Universal Banking by Imran

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TABLE OF CONTENT

SR.NO| TOPIC| PAGE NO|
1| EXECUTIVE SUMMARY| |
2| INTRODUCTION | |
3| HISTORY| |
4| DEFINITION AND CONCEPTS| |
5| UNIVERSAL BANKING MODEL| |
6| ADVANTAGES & LIMITATIONS| |
7| UNIVERSAL BANKING IN INDIA| |
8| KHAN COMMITTEE ON UNIVERSAL BANKING & FIS| |
9| NEED OF UNIVERSAL BANKING IN INDIA| |
10| UNIVERSAL BANKING: SOLUTION TO FIS PROBLEMS| |
11| APPROACH TO UNIVERSAL BANKING| |
12| RBI GUIDELINES| |
13| UNIVERSAL BANKING - CURRENT POSITION IN INDIA| |
14| SWOT| |
16| THE FUTURE TREND OF UNIVERSAL BANKING IN DIFFERENT COUNTRIES| | 17| ISSUES & CHALLENGES IN UNIVERSAL BANKING| |
18| UNIVERSAL BANKING: AN OVERVIEW| |
19| COMMENTS/VIEWS OF EXPERTS| |
20| CASE STUDY| |
21.| CONCLUSION| |
22.| BIBLIOGRAPHY| |

Executive Summary

The latest mantra is Universal Banking, which is combination of Commercial & Investment Banking. The concept is most relevant in the United Kingdom and the United States, Barclays Bank, Chase Manhattan and Citicorp are some of the examples of it. Where historically there was a distinction drawn between pure investment banks and commercial banks. In the US, this was a result of the Glass-Steagall Act of 1933. In both countries, however, the regulatory barrier to the combination of investment banks and commercial banks has largely been removed, and a number of universal banks have emerged in both jurisdictions. However, at least up until the global financial crisis of 2008, there remained a number of large, pure investment banks. In other countries, the concept is less relevant as there is not regulatory distinction between investment banks and commercial banks. Thus, banks of a very large size tend to operate as universal banks, while smaller firms specialised as commercial banks or as investment banks. This is especially true of countries with a European Continental banking tradition. Notable examples of such universal banks include Deutsche Bank of Germany, and UBS and Credit Suisse of Switzerland. Universal banking is the solution to FIs problems. A universal bank participates in many kinds of banking activities and is both a Commercial bank and an Investment bank. The merger of ICICI and ICICI bank is probably the largest merger seen in corporate India Industry, which has redefine banking in the highly competitive era of globalization and liberalization. Post merger, the new entity- ICICI Bank is the first Universal Bank in India and the second largest commercial bank in the country after SBI. Financial Institutions & Insurance Companies are now merging ahead to capture new business areas and leading towards Universal Banking. The banking sector deregulation that took place in India during the early 1990s posed a threat to the survival of Development Financial Institutions (DFIs). They were cut off from the concessional funding extended by the government and were exposed to intense competition from local and foreign banks. Over a period of time, Industrial Credit and Investment Corporation of India Ltd. (ICICI), which was set up as a DFI in 1955, underwent significant changes to meet these challenges. To exploit the synergies brought by universal banking, it went in for mergers and acquisitions and finally reverse merged with its subsidiary ICICI Bank. The mid-eighties marked the beginning of the shift to a buyers` market in the banking space, and Bank of Baroda, was among the first to grasp this pressing imperative. The bank orchestrated its business strategies around the centrality of the customer. It diversified rapidly into the areas of merchant banking, housing finance, credit cards and mutual funds. The strategy also entailed the sustained development of a string of segment - specific branches entrenching operations in profitable markets, the world over. The drive was to revamp overseas operations and intensify structural changes across...
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