The first bank in India, though conservative, was established in 1786. From 1786 till today, the journey of Indian Banking System can be segregated into three distinct phases. They are as mentioned below: Early phase from 1786 to 1969 of Indian Banks
Nationalization of Indian Banks and up to 1991 prior to Indian banking sector Reforms.
New phase of Indian Banking System with the advent of Indian Financial & Banking Sector Reforms after 1991. The following are the steps taken by the Government of India to Regulate Banking Institutions in the Country:
• 1949: Enactment of Banking Regulation Act.
• 1955: Nationalization of State Bank of India.
• 1959: Nationalization of SBI subsidiaries.
• 1961: Insurance cover extended to deposits.
• 1969: Nationalization of 14 major banks.
• 1971: Creation of credit guarantee corporation.
• 1975: Creation of regional rural banks.
• 1980: Nationalization of seven banks with deposits over 200 core.
Problem of banking sector
Competition among banks for highly rated corporate needing lower amount of capital may exert pressure on already reduction interest. Further huge implementation cost may also impact profitability for smaller banks.
The biggest challenge is the re-structuring of the assets of some of the banks as it would be a tedious process, since most of the banks have poor asset quality leading to significant
Huge surplus manpower, absence of good work culture, antiquated labour laws, inflexible and inefficient labour and existence of strong labour union.
Competition from new players.
Keep pace with the fast growing technology.
The current business environment demands
An organization survives if it is performing well in the environment by being profitable but if it fails to do so the organization may not survive. And worse is the decay of both human and...