June 2009 the SBI shape up pass the absorption 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 balance of 1. 77%. ) The encyclopedism of State Bank of Indore added 470 branches to SBIs existing network of branches.Also, following the acquisition, SBIs add up assets leave alone 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 distinguished 2010. Non-banking subsidiaries aside from its five associate banks, SBI also has the following non-banking subsidiaries ? SBI C apital MarketsLtd ? SBI bills Management Pvt Ltd ? SBI Factors &038 Commercial Services Pvt Ltd ? SBI separate&038 Payments Services Pvt. Ltd. (SBICPSL) ? SBI DFHI Ltd ? SBI Life Insurance Co. Ltd. ? SBI General InsuranceIn March 2001, SBI (with 74% of the total capital), join withBNP Paribas(with 26% of the remaining capital), to form a joint venture life insurance policy company named SBI Life Insurance company Ltd. Nowadays, SBI Life Insurance Co. Ltd ranks among the top and most giveed Life Insurance Companies in India and also abroad. In 2004, SBI DFHI Ltd. (DISCOUNT AND FINANCE stomach OF INDIA) was founded with its headquarters in MUMBAI, MAHARASHTRA. SBIDFHI Ltd. is a primary dealer that trades in Fixed income securities (treasury bills, state development loans, government securities, non SLR bonds, corporate bonds) and goldbrick Term Money Market instruments (certificates of deposit, commercial papers, inter-corporate deposits, call and money notice deposits).It is a n macrocosm organize by run batted in to cost the book building process in primary auctions of Government securities and to provide infallible depth and runniness state to the secondary grocery in Government securities. Reserve Bank of India pic TheReserve Bank of India(run batted in) is Indias aboriginal banking presentation, which controls the fiscal policyof theIndian rupee. It was established on 1 April 1935 during theBritish Rajin conformation 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. interest Indias independence in 1947, the rbi was nationalised in the year 1949. The run batted in plays an important part in the development strategy of theGovernment of India. It is a subdivision bank of theAsian clear Union.The general superintendence and direction of the RBI is entrusted with the 21- process-strong Central mesa of theater directorstheGovernor( incumbentlyDuvvuri Subbarao), tetrad Deputy Governors, twofinance Ministry founder forative, ten Government-nominated music directors to represent important elements from Indias economy, and quatern handlers to represent Local batting orders headquartered at Mumbai, Kolkata, Chennai and New Delhi. separately of these Local bill of fares consist of five constituents who represent regional interests, as well as the interests of co-operative and indigenous banks. 1. Structure Central Board of managing directors The Central Board of managing directors is the main military commission of the primeval bank. TheGovernment of Indiaappoints the directors for a four-year term. The Board consists of a governor, four deputy governors, xv 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 extensive the period of the present governor up to 2013. There are four deputy governors. Supportive bodies The Reserve Bank of India has ten regional representations North in New Delhi, South in Chennai, East in Kolkata and West in Mumbai. The representations are form by five atoms, found for four years by the profound government and servebeside the advice of the Central Board of directorsas a forum for regional banks and to deal with delegated tasks from the fundamental board. The trigger has 22 regional offices. TheBoard of Financial Supervision(BFS), formed in November 1994, serves as a CCBD committee to control the monetary institutions.It has four members, appointed for two years, and takes measures to strength the role of statutory auditors in the financial sector, external supervise and internal controlling systems. responsibilitys and branches The Reserve Bank of India has 4 zonal offices. It has 19 regional offices at most state capitals and at a few major cities in India. Few of them are l ocated 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 send off according to the guidelines laid down byDr. Ambedkar.RBI was conceptualized as per the guidelines, working style and anticipation presented by Dr Ambedkar in front of the Hilton recent consignment. When this commission came to India under the name of empurpled Commission on Indian Currency &038 Finance, each and both member of this commission were holding Dr Ambedkars book named The Problem of the Rupee Its origin and its solution. The Bank was set up ground on the recommendations of the 1926 Royal Commission on Indian Currency and Finance, also known as the HiltonYoung Commission. The pilot program choice for the seal of RBI was The East India CompanyDouble Mohur, with the sketch of the lion and Palm Tree. However it was decided to knock back the lion with the tiger, the national animal of India.The introduce of the RBI describes its basic functions to regulate the issue of bank notes, keep withstands to in effect(p) monetary stability in India, and generally to operate the currency and faith system in the best interests of the country. The Central Office of the RBI was initially established in Calcutta (now Kolkata), but was permanently moved to Bombay (now Mumbai) in 1937. The RBI also acted as Burmas of import bank, except during the years of theJapanese cable of Burma(194245), until April 1947, even though Burma seceded from the Indian Union in 1937. After 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 theGovernme nt of Indiasince its nationalization in 1949. 19501960 In the 1950s, the Indian government, under its first Prime MinisterJawaharlal Nehru, developed a centrally think economic policy that focused on the agricultural sector. The administration nationalized commercial banks and established, ground 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 tenacious to place upright the economic plan with loans. 19601969 As a result of bank crashes, the RBI was requested 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 promote the economy and used the slogan Developing Banking. The Government of India restructured the national bank grocery and nationalized a lot of shows. 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 government nationalized 14 major commercial banks. Upon Gandhis sacrifice to power in 1980, a merely six banks were nationalized. The regulation of the economy and especially the financial sector was rein pressure by the Government of India in the 1970s and 1980s.The central bank became the central player and change magnitude its policies for a lot of tasks want interests, suspend ratio and visible deposits. These measures aimed at break away economic development and had a vast effect on the company policy of the constitutes. The banks lent money in selected sectors, like agri-business and small trade companies. The branch was coerce to establish two new offices in the country for both newly established office in a town. The cover crisesin 1973 resulted in increasinginflation, and the RBI restricted monetary policy to impose 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 FinancialReconstruction, theIndira Gandhi demonstrate of growing enquiryand theSecurity &038 give-and-take Board of Indiainvestigated the national economy as a whole, and the warrantor and exchange board proposed come apart methods for more effective markets and the protection of investor interests. The Indian financial market was a leading character 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 tied to invest in the office 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 devalued.The currency lost 18% relative to theUS dollar, and theNarsimahmam military commission counsel restructuring t he financial sector by a temporal trim reserve ratio as well as the statutory liquidity ratio. New guidelines were published in 1993 to establish a private banking sector. This bend 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 diversity liberalisation to ray owner structures in 1998. TheNational Stock switch 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 exceptionalin February 1995 to produce banknotes. Since 2000 TheForeign Exchange Management Actfrom 1999 came into force in June 2000. It should improve the foreign exchange market, multinational investments in India and transactions . The RBI promoted the development of the financial market in the last years, allowedonline bankingin 2001 and established a new allowance system in 20042005 (National Electronic shop Transfer). TheSecurity Printing &038 Minting Corporation of India Ltd. , a merger of nine institutions, was founded in 2006 and produces banknotes and coins.The national economys growth rate came down to 5. 8% in the last 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 repair right to issue bank notes of all denominations. The distribution of one rupee notes and coins and small coins all over the country is under taken by the Reserve Bank as agent of the Government. The Reserve Bank has a separate Issue Department which is entrusted with the issue of currency notes. The assets and liabilities of the Issue Department are unploughed 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 catch an adequate flow of extension to profitable sectors. Regulator and supervisor of the financial system The institution is also the regulator and supervisor of the financial system and prescribes broad parameters of banking operations within which the countrys banking and financial system functions. Its preys are to prevent public confidence in the system, protect depositors interest and provide cost-effective banking services to the public.TheBanking Ombudsman final causehas been formulated by the Reserve Bank of India (RBI) for effective addressing of complaints by bank customers. The RBI controls the monetary supply, 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 the Foreign Exchange Management Act, 1999. Objective to allay external trade and payment and promote nice development and maintenance of foreign exchange market in India. Issuer of currency 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 fend for or improve the GDP. The basic objectives of RBI are to issue bank notes, to fight down 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 can 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 h olders and can deposit money. RBI maintains banking accounts of all plan banks. Commercial banks create credit.It is the certificate of indebtedness 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 overhauls inter-bank transfer of funds. It can earmark 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 garble currency In order to check up on the fake currency menace, RBI has launched a website to raise assuredness among masses about fake notes in the market. pic pic Policy pass judgment and reserve ratiosBank Rate RBI lends to the commercial banks through its discount window to help the banks meet depositors demands and reserve requirements for long term. The liaison rate the RBI charges the banks for this heading is called bank rate. If the RBI wants to increase the liquidity and money supply in the market, it depart decrease the bank rate and if RBI wants to reduce the liquidity and money supply in the system, it testament increase the bank rate. As of 25 June 2012 the bank rate was 8. 0%. latest bank rate is 7. 75% as on 29/01/2013. Reserve requirement gold reserve ratio (CRR) Every commercial bank has to keep certain minimum property reserves with RBI.Consequent upon amendment to sub-Section 42(1), the Reserve Bank, having regard to the need of securing the monetary stability in the country, RBI can prescribe funds Reserve Ratio (CRR) for scheduled banks without any bedight rate or ceiling rate, Before the law 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 the money supply. An increase in exchange Reserve Ratio (CRR) give make it mandate on the part of the banks to hold a large affinity of their deposits in the form of deposits with the RBI. This go away reduce the sizing of their deposits and they ordain 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 take down the CRR by 25 basis points to 4. 25% on 30 October 2012, a move it said would inject about 175 billion rupees into the banking system in order to pre-empt potentially tightening liquidity. The latest CRR as on 29/01/13 is 4% Statutory Liquidity ratio (SLR) Apart from the CRR, banks are inevitable to maintain liquid assets in the form of gold, cash and ratified securities. Higher liquidity ratio forces commercial banks to maintain a larger proportion of their resources in liquid form and thus reduces their capacity to grant loans and advances, thus it is an anti-inflationary impact.A high liquidity ratio diverts the bank funds from loans and advances to investment in government and approved securities. IN OTHER WORDS ITS A TOOL SIMILAR TO CRR BUT AT HIGHER RATIO In well-developed economies, central banks use open market operationsbuying and selling of eligible securities by central bank in the money marketto deflect 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 ma rgins for lend against proper(postnominal) securities. 2. Ceiling on the amounts of credit for certain purposes. 3. Discriminatory 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 forethoughtful 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 priority 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 whole new Era of Banking Technology. Where banking is do easier and convenient for our customers. The Punjab State conjunct Bank provides you with the New Generation banking architecture to near in the future in an evolutionary manner. Punjab State concerted Bank (PSCB) is customer centric. 2. History The Punjab State accommodating Bank was established on 31st August, 1949 at Shimla vide registration No. 720 has a normal financing institution of the accommodative movement in Punjab. In 1951 its Head Office was shifted to Jalandhar from where it moved in 1963 to its present building at Chandigarh.In the co-op Banking structure, the position of the Punjab State joint Bank is extremely important as the whole credit system revolves around it. It has 19 branches and 1 protraction counters in Chandigarh. There are 20 District Central Cooperative Banks having 804 branches all over Punjab, mostly in rural areas of the State. 3. Profile THE PUNJAB STATE COOPERATIVE BANK LTD. CHANDIGARH ORGANISATION The Punjab State Cooperative Bank Chandigarhwas established on 31 August 1949 at shimla vides Registration No. 720 as a principal financing institution of the co-op movement in the state.It has 19 branches and 1 extension counters in the city of Chandigarh. 20 Central Cooperative Banks having 786 bra nches and 18 Extension Counters in the State of Punjab are affiliated with the bank. In the Cooperative banking structure the position of the Punjab State Coop Bank is extremely important as a the whole short term credit system revolves around it. This bank ensures that its member central reconciling banks follow big(p) banking practices and observe strict financial discipline. The Central Cooperative Banks are financing the farmers through PACS at the village Level. There is no arena of life where this premier institution has not played its part. From a farmer, journeyman to traders/businessman, everybody has been covered in the fold of this institution. The green, gabardine 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 scoop murder AWARD from NABARD and NAFSCOB. For the year 2003-04, Punjab Cooperative Bank has been selected fo r NABARDs ruff motion awarding which is based on cognitive process 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 Centre 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 cooperative societies in the state in accordance with cooperative principles and to facilitate the development and funding 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 management of the bank is being looking after by the elected BOD. 4.Organization pic 5. Board of Directors SNO Name Designation forgather No. Address 1. Sh. Av tar 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. rise 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. Mukts ar 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 culture Marar, S/o Sh. Narayan victimisation 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 Civil Sectt , Cooperation, Punjab Punjab Chandigarh 17. Principal sectary F inance 18. Registrar, 5046814 RCS , Punjab , Cooperative Sector-17 Bays Building , 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 &038 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. give The Cooperative Banks in the State have in advance(p) Rs. 7536. 33 Crores as ST Agri. impart during the year 2009-10 as compared to Rs. 5894. 28 crore during 2008-09. Similarly during 2010-11, Rs 8497. 15 crores stand disburse d. Against the heading of Rs. 8300. 00 Crores. R. C. C. LIMIT During 2009-10 the Central Coop. Banks in Punjab have sanctioned R. C. C limits expense 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. TWO WHEELER LOANS TO AGRICULTURISTS Under Two Wheeler 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) a append of Rs. 32. 67 crore. Similarly, during 2010-11, Rs. 29. 70 crore has been advanced against the locate 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 goat 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 FARM SECTOR LOANS During 2008-09 Rs 47. 72 crores were advanced under the scheme 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 DURABLES UnderConsumer durables 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 profit Rs. 65. 17 crore whereas 2 DCCB, namely Faridkot and Mansa were in loss. REDUCTION IN THE RATE OF INTEREST Rate of Interest on Crop Loan has been reduced to 7. 00% w. e. f. 01-04-2006. 7. futurity Planning and Vision Future Perspective Cooperatives are not unimpressed by structural adjustments and globalization of goodness 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 matched 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 market-gardening sector, changes in agricultural economy affect them more closely. The Banks envisage following scenario as a result of liberalized agricultural policy Liberalization of agricultural policy would result in greater capital rapture 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 employment opportunities from agricultural sector to other sectors of economy. Such as small business enterprises, services and industrial sector. Liberalization of agriculture would professionalize and uprise agriculture, thereby earning a status of industry attracting high skilled professionals in agriculture sector. Liberalized agricultural economy would lead to a greater role of private research and development institutions in improving the productivity and quali ty of agricultural operations. The liberalized agricultural policy would result in greater thrust on value addition in agriculture. Therefore, a great deal of thrust would be on agro-processing units. The liberalized agricultural policy would bring greater thrust on exportation of raw and value added agro-products. The liberalized agricultural economy would lead to sowing/planting of new crops. lead to a great deal of crop diversification. With this perspective, the Cooperative Credit Policy, both for short-run and long term requirements of the farmers, needs to be restructured.Accordingly, the Cooperative Banks in the State do 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 efficient services. ? Present customers will be retained and other customers will be attracted to increase market share. ? Bank wil l attract maximum deposit (especially low cost deposit) to strengthen its financial resources so as to reduce its dependency upon NABARD. ? Bank while diversifying its loan portfolio will provide medium 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 stress 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 go down its business plan every year and by implementing it, goals set will be achieved. ? Bank will professionalize and modernize the business. 8. grooming Center pic Introduction Agriculturecooperative Staff Training name in the State of Punjab was established in 1986 by the Punjab State Cooperative Bank Ltd.With the Financial assistance from National Cooperati ve Development Corporation Under World Bank NCDC Project. The main aim of scenery up this make was to provide provision to the staff and committee members as well as education to the ordinary members of the chief(a) Agricultural Services Societies (PACS) during the project period of 5 years. After successfully boundary of the Project the institute started catering to the schooling needs of the whole short term credit cooperative in Punjab particularly cooperative banks from 2001. The institute is running various rearing programmed for different categories of staff of cooperative bank.The Punjab State Cooperative Bank is giving high priority for the procreation of its staff as well as staff of its member banks. The institute is getting full support from the bank in the field of formulation. The institute is acting for the development of a mobile phone 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 pore Committee, Narsimham Committee and Vaidyanathan Committee recommendations have put profound challenges to cooperative banks. The technological changes in the banking sector are also affecting these banks.This institute is aware of these transformations and has geared up its schooling plans. The training institute of Cooperative banks cannot remain inactive but must play an active role in providing consultancy, latest experience 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 ? Sensitizing the banks of the challenges ahead and to prepare the employees to meet these challenges ? Improving the operational efficiency of cooperative bank. ? Building up the managerial and leadership abilities among the officers for organizational effectiveness. TRAINING NEEDS ASSESSMENTThis insti tute assesses the training needs of the staff in the following ways. 1. Anticipation of the latest Development Latest developments in economic and banking sectors (Capital adequateness Norms, Asset Liability Management, Prudential Norms, and testimony of various Committees) are considered as Training requirement. 2. Demand from Central Cooperative Banks divers(a) central cooperative banks at different occasions approach 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 convenience 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 Bank Management, Institute develops and organizes training programmed for effectives implementation of these decisions. 4. Faculty Members overturn Faculty member of this institute frequently visit cooperative banks at different inte rvals to think operational problems of the banks and to identify the training needs of the staff. 5. Audit Reports and Inspection Reports These reports do provide useful indication for the training needs in banks. We continuously study these reports to find out procedural gaps and problems of the banks. rush DESIGN The training programmers are intentional by conducting a critical analytic thinking of training needs of Bank Staff.Each member of power is advised to design at least two training programmers in a year. The training programmed along with exposit course contents 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