1.
AN OVERVIEW OF THE BANKING
SECTOR- GROWTH AND
STRUCTURE
PRESENTED BY:
PRIYANKA JAIN

2.
WHAT IS 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.

3.
DEFINE A BANK :
 In simple words, we can say that Bank is a
financial institution that undertakes the banking
activity i.e. it accepts deposits and then lends the
same to earn certain profit.
 Now bank offers various services:
Issuance of debit and credit cards.
Providing safe custody of valuable items.
Lockers.
ATM Services.
Online transfer of funds across the world.

4.
WHICH ARE THE OLDEST BANKS IN INDIA?
 In 1839, some Indian merchants in Calcutta established
India's first bank known as "Union Bank", but it could
not survive for long and failed in 1848 due to economic
crisis of 1848-49. Similarly, in 1863, "Bank of Upper
India" was formed but it failed in 1913.
 In 1865, "Allahabad Bank" was established as a joint
stock bank. This bank has survived till date and is now
considered as the oldest surviving bank in India.

5.
STRUCTURE OF BANKS IN INDIA

6.
RESERVE BANK OF INDIA (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”.
 The Reserve Bank of India (RBI) is the central bank of
India, and was established on April 1, 1935 in
accordance with the provisions of the Reserve Bank of
India Act, 1934. Since its inception, it has been
headquartered in Mumbai. Though originally privately
owned, RBI has been fully owned by the Government of
India since nationalization in 1949.

7.
COMMERCIAL BANK:
 Commercial banks are those financial institutions which
accept deposits from public repayable on demand and
lend them for short periods.


8.
COOPERATIVE BANK:
 Cooperative banks are governed by the
cooperative societies act of 1904. Cooperative
banks are private sector banks. Cooperative
banks usually cater to the credit needs of
agriculturists.
 Cooperative banks offer a slightly higher rate of
interest to their depositors than commercial
banks.

9.
DEVELOPMENT BANKS:
 A development bank may be defined as a financial
institution concerned with providing all types of financial
assistance to business units in the form of loans,
underwriting, investment and guarantee operations and
promotional activities-economic development in general
and industrial development in particular
 A development bank is basically a term lending
institution. It is a multipurpose financial institution with
a broad development outlook.
 The industrial finance corporation of India, the first
development bank was established in 1948.
Subsequently many other institutions were set-up. Ex.
IDBI, IFCI, SIDBI etc.

10.
FUNCTIONS OF DEVELOPMENT BANKS
 Fostering industrial growth
 Providing Long term assistant
 Balanced development
 Providing Promotional services
 Infrastructure building
 Entrepreneur Development
 Fulfilling Socio economic objectives

11.
GROWTH OF INDIAN BANKING SECTOR:

12.
INDIAN BANKING SECTOR CREDIT GROWTH HAS
GROWN AT A HEALTHY PACE
 • Total credit extended went up to US$ 1,089 billion by
FY15
 • Credit to non-food industries increased 9.75 per cent to
US$ 1,073.4 billion in FY15, from the previous
financial year
 • Demand has grown for both corporate and retail loans

13.
MARKET SIZE:
 The Indian banking system consists of 26 public sector
banks, 25 private sector banks, 43 foreign banks, 56
regional rural banks, 1,589 urban cooperative banks and
93,550 rural cooperative banks, in addition to
cooperative credit institutions. Public-sector banks
control nearly 80 percent of the market, thereby leaving
comparatively much smaller shares for its private peers.
 As of November 11, 2015, 192.1 million accounts had
been opened under Pradhan Mantri Jan Dhan Yojna
(PMJDY) and 165.1 million RuPay debit cards were
issued. These new accounts have mustered deposits
worth Rs 26,819 crore (US$ 4 billion).

14.
INVESTMENTS/DEVELOPMENTS:
 The Reserve Bank of India (RBI) has granted in-principle licenses to
10 applicants to open small finance banks, which will help
expanding access to financial services in rural and semi-urban areas.
 IDFC Bank has become the latest new bank to start operations with
23 branches, including 15 branches in rural areas of Madhya
Pradesh.
 The RBI has given in-principle approval to 11 applicants to establish
payment banks. These banks can accept deposits and remittances,
but are not allowed to extend any loans.
 The Bank of Tokyo-Mitsubishi (BTMU), a Japanese financial
services group, aims to double its branch count in India to 10 over
the next three years and also target a 10 per cent credit growth
during FY16.State Bank of India has tied up with e-commerce portal
Snap deal and payment gateway PayPal to finance MSME
businesses. Etc.

15.
GOVERNMENT INITIATIVES
 The Government of India is looking to set up a special
fund, as a part of National Investment and Infrastructure
Fund (NIIF), to deal with stressed assets of banks.
 The Reserve Bank of India (RBI), the Department of
Industrial Policy & Promotion (DIPP) and the Finance
Ministry are planning to raise the Foreign Direct
Investment (FDI) limit in private banks sector to 100 per
cent from 74 percent.
 Government of India aims to extend insurance, pension
and credit facilities to those excluded from these benefits
under the Pradhan Mantri Jan Dhan Yojana (PMJDY)etc.

16.
NON PERFORMING ASSETS:
 The gross non-performing asset (GNPA) ratio inching to
4.45 per cent as on March 15 this year, as compared to
4.1 per cent in March 2014, according to the latest data
released by the Reserve Bank of India (RBI).

17.
CONCLUSION:
 The banking sector is growing continuously by
laying greater emphasis on providing improved
services to their clients and also upgrading their
technology infrastructure, (mobile banking , internet
banking , digitalization) in order to enhance the
customer’s overall experience as well as give
banks a competitive edge.