We are providing many paragraphs, long essay in very simple language with the boundaries of different words here. Here you can find Essay on Banking Sector in India – A Pillar for India’s Growth in English language for students in 1000 words. In this article cover Topic : Definition and types of bank, The origin of banks in the eighteenth century, SBI, the Reserve Bank of India and other banks in India, Nationalisation of banks, Liberalisation of banking sector after 1990, RBI and its role, Reforms suggested by the committees under the chairmanship of M Narsimhan, Recent various schemes and issues of banking sector in India and Introduction of MUDRA Bank and Banking Boards Bureau (BBB) and its main functions.
Banks are financial institutions, who obtain licenses to collect deposits from the public and provide loans to them. In that sense, they are different from traditional money lenders. There are two types of banks: retail or commercial banks and investment banks are different in the latter part by its methodology. Investment banks do not deal with the public
They are engaged in business clients and they invest in a wide range of their capital assets. The origins of banks in India is the beginning of the 18th century, when Bank of India was established in the modern sense. In India, the banks have crossed different stages and have adopted the economic conditions of the country, sometimes changing themselves. The largest and the oldest bank, came into existence in 1921 after the merger of State Bank of India (SBI) Madras and Bank of Bombay. SBI commands the number of banks in India as well as eight affiliated banks as well as their subsidiaries or affiliated banks.
The Central Bank, known as the Reserve Bank of India, was established in 1935. Under the Second Schedule of the Reserve Bank of India Act, Indian Bank is classified as Scheduled and Non-Scheduled Banks. Scheduled banks get mention of the schedule of the Reserve Bank of India Act. Scheduled banks are further classified: nationalized banks, SBI and associates, private sector banks, foreign banks and regional rural banks
In the year 1969, the Government nationalized 14 banks with the order of banking companies (Acquisition and Transfer of Acquisition) Ordinance. In the 1980s, commercial banks had a second nationalization process. These banks were privately owned and accounted for 85% of their settlement. Nationalization process transmitted them from class banking to large scale banking In this way, these banks were allocated with the government's fiscal policy.
In the banking sector there was another water improvement in 1990 to align with the government's new economic policy, the banking sector was liberalized. Licenses were granted to private banks, who changed the approach of the banking sector. Banks are now offering best practices around the world with the help of technology and management practices. ICICI, HDFC, Axis Bank are still the forerunners of private sector banks.
Central bank of india
Reserve Bank of India Central Bank, which monitors monetary policy. There is a monetary policy process in which the concerned authority controls the supply of money in the RBI economy in the case of India. The main objective of monetary policy is to investigate inflation and control the interest rates with cash flow or quantitative squeeze.
RBI with its various policy measures, CRR (cash reserve ratio - banks to keep a fixed deposit in cash), SLR (statutory liquidity ratios - to keep a part of their demand and time liabilities in the form of government security for banks for) ; RR (repo rate-rate at which RBI gives to scheduled commercial banks); RRR (reverse repo rate-rate, which RBI takes loans from banks) etc. controls the flow of money in the market.
After the economic crisis in 1991, two committees were formed under the chairmanship of M Narasimhan. This has been recommended for comprehensive improvement measures for the banking sector. In recent times, banking sector in India has been completed with various opportunities. Different schemes and issues of banking in India are given below:
Pradhan Mantri Jan Dhan Yajana (PMJDY) was launched in 2014 as a national mission of financial inclusion to provide universal and clear access to banking facilities. PMJDY provides various benefits like zero balance account, LIC cover of 30000, overdraft of 7 5000, mobile banking and Rupay debit card.
Nachiket Mor Committee gave its recommendations in 2014. Under this, every adult holding on Adhaar number will be given an option to open an account for transfer of benefits or subsidies to this account. Which will ensure financial inclusion. This account will be called Universal Electronic Bank Account.
Urjit Patel Committee working on monetary policy framework gave its recommendation in 2014. It suggested to establish Monetary Policy Committee (MPC) to be headed by RBI Governor in order to adopt new consumer price index for anchoring monetary policy and set the inflation target at 4% ± 2%. MPC has the potential to bring transparency and predictability in the system.
Non-Performing Asset (NPA) is another area of concern for banking sector. NPA is that loan where the borrower has failed to make interest or principal payments for 90 days after the maturity period. The Gross NPA of Public Sector Bank (PSB) rose to 6% in 2015.
Bank Board Bureau (BBB) Bank Boards Bureau (BBB) was established under the Chairmanship of Vinod Rai. BBB will ensure two major things: i.e. the appointment of Directors and Chairman of Public Sector Bank thereby setting aside government interference and ways to address bad loans.
This crisis has provided an opportunity to address the long pending improvement of government intervention in the management of public sector banks. BBB will also provide a roadmap for the merger of public sector banks, which will strengthen the banking sector and make it more robust. Another area with a promising future is Micro Units Development and Reinforcement Agency (MURRA). To provide credit to micro, small and medium enterprises (MSME), the new government has unveiled the Mudra Bank. For this area, a special bank will take a long way to ensure the smooth flow of credit.
Although Small Industries Development Bank of India (SIDBI) is in existence, but the viability of Mundra will depend on the range and debt collection of its customers. Under the differentiated license, it is expected to provide a complete suit of banking from small banks, but in the limited area its purpose is to increase the entry of the bank in unused areas. Reserve Bank of India has provided CRR and SLR norms for the discretionary operation of these banks.
But the real cause of concern is the NPA formation loan. Since they will deal with giving priority to regional lending, i.e. agriculture Knowing your customer (KYC) norms for opening bank accounts is a new concept and will conduct an investigation on the flow of black money. Therefore, it can be seen that under the leadership of the RBI, public sector banks of India (PSB) battled the financial crisis of 2008. The Reserve Bank of India has been a friend, philosopher and guide to the PSB of India with a tight monetary policy. Reserve Bank of India has set a good balance between indispensability and savings, thereby reducing inflation and increasing the investment.
For the time being, the banking sector has been stressed only due to the increasing NPA, but due to autonomy of the Reserve Bank of India in the introduction of BBB and monetary policy this region will have to undergo a storm and another in the wall of development and development of India. Brick will become .