BANKING

BANKING

1.Money market It refers to borrowing and lending. 2 parts organized and unorganized
sector – Organized sector are State Bank, 7 associated banks, 19 Nationalised banks,
RRB, Co-operative Banks, Non Governmental sector and other Banks. Unorganized
includes the moneylenders and indigenous bankers.

Development of Indian Banking: Bank of Hindusthan 1779 was first bank at
Calcuttaunder European management-Bank of Bengal 1806 , Bank of Bombay 1840,
bank of Madras 1843, were called Presidency banks. 1881- First Bank with limited
liability to be managed by Indian Board namely the Oudh Commercial bank- 1894-
First purely Indian bank was Punjab National bank- Later Imperial bank 1921 by
amalgamating the Presidency banks. RBI created in 1935- nationalized in 1949 –
Imperial Bank, renamed as SBI in 1955- 14 Banks (50 crores) nationalized 6 Banks
(2 00crores) nationalized 1980 – N.B.I. merged with P.N.B. in 1993

1994-95 M.C.Bhandari Committee: to invest NON – SLR surplus fund in
profitable areas
1995-96 –K.Basu Committee: Re-organisation of selected RRB’s
Narasimham committee recommended to give more freedom to RRB
Committees: 1.Narasimham committee 1991 financial reforms.
b. Goiporria Committee – 1990 – improvement of consumer service in banking
c.Janakiraman Committee – 1992 high-level enquiry on irregularities in securities.
d.J.P.C. Shares scam in 1992. e. Chandrashekar Committee: 1997 transfer of shares.
f. Pherwani Committee: 1991 established National Stock Exchange.



Banking Ombudsman – RBI introduced 1995 – 11 already appointed all except RRB
included. Time limit one month

Nationaliation of Banks : Jan 1st 1949 - RBI,  1955-SBI
July 19th 1969 - 14 large commercial banks whose reserves were more thanRs.50 Crore.
1980 April 15 – 6 Private Sector banks whose reserves were more thanRs.200crore.]
1993 the New Bank of India (1980) merged with Punjab National Bank(1969)
Totally 28banks are nationalised

Some important banking Institutions:
a) IDBI- 1964-To provide financial assistance to industrial enterprises and to promote
institutions engaged in industrial development.
b) IFCI: 1948 Act -To arrange medium and long term credit for varuois industrial
enterprises- 1993 corpn was converted into a company
c) ICICI: 1955-Developing medium and small industries –2002 merged with ICICI Bank
d) UTI: 1964- Biggest mutual fund- people’s savings and reinvestment. It started UTI
bank in 1994 at Ahenmedabad.
Various Funds of UTI: 1) India Fund-1986 (ii) India Growth Fund 1988 (iii) India Access
Fund 1997 (iv) India Debt Fund 1997 (v)Master Value- Index Fund 2 in 1998.
e) EXIM bank: 1982- For financing, facilitating and promoting foreign trade in India.
f) NHB: 1988-wholly owned by RBI.Apex institution for housing finance,