There are other types of banking systems also. They are, Group Banking: In group banking two or more seperately, incorporated banks are brought under the control of a holding company. The holding company controls all the units in the groups. Howeveer, each bank has a seperate entity. The banks so brought together may be unit [...]
Continue reading → In every country commercial banks keep a certain proportion of their cash reserves with the central bank. For a long time, these cash reserves were looked upon as a means of promoting liquidity and solvency of the commercial banking system. But in recent years, it ia looked upon as a technique of credit control. The [...]
Continue reading → Commercial banks play a crucial role in the development of countries. It is no exaggeration to say that without the evolution commercial banking (in 18th and 19 centuries) industrial revolution would not have taken place in England. It is also true to say that without the sound commercial banking under developed countries would not have [...]
Continue reading → Banks which perform on the principle of co-operation are called co-operative banks. They are promoted to meet the banking requirements of consumers. They are established not only in rural areas but in urban areas as well. The cooperative banks function like commercial banks. Like commercial banks they receive deposits and lend money. In rural areas [...]
Continue reading → The social responsibilities of an organisation mean to pursue those policies, to make those decisions or to follow those lines of action which are desirable in terms of the objectives and values of society. The banking industry is a cooperative body. It has an awareness of its social responsibility to the community. It makes it [...]
Continue reading → Factoring has been a common practice in the U.K. and U.S.A. Oflate, in India a factoring market has been developed. “Factoring” is a continuing arrangement between a finance institution(factors) and a business concern(the client) selling goods and services to trade customers(the customers) whereby the factors purchases the client’s book depts(accounts) receivable either with or without [...]
Continue reading → FIRPS is an instrument which facilitates remittance of money from foreign countries. It relates to foreign inward remittance. NRIs or foreign nationals can remit money in foreign currency to any persons in India. For this an order is issued by the bank abroad to its correspondent bank in India. The order specifies a sum to [...]
Continue reading → Traveller’s cheques are issued to persons who frequently travel within the country or abroad. They are generally drawn for certain round sums. They are encashable at the current exchange rate. Its holder signs it at the place appointed for the purpose. He has to sign it again in the presence of the banker to whom it [...]
Continue reading → Fourteen major banks with deposits of 50 crores or more were nationalised in july 1969. In the second phase, another six banks with deposits of Rs. 200 crores or more were nationalised of banks was described as historical case for nationalisation. The government’s case for nationalisation was based on the following points. 1. Ownership and [...]
Continue reading → The major aspects of E-Banking service include Credit cards: Bank credit cards are a form of common loan, a revolving credit account that has a credit line of a specific amount that can be borrowed against in part or in full. Bank credit cards are widely used by many customers because of its various tangible [...]
Continue reading → The formation of the State Bank of India aims at promoting planned economic development of the country. The development activities of the SBI and its subsidiaries are manyfold. Besides opening new branches in non-banking areas SBI and its subsidiaries finance agriculture, the cooperative movement and small scale industries. By March 1995 the SBI and its [...]
Continue reading → Regional Rural Banking occupies an important place in the advancement of rural banking. In 1975 a working group under the chairmanship of Shri. Narasimham was appointed. The purpose was to review the position of lending specially to target groups. The appointment of committee became a necessity in view of limited role played by commercial banks. [...]
Continue reading → Bank’s Credit Card system has become popular. Banks issue credit card to the customers of high credit worthiness. Such cards are issued at free of charge. The credit card convenience to its holders. This enables a customer to purchase goods or services from leading establishmnets upto a certain limit. Immediate payment is not necessary for [...]
Continue reading → Economists used to distinguish between commercial banking, investment banking mixed banking systems. England was the home of the pure commercial banking. Pure commercial banking is one where commercial banks mobilise deposits is to lend for short periods only. Industries require short-term capital to purchase raw materials, intermediate products and so on. The pure theory of [...]
Continue reading → Modern banking in India owes its origin to the English Agency Houses in the days of the East India Company. These were, in fact, trading firms carrying on banking as part of their business. These agency houses had no capital of their own and were depending entirely on deposits. Such a combination of trading with [...]
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