: a Study on Deposit Mobilisation of Foreign Banks in India

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  • Topic: Bank, Deposit account, Money market deposit account
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  • Published : January 11, 2013
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Topic: A STUDY ON DEPOSIT MOBILIZATION OF FOREIGN BANKS IN INDIA

Authors:

Dr.K.Karthikeyan,
Associate Professor of Commerce,
Vivekananda College, Tiruvedakam West-625214
Mobile: +91- 9865074994
Email: karthikeyanmadurai@gmail.com

S.Vadivel Raja
Research Scholar,
Department of Commerce,
Vivekananda College, Tiruvedakam West-625214
Mobile: +91- 9842552084
Email: vadivelraja77@rediffmail.com

A Study on Deposit Mobilization of Foreign Banks in India
(Dr.K.Karthikeyan & S.Vadivel Raja )
Abstract
The process of economic growth needs development of capital resources. Banking sector plays a vital role on distributing the money for the development of trade, industry are commerce. In simple words bank is an institution, which deals in money are credit. The paper deals with trend and growth of deposits of foreign banks operating in India. The study mainly based on secondary data. Statistical tools have been used like mean, percentage, CAGR ands Trend analysis. The study covers a period of 13 financial years from 1999 to 2011. The finding revealed that the foreign banks recorded increasing trend in mobilizing total deposits. But growth rate is fluctuating trend during the study period. Introduction

Banks will have to play an important and larger role in proving support to economic development. According to proof Sayers, “Banks are institutions whose debts usually referred as ‘bank deposits’-are commonly accepted in final settlement of other people’s debts”. The Indian banking or financial system comprises commercial banks, co-operative banks, financial Institutions and Non-banking financial companies. The commercial banks include public sector banks, private sector banks and foreign banks. While the public sector banks are the creation of the enactments of the parliament, private bakes, under the Banking Regulation Act 1949 are deemed as banking companies. Foreign banks are a recent addition to the Indian banking system and their existence and operations are determined by the RBI guidelines of February 2005. Foreign banks should be allowed to open offices in India either as branches or as subsidiaries. This would improve competitive efficiency as well as upgrade work and technology. They should conform to or fulfill the same or similar social obligations as the Indian Banks. Foreign exchange banks are those banks which are incorporated outside India and their head offices are also situated outside India. These banks were established in India during the 19th century and the early 20th century. The organized system of banking originated in India with the establishment of the exchange banks. These banks established in India mainly due to the development of trade with financing of foreign trade and associated activities, they opened branches only in the port towns like Bombay Calcutta and Madras. In the early 1990s has been water shed for the Indian economy under this model, foreign capital has been invited to the country to aid its growth and development. Foreign capital, in the form of foreign direct investment (FDI) and foreign Institutional investment (FII) , is permitted in almost all the sectors of the economy. The adoption of LPG (Liberalization, Privatization, Globalization) in India according to the guidelines of (WTO)World Trade Organization, foreign banks have been granted license to operate in India. In commensurate with this new development, FDI to extent of 74% (49% before the march 2004) in private banks and 20 % in public sector banks has been allowed. However voting right of the foreign investor is capped at 10% thereby ensuring that local banks are not taken over by foreign banks As on march 31,2012 there were 41 foreign banks operating in India and they account for 5% of the total banking business. Statement of the problem

Mobilization of savings through intensive deposit collection has been regarded as the major task of banking in...
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