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Indian banking system and its emerging trends

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Indian banking system and its emerging trends

  1. 1. INDIAN BANKING SYSTEM AND ITS EMERGING TRENDS SUBMITTED BY- Saurav Prashar ROLL NO- 140423301 SUBMITTED TO- Dr. Dheeraj Joshi
  2. 2. ESTABLISHMENT OF BANKS IN INDIA • .
  3. 3. June 2, 1806: The Bank of Calcutta
  4. 4. April 15, 1840: Bank of Bombay
  5. 5. July 1, 1843: Bank of Madras 1861: Paper Currency Act passed.
  6. 6. January 27, 1921
  7. 7. 1955 • TAKEN OVER BY SBI
  8. 8. FUNCTIONS OF BANKING
  9. 9. FUNCTIONS OF BANKS Accepting deposits Giving loans Overdraft Discounting of Bills of Exchange Investment of Funds Agency Functions Miscellan eous Functions
  10. 10. INVENTIONS AND FACILITIES FOR EASING OF BANKING IN THIS MODERN ERA
  11. 11. AUTOMATIC TELLER MACHINE (ATM)
  12. 12. CRADIT CARDS
  13. 13. DEBIT CARDS
  14. 14. CHEQUE CARDS
  15. 15. CHARGE CARDS
  16. 16. SMART CARDS
  17. 17. LATEST TRENDS IN BANKING
  18. 18. UNIVERSAL BANKING
  19. 19. ELECTRONIC BANKING
  20. 20. GLOBALISATION OF BANKING • Globalization has emerged as a prime mover in the Indian banking system. • This has come about as a result of the policy of liberalization and opening up of banking and other sectors pursued after 1991 in India. • Foreign banks that wish to set up their offices/branches in India have been granted licenses by RBI on liberal and on reciprocal basis. • Similarly, Indian banks are also opening their offices/branches abroad, particularly in countries whose banks have opened offices in India
  21. 21. SATELLITE BANKING • Satellite banking is an upcoming technological innovation in the Indian banking industry. • It is expected to help in solving the problem of weak terrestrial communication links in many parts of the country. • The use of satellites for establishing connectivity between branches will help banks to reach rural and hilly areas in a better way, and offer better facilities, particularly in relation to electronic funds transfers.
  22. 22. TECHNOLOGICAL DEVELOPMENT • With the advancement of technology and the birth of competition, banks are in the race of becoming the best in the country. • The advancement in the technology has helped the banks to reduce the workload. • There are so many activities, which are taken over by machines. Employees are no more loaded with paper work.
  23. 23. PHONE BANKING • Pick up the phone to access a host of Bank services, day or night. • Phone and mobile banking are a fairly recent phenomenon for the Indian banking industry. • Phone banking channels function through an Interactive Voice Response System (IVRS) or tele-banking executives of the banks.
  24. 24. Online banking • Online banking (or Internet banking) is a term used for performing transactions, payments etc. over the Internet through a bank, credit union or building society's secure website. • This allows customers to do their banking outside of bank hours and from anywhere where Internet access is available.
  25. 25. Features of online banking • Online banking usually offers such features as: • Bank statements. • Electronic bill payment • Funds transfer. • Loan applications and transactions, such as repayments • Account aggregation
  26. 26. REAL TIME GROSS SETTLEMENT • RTGS is a large value funds transfer system . • Transfer of money takes place from one bank to another on a “real time” and on “gross basis”. • Money can be transferred only to those branches in which RTGS is enable Benefits of RTGS • full value of individual • Real time immediate value transfer
  27. 27. Features • 1. No bundling up of transactions, • 2. No netting • 3. No deferral of final settlement
  28. 28. Funds Availabl e No Queue Yes Queue Delay Submit Now L I Q U I D I T Y Participant Payment Participant Payment Participant Payment
  29. 29. BANCASSURANCE
  30. 30. Bancassurance • Bancassurance is the term used to describe the sale of insurance products in a bank. • The word is a combination of "banque or bank" and "assurance" signifying that both banking and insurance is provided by the same corporate entity. • Banks gives you peace of mind with Bancassurance. • One receive coverage and save money at the same time. You can choose the right option which benefits you the most.
  31. 31. Core banking solutions(CBS) • Core banking (stand for "centralized online real-time exchange") is a banking services provided by a group of networked bank branches • Here customers may access their bank account and perform basic transactions from any of the member branch offices. • Larger businesses are managed via the Corporate banking division of the institution.
  32. 32. Electronic fund transfer (EFT) • Electronic Funds Transfer (EFT) is a system of transferring money from one bank account directly to another without any paper money changing hands. • It is used for both credit transfers, such as payroll payments, and for debit transfers, such as mortgage payments. • The growing popularity of EFT for online bill payment is paving the way for a paperless universe where checks, stamps, envelopes, and paper bills are obsolete.
  33. 33. Benefits of EFT • reduced administrative costs • increased efficiency • simplified bookkeeping • greater security
  34. 34. Electronic clearing system • ECS is an electronic mode of funds transfer from one bank account to another. • It can be used by institutions for making payments such as distribution of dividend interest, salary, pension, among others. • It can also be used to pay bills and other charges such as telephone, electricity, water. • For making equated monthly installments payments on loans as well as SIP investments. ECS can be used for both credit and debit purposes.
  35. 35. Electronic data interchange (EDI) It facilitates computer to-computer exchange of electronic documents (such as purchase orders, advance shipment notices and without human intervention or human readable (paper or electronic documents)..
  36. 36. International banking • Indian banks have extended their activities beyond the national boundaries. • The extension may take place in the form of borrowings as well as lending and it may take place through official or private or commercial channel. • In the process of internationalization, the domestic financial institutions participate in foreign financial markets and the foreign institutions participate in domestic market to a significant extent.
  37. 37. International lending • Syndicated loans • Large loans that enable borrowers to obtain large amounts of funds and lenders can diversify their credit risk. Lead bank can earn fee income for management services. • Letters of credit • Import letters of credit are issued by a bank in favor of a firm in most cases. An export letter of credit is issued by a foreign bank to a firm in the U.S.
  38. 38. Letters of credit • The letter of credit is a document from a bank that says it will pay the exporter when the conditions in the letter are met. • In effect, the bank’s credit is substituted for the importer. • The issuing bank pays the seller through the advising (paying) bank. • The importer pays the issuing bank a fee for its services.
  39. 39. Foreign exchange markets • Interbank market of money center banks and major foreign banks. • Foreign exchange brokers facilitate currency trading. • Credit risk associated with the counterparty (bank or broker) failing to meet its obligations.
  40. 40. CRMs and any branch banking • Customer relationship management (CRM) is a system for managing a company’s interactions with current and future customers. • It often involves using technology to organize, automate and synchronize sales, marketing, customer service and technical. • Any branch banking • All the branches are inter-connected and are capable of providing online, real-time transactions to its customers. • Customers can Deposit/Withdraw freely without any tariff charge i.e. free ABBS facility.
  41. 41. Risk management • The financial sector in various economies like that of India are undergoing a monumental change factoring into account world events such as the ongoing Banking Crisis across the globe. • Risk management in Indian banks is a relatively newer practice, but has already shown to increase efficiency in governing of these banks as such procedures tend to increase the corporate governance of a financial institution
  42. 42. POINT OF SALE TERMINAL • A type of electronic-transaction terminal. • Point-of-sale terminals typically include a computer, a cash register and other equipment or software used to sell goods or services. • They also transmit sales data to be posted to customer accounts. • It is an electronic payment system involving electronic fund transfers based on the use of payment cards, such as debit or credit, at payment terminals located at point of sale.
  43. 43. Thank you • A presentation by- Saurav prashar

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