Study of Risk Management in Indian Banks
Risk Management in Indian Banks; Public sector, Private sector, Foreign Banks & Cooperative Banks.
1. Introduction
1.1 Evolution & Growth of Banking in India
Banking in India was defined under Section 5(A) as "any company which transacts banking, business" and the purpose of banking business defined under Section 5(B),"accepting deposits of money from public for the purpose of lending or investing, repayable on demand through cheque/draft or otherwise". In the process of doing the above-mentioned primary functions, they are also permitted to do other types of business referred to as Utility Services for their customers (Banking Regulation Act, 1949).
The real roots of commercial banking in India can be traced back to the early eighteenth century with the establishment of the three presidency banks. Three Presidencies’ Banks were opened in Bengal (1809), Bombay (1840) and Madras (1843) with powers to issue Notes. In the year 1921, due to banking crisis during First World War, the three Presidency Banks merged to form Imperial Bank of India.
Between the 1865 & 1913 a number of Indian private bank emerged which are even reigning successfully today. The first bank which was exclusively set up by Indians was Allahabad Bank, followed by Punjab National Bank Ltd. set up in 1895 with headquarters at Lahore. Other private banks established during this period were Bank of India & Central Bank of India established in 1911, Bank of Baroda (1908); Canara Bank (1906), Indian Bank (1907) and Bank of Mysore (1913). Until 1935 all the banks which were set up only belonged to the private sector. In the absence of any regulatory framework, these private owners of banks were at liberty to use the funds as they wanted, they deemed appropriate and resultantly the bank failure & exploitation of the poor were frequent phenomenon. Therefore in order to control & regulate these banks the Reserve Bank of India was established.
Even after the formation as well as nationalization
1. Introduction
1.1 Evolution & Growth of Banking in India
Banking in India was defined under Section 5(A) as "any company which transacts banking, business" and the purpose of banking business defined under Section 5(B),"accepting deposits of money from public for the purpose of lending or investing, repayable on demand through cheque/draft or otherwise". In the process of doing the above-mentioned primary functions, they are also permitted to do other types of business referred to as Utility Services for their customers (Banking Regulation Act, 1949).
The real roots of commercial banking in India can be traced back to the early eighteenth century with the establishment of the three presidency banks. Three Presidencies’ Banks were opened in Bengal (1809), Bombay (1840) and Madras (1843) with powers to issue Notes. In the year 1921, due to banking crisis during First World War, the three Presidency Banks merged to form Imperial Bank of India.
Between the 1865 & 1913 a number of Indian private bank emerged which are even reigning successfully today. The first bank which was exclusively set up by Indians was Allahabad Bank, followed by Punjab National Bank Ltd. set up in 1895 with headquarters at Lahore. Other private banks established during this period were Bank of India & Central Bank of India established in 1911, Bank of Baroda (1908); Canara Bank (1906), Indian Bank (1907) and Bank of Mysore (1913). Until 1935 all the banks which were set up only belonged to the private sector. In the absence of any regulatory framework, these private owners of banks were at liberty to use the funds as they wanted, they deemed appropriate and resultantly the bank failure & exploitation of the poor were frequent phenomenon. Therefore in order to control & regulate these banks the Reserve Bank of India was established.
Even after the formation as well as nationalization