Evolution Of The Indian Banking Industry Essay

Indian Banking System: For the past three decades India's banking system has several outstanding achievements to its credit. The government's regular policy for Indian bank since 1969 has paid rich dividends with the nationalization of 14 major private banks of India. The first bank in India, though conservative, was established in 1786. From 1786 till today, the journey of Indian Banking System can be segregated into three distinct phases. They are as mentioned below:

Banking industry is highly competitive as there is high exit barrier. Moreover, competitors are large and quite equally balanced. Additionally, as banking industry has emerged for hundred years, just about everyone who needs banking services already has them.

Banking in India originated in the last decades of the 18th century. The first banks were The General Bank of India, which started in 1786, and Bank of Hindustan, which started in 1790; both are now defunct. The oldest bank in existence in India is the State Bank of India, which originated in the Bank of Calcutta in June 1806, which almost immediately became the Bank of Bengal. This was one of the three presidency banks, the other two being the Bank of Bombay and the Bank of Madras, all three of which were established under charters from the British East India Company. For many years the Presidency banks acted as quasi-central banks, as did their successors. The three banks merged in 1921 to form the Imperial Bank of India, which, upon India 's independence, became the State Bank of India.

The financial sector in India is predominantly a banking sector with commercial banks accounting for more than 60 percent of the total assets held by the financial system. India 's services sector has always served the country 's economy well, accounting for about 57 per cent of the gross domestic product. The financial services sector has been an important contributor to the country gross domestic product (GDP) accounting for nearly 6 percent share in 2014-15. The success of their financial sector is from the

A variety of new trends and innovations have expand in banking industry. Some are positive and negative, but some show a mix of plus and minus. Government has been really concern and increasingly keeping eyes on these case, especially after 2008 financial crisis.

Banking industry plays a very important role in the economic growth of a country. Mergers and Acquisitions have become a positive way for growth in the size of banks which in turn play a significant role in entering the competitive global financial market. The Indian banking sector can be divided into two eras, the pre liberalization era and the post liberalization era. In pre liberalization era government of India nationalized 14 Banks on 19 July 1969 and later on 6 more commercial Banks were nationalized on 15 April 1980. In the year 1993 government merged The New Bank of India and The Punjab National Bank and this was the only merger between nationalized Banks, after that the numbers of nationalized Banks reduced from 20 to

The Mission statement of the bank is to “help you make progress toward your goals”. Which means to provide simple ways to spend, save and manage the money of the consumers. Nowadays, banks operate in those sectors where the environment is stable but nonetheless many banks are facing aggressive competition but fighting back to the competition is vital role to play to generate

India has been under the rule of many kingdoms. Each allowed for a certain practice of monetary exchange for a fixed or variable time period.

There are so many laws enacted by government of India to regulate banking activity. The RBI was established under Reserve Bank of India Act 1934. RBI regulates the banking activities in India. Other than this there are other laws like

India has a financial system that is regulated by independent regulators in the sectors of banking, insurance, capital markets, competition and various services sectors. In a number of sectors Government plays the role of regulator.

Singh Jagwant (1993) in his book is concerned with trends and changes in productivity with particular emphasis on employee and branch productivity in the Indian banking industry. It determines the level of productivity and its growth during the period 1969-85. The 22 public sector banks i.e. banks of the SBI group and 14 nationalised in 1969 have been taken up for the study. The study attempts to make cross-sectional and intertemporal analysis on the basis of 17 indicators. The indicators have been divided into 3 categories which measure labour productivity, branch productivity and financial productivity. T-scores have been used for giving ranking to the banks. The ranking of the banks reveal that most significant improvement in the ranking was achieved by Indian Bank and Indian Overseas Bank. From the SBI group the performance of State Bank of India was better.

Banking in India has its origin as early as the Vedic period. It is believed that the transition from money lending to banking must have occurred even before Manu, the great Hindu Jurist, who has devoted a section of his work to deposits

Opinions differ as to the origin of the work "Banking". The word "Bank" is said to be of Germanic origin, cognate with the French word "Banque" and the Italian word "Banca", both meaning "bench". It is surmised that the word would have drawn its meaning from the practice of the Jewish money-changers of Lombardy, a district in North Italy, who in the middle ages used to do their business sitting on a bench in the market place. Again, the etymological origin of the word gains further relevance from the derivation of the word "Bankrupt" from the French word "Banque route" and the Italian word "Banca-rotta" meaning "Broken bench" due probably to the then prevalent practice of breaking the bench of the

"Generation Next" segment: (426 million young Indian between age group of 15-34 years see life and life-style very differently)- This is going to be the target in immediate future. It is currently urban phenomenon but it would not be too long when it will emerge in rural India also. They are tech-savvy and prefer electronic channel. They seek financial information from variety of sources and are very fickle shoppers. Banks will have to leverage technology and develop E-based products to tap this segment

Banking in India has its origin as carry as the Vedic period. It is believed that the transition from money lending to banking must have occurred even before Manu, the great Hindu jurist, who has devoted a section of his work to deposits and advances and laid down rules relating to the interest. During the mogul period, the indigenous bankers played a very important role in lending money and financing foreign trade and commerce. During the days of East India Company, it was to turn of the agency houses top carry on the banking business. The general bank of India was the first joint stock bank to be established in the year 1786.The others which followed were the Bank of Hindustan and the Bengal