Indian Financial Sector: Focus on Indian Banking Environment

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Introduction - Financial sector overview Indian Financial Sector is a well diversified arena experiencing high growth and development. The financial sector of India is comprised of commercial banks, insurance companies, non-banking cooperations, pension and mutual fund houses and lot more other financial institutions serving the Indian Economy. However, the financial sector is a major ly dominated by the Bankin Sector where the commercial banks comprise of 60 percent of total assets held by the financial system followed by Insurance Sector. Apart from the Banks and Insurance Companies, financial sector also comprise of Non-Banking Finance Companies also known as NBFC which in operate in specialized segments of micro finance,…show more content…
Initially, the payment system which was ruled by checques and drafts is now replace with electronic funds transfer in the form of RTGS and NEFT transfers which are also low cost services to transfer funds. Also, apart from basic functions, banks are now also offering investment banking services, wealth management services, foreign exchange services and brokng services which generates income for the banks through commissions. Ancilliary Services: In order to make banking a pleasurin experience, most of the banks have now startd their 24*7 phone banking services, ATM Machines and Door Step Banking. Any special issue about the banking sector in this country: One of the most debated issue in Indian Baking Sector is the growing number of Non-Performing Loans and Restructured Loans in the nation along with supremacy of public sector banking. Although, Indian Banks went off the financial crisis with least difficulty but now the situation is alarming. At present, of the total loans disbursed, 3.5% of them accounts as Non-Performing Loans. (India’s public-sector banks are sitting on something unpleasant) Second, and more alarming situation is related to restructured assets which are still rising faster. The total amount of restructured loans are 6% of loan base, but it has been reported that banks are misusing restructuring to disguise debts that are mosy likely never to be repaid. As per latest findings by rating
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