Industry Analysis of Banking Sector

Topics: Banks of India, Bank, Government-owned banks in India Pages: 6 (1768 words) Published: December 4, 2012

An analysis of banking sector in India

The liberalization brought in 1991 has swept the economic landscape of thecountry. The automobile industry is one of the invisible faces of liberalization .For the people who were used to many years of Ambassador cars with various models notdifferent in anyway except a few changes in every model, the arrival of Maruti heraldedthe beginning of a new experience in automobile comfort. It was the same with BajajChetak. Its obnoxious horn and the tilt and start symbolized the deplorable technology towhich an Indian consumer was treated. We are thus living in the era of change.Banking sector is no different. The changes in banking in the last decade areunparalleled when compared to the entire period of banking history in India. Profitability,which remained a taboo for bankers for years since independence, has become a buzzword today. Our banks modeled on British banks, which erected awesome buildingto scare the public in the garb of being a sentinel of public money, today go for boutique banking to be as close to public as possible. Thus, competition fuelled by technologydrives banking today.It is becoming increasingly clear that ' Technology ' alone can make bankers sail through the competition. Computerization of branches, introduction of cashmanagement products, remote access login for corporates, Banking Company is defined as “a company, which transacts the business of banking in India . The Banking Regulation Act defines the business of banking by stating the essential functions of a banker .It also states the various other businesses a banking company may be engaged in and prohibits certain businesses to be performed by it.” mobile banking, Internet banking and ATM banking are a few ways by which bankers use technology today to beat the competition

The Indian banking can be broadly categorized into nationalized (government owned), private banks and specialized banking institutions. The Reserve Bank of India acts a centralized body monitoring any discrepancies and shortcoming in the system. Since nationalization of banks in 1969 the public sector banks or the nationalized banks have acquired a place of prominence and has since then seen tremendous progress. The need to become highly customer focused has forced the slow-moving public sector banks to adopt a fast track approach. Further the focus of government policy was to develop cooperative sector and rural areas. Further with liberalization of world economies the government permitted the public sector also to operate in banking sector since 19991. At present the Indian financial system consists of public, private, cooperative, development and foreign banks. To control and regulate the operation of all these banks the authority has been vested to Reserve Bank of India and it is the central controlling authority for all banks in India. These are explained here in detail in the following paragraphs:

Public Sector Banks

Nationalised banks dominate the banking system in India. These banks are under the control of central and state governments. They are providing a variety of services to the customer in India. The services offered include deposits, loan, locker facility, project finance, consultancy service, documentation facility, agency service, foreign exchange, dematerlisation of stock account, internet banking, on line banking, credit card, ATM service, electronic fund transfer, government business, Gold Card Scheme for exports, Depository services, credit products, Mortgage service, mutual funds, insurance schemes and many other services. Their services are totally customized. There is a big list of these banks in India given below: (a) Allahabad Bank

(b) Andhra Bank
(c) Bank of Baroda
(d) Bank of India
(e) Bank of Maharashtra
(f) Canara Bank
(g) Central Bank of India
(h) Corporation Bank
(i) Dena Bank
(j) IDBI Bank
(k) Indian Bank
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