Deposit Mobilization Of Scheduled Commercial Banks

The United States Congress chartered the Second National Bank in 1816 in order to control unregulated currency at the state-level banks. After several states questioned the constitutionality of the bank, Maryland imposed a tax on all banks that were not chartered by the state. By 1818, Maryland approved legislation of taxing the Second National Bank of the United States that was chartered by Congress, which is part of the Federal Government.

There are valuable contributions of the Dodd-Frank Act to financial institutions: high capital requirements, which particularly for those systemically important banks; creation of the CFPB; new authority to wind down the unsuccessful financial institutions; as well as better transparency for derivatives and swaps trades.

Central bank persuades commercial bank to decrease their rates of interest on deposit from the public. Commercial bank took this action because it will reduce the level of saving and increase the purchase of goods and services from the public. For example, when the central bank will reduces the interest rate of fixed deposit from 10% to 5%, as a result the consumer will saving less and spending more. This step will help the central bank to control the economic to become better.

Basic or primary functions of a bank are very important in nature. These functions provide base to the whole operation of the bank. The basic functions of a bank are as follows :

The Banking sector in India has always been one of the most preferred avenues of employment. In the current decade, this has emerged as a resurgent sector in the Indian economy. As per the McKinsey report ‘India Banking 2010’, the banking sector index has grown at a compounded annual rate of over 51 per cent since the year 2001, as compared to a 27 per cent growth in the market index during the same period. It is

A safe financial system is central to the development and successful market economy, and an essential condition for growth and stability of the economy as a whole. This system is the basis for mobilizing and distributing savings and facilitates its daily operations. Therefore, it is extremely important to create a sound financial system. After creation of a well established financial system, money and capital markets can develop especially primary and secondary markets of national government securities. The financial system has a significant impact on GDP growth and its main part - the national income on development of enterprises and sectors of the economy, and financial situation of the general population.

Commercial banking centers are going through drastic changing times. Nationwide most major banks are gradually closing their branches. Across the country banks are disappearing. The rise of technology and convenience of smart phones is making retail banking an uncertain career choice. The one area that needs to be focused on is what goes on inside a commercial bank, because for many financial centers, it has been the image to the public.

The saving rate of any country is an important indicator of economic development since the domestic saving rate is directly related with the investment rate and the lending capacity of the banking system. Saving and investment are two key macro variables with micro foundations, which play a significant role in economic growth. Global emerging economies are experiencing record savings at a time when the developed world has been witnessing a decline in gross domestic saving rates, having a positive impact on the investment

Today, its vital role in commercial banking activities lie in the direct effect it has on total economic growth and business development. Every year the (CBN) central bank of Nigeria being the monetary authority that is solely responsible for the insurance of guidelines policies and the interpretation of such, comes up with economic measure roles and regulation under which the bank in the country operate. Such policies direct the use of funds from depositors, stockholders, and creditors in order to control the size of loan portfolio thereby determining the general circumstances under which it is appropriate to make an advance. The monetary policies also aim at aiding the banks to maintain a sound financial and banking system promote confidence in sustenance of reasonable banking services for public as well as ensuring a high standard of conduct and professionalism in banking industry. These rules and regulations are contained in monetary policy circular being issued by the central bank at the beginning of every year.

Today’s banking system very much gives us the hint about the banking system say 20 to 25 years from now. Digitization promises to automate and improve many banking processes. Yet it’s not without peril: customer demands and expectations are increasing, and technology is fuelling the emergence of significant new competitors.

Financial sectors all over the world is going through the process of transformation such as, liberalization, technological innovations and deregulation. The evolving financial system in India has been interlinked with the growth of the macro economics. This change allows financial institutions to bring in assortment of new product and services into the economy. Financial institutions play a prominent role in stimulating the economic growth in a country, they help to mobilize the savings and channelize the funds as investments into the sectors which requires it. Government has played a prominent role in creation and structuring the financial system in the country. The government also controls and influences the flow of credit in an economy and its direction through its fiscal policies.

Banks are playing a very important role in the economic development of a nation. The healthiness of the economy is directly connected to the soundness of its banking system. The role of banks has placed them as a very valuable partner in the process of economic development. Nowadays, banks are very useful for the utilization of the assets of a nation. If there would be no banks then a large segment of assets in the country would stay idle.

Right from our childhood days, our parents teach us that save penny and earned penny. The phrase highlights the significance of individual and household savings. With the passage of time, our elders constantly tell us that we should spend less than we earn and save some part for uncertain and better future use. Our elders also educate us to use resources and money according to our income, and our expenses should be less than our income. From the classical days, saving has been considered as one of the element of expansion and growth. In Indian economy, the household sector contributes the lion’s share of the total savings. As far as the household and rural household sector is concerned they have remarkable saving potential which has not been considered seriously by the policy makers and hence, measures have not been chartered to organize these enormous savings.

Distribution in financial services marketing is concerned with how the service is delivered to the customer, making sure that it is available in a place, at a time and in a format that is appropriate and convenient for the customer.

The Banking Industry plays an important role in the economic development of the country and is the most dominant segment of the financial sector. Banks encourage economic growth by allocating savings to investments that have potential to yield higher returns. They perform their basic role of accepting deposits and lending funds from these deposits. Banks securely save the money of depositors, provide interest to them, and lend the funds raised from depositors to consumers. They are in a wide range of sizes, from large Global Banks to Regional and Community Banks. We can study the structure of an organized banking industry by taking an example of Indian banking industry: