Since the origin of the Banking Sector in India, it has seen remarkable changes and to keep on with the rhythm of progress, it has successfully adopted the changes as well. India, also being accounted for the country having one of the highest populations in the world, there has always been a never-declining crave for funds to carry on their livelihood. Thus the onset of Banking Industry proved to be a boon for all the Indians.’ Banks are considered the backbone of a country’s economy. Its more true for a developing country like India. Indian Banking system is very strong. In the global financial turmoil that happened sometime ago, our country was least affected because of soundness of Indian Banking and Financial system. In fact many countries of the world are trying to learn lessons from our disciplined system of Banking. Banks in India are not only strong but are also growing fast. According to studies. Banking sector is one of the fastest growing sectors in the country. This growth has brought many opportunities.
People got easy access to funds in order to fulfill their dreams and desires. From that time onwards, as the needs of the human grew, desire for more money also grew accordingly. Thus there was a need felt for more and more fund-raising institutions. As a consequence of such demand for funds, a number of Banks took their birth. The period after 1970’s saw rapid expansion of the banks in India under the control of the Government. It was the direct impact of the nationalization of the banking sector. This enabled each and every individual to steal the opportunity to have easy access to funds. This banking sector not only proved to be a source of funds but also new avenues of employment. It became a source of earning bread and butter for many people. In the mid 1990’s, the liberalization of the economy led to the emergence of the private players in the existing scenario. This provided much better and easier accessibility of funds to the people. Their late arrival in the market enabled them the state-of-the-art technology. This helped them to work more effectively and efficiently in the market and thus outperformed their public sector counterparts. This helped the private sector banks to expand manifold.
BANKING SECTOR IN INDIA
A bank is an institution that deals in money and its substitutes and provides other financial services. Banks accept deposits and make loans or make an investment to derive a profit from the difference in the interest rates paid and charged, respectively.
In India the banks are being segregated in different groups. Each group has their own benefits and limitations in operating in India. Each has their own dedicated target market. Few of them only work in rural sector while others in both rural as well as urban. Many even are only catering in cities. Some are of Indian origin and some are foreign players.
India’s economy has been one of the stars of global economics in recent years. It has grown by more than 9% for three years running. The economy of India is as diverse as it is large, with a number of major sectors including manufacturing industries, agriculture, textiles and handicrafts, and services. Agriculture is a major component of the Indian economy, as over 66% of the Indian population earns its livelihood from this area. Banking sector is considered as a booming sector in Indian economy recently. Banking is a vital system for developing economy for the nation. However, Indian banking system and economy has been facing various challenges and problems which have discussed in other parts of project.
INDIAN BANKING SYSTEM
Indian Banking Scenario
Regulation of Banking system in India started with Banking Regulation Act, 1949. Banks in India used to be in private hands. In 1969, 14 big private banks were nationalised bringing them under the ownership of government. After 11 years, in 1980, six more banks were nationalised. Of...