1. Evolution of Banking

MBA 3rd Term N.V N. V.H. Krishn Krishnan an

MBA Jain University NVH Krishnan

1



First Commercial bank established in 1806 at Calcutta by East India

Company Company - Bank of Bengal Bengal or Presidency Presidency Bank Bank  followed by Bank of  Bombay and Bank Of Madras 

The Presidency Banks became IMPERIAL BANK OF INDIA in 1921  combined functions of a central bank and a commercial bank



RBI established in 1935. Central banks functions transferred to RBI



First

Development Finance Institution Institution established established in in 1948  IFCI, through an Act Act of Parliament



In 1955, Imperial Bank nationalized and named State Bank of India



In 1959, Banks in princely states nationalise nationalised d and brought under under SBI



ICICI established through an Act of Parliament in 1961 MBA Jain University NVH Krishnan

2



DICGC launched as a subsidiary of RBI



IDBI Act and formation of IDBI in 1964. SFCs established at the State level e.g. KSFC The emerging philosophy: DFIs would help in starting up industries and business, Commercial banks would help their operations. Both IDBI and IFCI were direct lending and refinancing institutions.









1969: Nationalisation of 14 Banks with aggregate deposits of Rs. Rs. 50 crores when Indira Gandhi was the PM and launch of the Lead bank scheme. 6 more banks nationalised nationalised in 1980 with Rs. Rs. 2000 crores crores deposits deposits 1975: Lead Bank Scheme for acceleration of rural development. 336 districts were identified; State Bank, Bank, its subsidiaries and the Nationalised banks were asked to sponsor a bank in an underdeveloped District. 1984-1987: Banks reported reported major losses  Narasimham Committee Recommendations, 1991 aimed at improving profitability of Banks. 1998, Narasimham Committee report up for banking sector reforms More National level institutions established e.g. NABARD, NHB etc. MBA Jain University NVH Krishnan

3

I ns, ARCs. Factoring, CiBIL, Financial Services MF, Ins, rating, Merchant Banking, Brokerage

SARFAESI ACT, ACT, 2002, BASEL II II 2008, SBI take take over of SBS

Core banking, ATMs, online onli ne banking, M&A

Funding projects with long

term exposure

Enter Capital markets, markets, licences to new private banks, foreign bank br, PLR free

MBA Jain University NVH Krishnan

4

Aggregate Deposit : Rs.4161354 Rs.4161354 Cash in Hand : Rs.212745 Investments : Rs.1377910 Bank Credit : Rs.2847595 CD Ratio : 71.04% Economic Indicators India's Exports (07-08): $155.40 bn India's imports (07-08) $235.70 $235.70 bn Service Sector % in GDP: 61.8% Money Supply Supply Expn (Mar 09) 19.4% India's current Rating (S&P) BB +

MBA Jain University NVH Krishnan

5

Holding company Commercial bank Securities operations Insurance operations Mutual Fund

Mortgages Consumer  finance

MBA Jain University NVH Krishnan

6

1. In which which yyear ear was was the first first commer commercial cial bank bank of the countr countryy established? 2. What What was the the name by by which SBI was was previousl previously y known? known? 3. In whic which h yyea earr was was RBI RBI estab establis lishe hed? d? 4. Whic Which h was was the the ffir irst st DFI of the country? 5. Who was the the Prime Prime Minis Minister ter of the the country country when when banks banks were were nationalised? 6. What What do you you know know abou aboutt the the SAR SARFAESI ACT? MBA Jain University NVH Krishnan

7







nationalisation sation of banks was a historic historic The nationali and momentous event in the history of India. India. Explain. Trace the transformati transformation on of Icici Icici into a high street bank Explain the role and functions of financial conglomerates

MBA Jain University NVH Krishnan

8