1. Evolution of Banking

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MBA 3

rdrd

_Term

N.

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

 FF

irst Commercial bank established in 1806 at Calcutta by East India

Compan

Company -

y - Bank of Be

Bank of Bengal or Pr

ngal or Presidency Ba

esidency Bank 

nk  followed

followed by Bank of

by Bank of

Bombay and Bank Of Madras



The Presidency Banks

The Presidency Banks became IMPERIAL

became IMPERIAL BANK

BANK O

O

FF

INDIA in 1921 

combined functions of a central bank and a commercial bank



RBI established in 1935. Central banks functions transferred to RBI



 FF

irst Development

FF

inance In

inance Institution estab

stitution established i

lished in 1948 

n 1948  II

FF

CI, through

an A

an Act of

ct of Parliament

Parliament



In 1955, Imperial Bank nationalized and named State Bank of India



In 1959, Banks in princely states na

In 1959, Banks in princely states nationalise

tionalised

d and brought unde

and brought under SBI

r SBI



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

 DICGC launched as a subsidiary of DICGC launched as a subsidiary of RBIRBI



 IDBI Act and formation of IDBI in IDBI Act and formation of IDBI in 1964. SFCs established at the State level e.g. KSFC1964. SFCs established at the State level e.g. KSFC The emerging philosophy: DFIs would help in starting up

The emerging philosophy: DFIs would help in starting up industries and business,industries and business, Commercial banks would help their operations. Both IDBI and IFCI were direct Commercial banks would help their operations. Both IDBI and IFCI were direct lending and refinancing institutions.

lending and refinancing institutions.



 1969: 1969: NationalisationNationalisation of 14 Banks of 14 Banks with aggregate with aggregate deposits of Rsdeposits of Rs. 50 crores. 50 crores whenwhen Indira

Indira Gandhi was the PM and launch of the Lead bank scheme. 6 more banksGandhi was the PM and launch of the Lead bank scheme. 6 more banks nationa

nationalisedlised in 1980 with Rsin 1980 with Rs. 2000 cro. 2000 croresres deposdepositsits



 1975: Lead Bank Scheme for acceleration of rural development. 336 districts 1975: Lead Bank Scheme for acceleration of rural development. 336 districts werewere identified; State B

identified; State Bank, its subsidiaries and the Nationalisedank, its subsidiaries and the Nationalised banks were asked tobanks were asked to sponsor a bank in

sponsor a bank in an underdeveloped District.an underdeveloped District.



 1984-1987: 1984-1987: Banks repBanks reported orted major losses major losses  NarasimhamNarasimham CommitteeCommittee Recommendations,

Recommendations, 1991 aimed at 1991 aimed at improving profitability of Banks. 1998,improving profitability of Banks. 1998, Narasimham

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F

inancial Services M

FF

, I

, Ins, ARCs.

ns, ARCs.

FF

actoring, CiBIL,

rating, Merchant Banking,

rating, Merchant Banking, Brokerage

Brokerage

F

unding projects with long

term exposure

Enter

Capital m

Capital markets,

arkets, licences

licences

to

new private banks, foreign bank br,

PLR free

Core banking,

A

TMs, onli

TMs, online

ne

banking, M&A

SAR

FF

AESI ACT

, 2002,

, 2002, BASEL I

BASEL II

I

2008, SBI tak

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Aggregate

Aggregate Deposit Deposit : : Rs.4161Rs.4161354354 Cash

Cash in in Hand Hand : : Rs.212745Rs.212745 Investments

Investments : : Rs.1377910Rs.1377910 Bank

Bank Credit Credit : : Rs.2847595Rs.2847595 CD

CD Ratio Ratio : : 71.04%71.04% Economic Indicators Economic Indicators India's

India's Exports Exports (07-08): (07-08): $155.40 $155.40 bnbn India's

India's imports imports (07-08) (07-08) $2$235.70 35.70 bnbn Service

Service Sector Sector % % in in GDP: GDP: 61.8%61.8% Money

Money SuppSupply ly ExpnExpn (Mar (Mar 09) 09) 19.4%19.4% India's

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Holding Holding company company Commercial Commercial bank bank Mortgages Mortgages Consumer Consumer finance finance Securities Securities operations operations Insurance Insurance operations operations Mutual Fund Mutual Fund

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1. 1. In whi

In which y

ch year wa

ear was the fi

s the first com

rst commer

mercial

cial ban

bank of the co

k of the countr

untryy

established?

2. 2. Wha

What was th

t was the name b

e name by which

y which SBI wa

SBI was prev

s previousl

iously kn

y known?

own?

3. 3. In w

In whic

hich y

h yea

ear wa

r was RB

s RBI est

I estab

ablis

lishe

hed?

d?

4. 4. Wh

Whic

ich

h wa

was th

s the f

e fir

irst D

st D

FF

I of the country?

5. 5. Who

Who was th

was the Pr

e Prime M

ime Minis

inister of th

ter of the coun

e country w

try when b

hen banks w

anks were

ere

nationalised?

6.

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



The nati

The nationali

onalisation

sation of banks was a hi

of banks was a historic

storic

and momentous event in

and momentous event in the history of

the history of India

India..

Explain.



T

Trace the trans

race the transformati

formation of Icic

on of Icicii into a high

into a high

street bank

