Indian Banking: Paradigm Shift

INDIAN BANKING: PARADIGM SHIFT
Chapter 1
INTRODUCTION
Banking is "accepting, for the purpose of lending or investment of deposits of money from the public, repayable on demand or otherwise and withdrawable by cheques, draft, order or otherwise." Banker is defined as a person who carries on the business of banking. Banks also perform certain activities which are ancillary to this business of accepting deposits and lending. Since Banking involves dealing directly with money, governments in most countries regulate this sector rather stringently. Banks provide almost all payment services by conducting checking or current accounts for customers, paying cheques drawn by customers on the bank, and collecting cheques deposited to customers' accounts. Banks also enable customer payments via other payment methods such as telegraphic transfer. Banks have added new payment channels like Internet banking, Mobile Banking, ATMs etc. Banks' activities can be divided into retail banking, dealing directly with individuals; business banking, providing services to mid-size business; corporate banking dealing with large business entities; private banking, providing wealth management services to High Net worth Individuals; and investment banking, relates to helping customers raise funds in the Capital Markets and advising on mergers and acquisitions. Banks are now moving towards Universal Banking, which is a combination of commercial banking, investment banking and various other activities including insurance. Banks are among the main participants of the financial system in India. This section of the provides comprehensive and updated information, guidance and assistance on all areas of banking in India. The arrival of foreign and private banks with their superior state-of-the-art technology-based services pushed Indian Banks
also to follow suit by going in for the latest technologies so as to meet the threat of competition and retain customer base. Indian banking system has played a crucial role in the socio-economic development of the country. The system is expected to continue to be sensitive to the growth & development of all the segments of the economy . The efficiency of financial & banking sector through market-based reforms is an important concern of the of the new development paradigm . Indian banking system is no longer confined to metropolitan cities & large towns, Indian banks are now spread out into the remote areas of our nation. If not largest, Indian banking is one of the largest in the world today. Competitive pressures in the banking & financial sectors are building up both within & from outside the banking system. The face of banking changing quite rapidly & banks all over the world are reorienting their strategies, practices, products, etc. in true with their changing environment. Our professionals are at the forefront of technological change & financial development all over the world. It is time to harness these resources for development of Indian banking in the new millennium. Thus, India has to prepare itself for future & upcoming challenges in this age of universal & international banking . Globalization is the need of the day & banks in India have to prepare themselves for the economic growth of the country.
HISTORY
Without a sound and effective banking system in India it cannot have a healthy economy. The banking system of India should not only be hassle free but it should be able to meet new challenges posed by the technology and any other external and internal factors. For the past three decades India's banking system has several outstanding achievements to its credit. The most striking is its extensive reach. It is no longer confined to only metropolitans or cosmopolitans in India. In fact, Indian banking system has reached even to the remote corners of the country. This is one of the main reasons of India's growth process. The government's regular policy for Indian bank since 1969 has paid rich dividends with the nationalization of 14 major private banks of India. Not long ago, an account holder had to wait for hours at the bank counters for getting a draft or for withdrawing his own money. Today, he has a choice. Gone are days when the most efficient bank transferred money from one branch to other in two days. Now it is simple as instant messaging or dial a pizza. Money have become the order of the day. 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: Early phase from 1786 to 1969 of Indian Banks Nationalization of Indian Banks and up to 1991 prior to Indian banking sector Reforms. New phase of Indian Banking System with the advent of Indian Financial & Banking Sector Reforms after 1991.
Phase I
The General Bank of India was set up in the year 1786. Next came Bank of Hindustan and Bengal Bank. The East India Company established Bank of Bengal (1809), Bank of Bombay (1840) and Bank of Madras (1843) as independent units and called it Presidency Banks. These three banks were amalgamated in 1920 and Imperial Bank of India was established which started as private shareholders banks, mostly Europeans shareholders. In 1865 Allahabad Bank was established and first time exclusively by Indians, Punjab National Bank Ltd. was set up in 1894 with headquarters at Lahore. Between 1906 and 1913, Bank of India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank, and Bank of Mysore were set up. Reserve Bank of India came in 1935. During the first phase the growth was very slow and banks also experienced periodic failures between 1913 and 1948. There were approximately 1100 banks, mostly small. To streamline the functioning and activities of commercial banks, the Government of India came up with the Banking Companies Act, 1949 which was later changed to Banking Regulation Act 1949 as per amending Act of 1965 (Act No. 23 of 1965). Reserve Bank of India was vested with extensive powers for the supervision of banking in India as the Central Banking Authority. During those days public has lesser confidence in the banks. Moreover, funds were largely given to traders.
Phase II Government took major steps in this Indian Banking Sector Reform after independence. In 1955, it nationalized Imperial Bank of India with extensive banking facilities on a large scale especially in rural and semi-urban areas. It formed State Bank of India to act as the principal agent of RBI and to handle banking transactions of the Union and State Governments all over the country. Second phase of nationalization Indian Banking Sector Reform was carried out in 1980 with seven more banks. This step brought 80% of the banking segment in India under Government ownership. The following are the steps taken by the Government of India to Regulate Banking Institutions in the Country: 1949 : Enactment of Banking Regulation Act. 1955 : Nationalization of State Bank of India. 1959 : Nationalization of SBI subsidiaries. 1961 : Insurance cover extended to deposits. 1969 : Nationalization of 14 major banks. 1971 : Creation of credit guarantee corporation. 1975 : Creation of regional rural banks. 1980 : Nationalization of seven banks with deposits over 200 core. After the nationalization of banks, the branches of the public sector bank India rose to approximately 800% in deposits and advances took a huge jump by 11,000%. Banking in the sunshine of Government ownership gave the public implicit faith and immense confidence about the sustainability of these institutions.
Phase III This phase has introduced many more products and facilities in the banking sector in its reforms measure. In 1991, under the chairmanship of M Narasimham, a committee was set up by his name which worked for the liberalization of banking practices. The country is flooded with foreign banks and their ATM stations. Efforts are being put to give a satisfactory service to customers. Phone banking and net banking is introduced. The entire system became more convenient and swift. Time is given more importance than money. The financial system of India has shown a great deal of resilience. It is sheltered from any crisis triggered by any external macro economics shock as other East Asian Countries suffered. This is all due to a flexible exchange rate regime, the foreign reserves are high, the capital account is not yet fully convertible, and banks and their customers have limited foreign exchange exposure.
"Scheduled banks in India" means the State Bank of India constituted under the State Bank of India Act, 1955 (23 of 1955), a subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959), a corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, or under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980, or any other bank being a bank included in the Second Schedule to the Reserve Bank of India Act, 1934, but does not include a co-operative bank".
INDIAN BANKING STRUCTURE
"Non-scheduled bank in India" means a banking company as defined in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949), which is not a scheduled bank".
Nationalization Of Banks In India
The nationalization of banks in India took place in 1969 by Mrs. Indira Gandhi the then prime minister. It nationalized 14 banks then. These banks were mostly owned by businessmen and even managed by them. Before the steps of nationalization of Indian banks, only State Bank of India (SBI) was nationalized. It took place in July 1955 under the SBI Act of 1955. Nationalization of Seven State Banks of India (formed subsidiary) took place on 19th July, 1960. The State Bank of India is India's largest commercial bank and is ranked one of the top five banks worldwide. It serves 90 million customers through a network of 9,000 branches and it offers -- either directly or through subsidiaries - a wide range of banking services.
Conclusion Thus, going through all these phases the banking industry in India grew & enhanced with a new shine in this modern age of globalization.
Chapter 2
INDIAN BANKS & GLOBAL CHALLENGES

Financial services sector across jurisdictions is going through a strong phase of increasing globalization. Integration of economies leads to integration of financial markets catalyzing the globalization process. The growing role of the financial sector in allocation of resources has significant potential advantages for the efficiency with which our economy functions. Consequently, the adverse consequences of malfunction of the financial system are likely to be more severe than they used to be in the past. Hence, all efforts today are focused at ensuring greater financial stability. Given the significance of the Indian banking system, one cannot afford to underplay the importance of a robust and resilient banking system. The enhanced role of the banking sector in the Indian economy, the increasing levels of deregulation along with the increasing levels of competition have facilitated globalization of the India banking system and placed numerous demands on banks. Operating in this demanding environment has exposed banks to various challenges. The last decade has witnessed major changes in the financial sector - new banks, new financial institutions, new instruments, new windows, and new opportunities - and, along with all this, new challenges. Globalization A Challenge as well as an opportunity The benefits of globalization have been well documented and are being increasingly recognized. Globalization of domestic banks has also been facilitated by tremendous advancement in information and communications technology. Globalization has thrown up lot of opportunities but accompanied by concomitant risks. There is a growing realization that the ability of countries to conduct business across national borders and the ability to cope with the possible downside 11
risks would depend, inter-alia, on the soundness of the financial system and the strength of the individual participants. Adoption of appropriate prudential, regulatory, supervisory, and technological framework on par with international best practices enables strengthening of the domestic banking system, which would help in fortifying it against the risks that might arise out of globalization.
Global Strategies for Indian Banking System

(Overall Mode score of all banks)
5 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0

Consolidation Strict Corporate Governance Norms Regional Expansion (Both within India as well as Outside) Higher FDI limits FTA's
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Global challenges in Banking There are various challenges faced by Indian Banking Industry . Many of these challenges have aroused due to globalization of the banking industry. To recapitulate, a few broad challenges faced by the Indian banks in the following areas, viz., enhancement of customer service; application of technology; implementation of Basel II; improvement of risk management systems; implementation of new accounting standards; enhancement of transparency & disclosures; and compliance with KYC aspects. If we were to identify a few global challenges which banks face today, we would cover some common ground. An overview of the global challenges would include the following: Basel II implementation; enhancing corporate governance; alignment of regulatory and accounting requirements; outsourcing risks; and application of advanced technology. These aspects are discussed as under : Basel II Implementation:Basel II implementation is widely acknowledged as a significant challenge faced by both banks and the regulators internationally. It is true that Basel II implementation may be seen as a compliance challenge. While it may be so for some banks, Basel II implementation has another dimension which offers considerable opportunities to banks. Two opportunities that are offered to banks, viz., refinement of risk management systems; and improvement in capital efficiency . Comprehensive Risk Management:Under Basel I banks were focused on credit and market risks. Basel II has brought into focus a larger number of risks requiring banks to focus on a larger canvas. Besides the increase in the number of risks, banks are now beginning to focus on their inter-linkages with a view to achieve a more comprehensive risk management 13
framework. Basel II implementation, therefore, is being increasingly seen as a medium through which banks constantly endeavor to upgrade the risk management systems to address the changing environment. Further, in the initial stages, banks were managing each risk in isolation. It is no longer adequate to manage each risk independently. Enterprises worldwide are, therefore, now putting in place an integrated framework for risk management which is proactive, systematic and spans across the entire organization. Banks in India are also moving from the individual silo system to an enterprise wide risk management system. While the first milestone would be risk integration across the entity, banks are also aware of the desirability of risk aggregation across the group both in the specific risk areas as also across the risks. Banks would, therefore, be required to allocate significant resources towards this endeavor. Capital Efficiency:Basel II prescriptions have ushered in a transition from the traditional regulatory measure of capital adequacy to an evaluation of whether a bank has found the most efficient use of its capital to support its business i.e., a transition from capital adequacy to capital efficiency. In this transition, how effectively capital is used will determine return on equity and a consequent enhancement of shareholder value. In effect, banks may adopt a more dynamic approach to use of capital, in which capital will flow quickly to its most efficient use. This revised efficiency approach is expected to guide the return-on-equity strategy and influence banks business plans. With the extension of capital charge for market risks to the AFS portfolio this year and the coming into force of Basel II norms in March 2007, banks would need to shore up the capital levels not only for complying with these requirements but also for supporting the balance sheet growth. With a view to enhancing the options available to banks for augmenting their capital levels, the
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Reserve Bank has recently permitted banks to issue new capital instruments, including perpetual instruments. A notable feature of these instruments is that these are designed to help banks in not only managing their capital effectively but also efficiently. Enhancing Corporate Governance:Related Issues:The issues related to corporate governance have continued to attract considerable national and international attention in light of a number of high-profile breakdowns in corporate governance. This becomes all the more relevant for banks since they not only accept and deploy large amount of uncollateralized public funds in fiduciary capacity, but also leverage such funds through credit creation. Banks are also important participants in the payment and settlement systems. In view of the above, legal prescriptions for ownership and governance of banks in Banking Regulation Act, 1949 have been supplemented by regulatory prescriptions issued by RBI from time to time. Importance:In view of the importance of the banking system for financial stability, sound corporate governance is not only relevant at the level of the individual bank, but is also a critical ingredient at the system level. Effective risk management systems determine the health of the financial system. Corporate governance is, therefore,
the foundation for effective risk managements in banks and thus the foundation for a sound financial system. Therefore, the choices which banks make when they establish their risk management and corporate governance systems have important ramifications for financial stability. These systems can affect how the institution functions and how others perceive it in the marketplace.
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Governance Culture:A good "governance culture" is crucial for financial stability but since it is an intangible, rules may not be able to capture its essence effectively. Therefore, banks may have to cultivate a good governance culture building in appropriate checks and balances in their operations. There are four important forms of oversight that should be included in the organizational structure of any bank in order to ensure appropriate checks and balances : (1) oversight by the board of directors or supervisory board ; (2) oversight by individuals not involved in the day-to-day running of the various business areas ; (3) direct line supervision of different business areas ; and (4) independent risk management, compliance and audit functions. In addition, it is important that key personnel are fit and proper for their jobs. Although some ownership structures might have the potential to alter the strategies and objectives of a bank, these banks will also face many of the same risks associated with weak corporate governance. Consequently, the general principles of sound corporate governance should also be applied to all banks irrespective of their unique ownership structures. Compliance with international accounting standards:One of the prime international standards considered relevant for ensuring a safe and sound banking system is the Core Principles for Effective Banking Supervision issued by the Basel Committee on Banking Supervision (BCBS). Accounting standards are now a part of the set of twelve standards that have been identified by the Financial Stability Forum as conducive to a financial infrastructure. Financial reporting and prudential supervision have slightly different perspectives. While the former is oriented towards capturing the historical position, the latter has a forward looking element particularly with reference to measurement of impairment and capital. An important challenge, therefore, is to
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ensure that accounting standards and prudential frameworks are mutually consistent. While working towards achieving this consistency between the two sets of standards, it is essential for the regulators to be in a position to address any implications that the changes in accounting standards may have for the safety and soundness of banks. Outsourcing Risks :Banks are increasingly using outsourcing for achieving strategic aims leading to either rationalization of operational costs or tapping specialist expertise which is not available internally. Typically outsourced financial services include applications processing (loan origination, credit card), document processing, investment management, marketing and research, supervision of loans, data processing and back office related activities etc. Outsourcing might give rise to several risks including, strategic risk, reputation risk, compliance risk, operational risk, exit strategy risk, counterparty risk, country risk, access risk, concentration risk and systemic risk. The failure of a service provider to provide a specified service , ensure security/ confidentiality, comply with legal and regulatory requirements can lead to financial losses/ reputational risk for the bank and could also lead to systemic risks for the entire banking system in a country. Outsourcing banks, therefore, should take steps to ensure that the service provider employs the same high standard of care in performing the services as would be employed by the banks if the activities were conducted within the banks and not outsourced. Capacity Building :As dictated by the changing environment, banks need to focus on appropriate capacity building measures to equip their staff to handle advanced risk management systems and supervisors also need to equally equip themselves with appropriate skills to have effective supervision of banks adopting those systems. In
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the likelihood of a high level of attrition in the system, banks need to focus on motivating their skilled staff and retaining them. Skill requirements would be significantly higher for banks planning to migrate to the advanced approaches under Basel II. Capacity building gains greater relevance in these banks, so as to equip themselves to take advantage of the incentives offered under the advanced approaches. The demand for better skills can be met either from within or from outside. It would perhaps be worthwhile to first glean through the existing resources to identify misplaced or hidden or forgotten resources and re-position them to boost the banks efforts to capitalize on available skills. This does not determine the benefits that a bank may derive by meeting their requirements from the market, but is only intended to priorities the process.
Conclusion The global challenges which banks face are not confined only to the global banks. These aspects are also highly relevant for banks which are part of a globalised banking system. Further, overcoming these challenges by the other banks is expected to not only stand them in good stead during difficult times but also augurs well for the banking system to which they belong and will also equip them to launch themselves as a global bank.
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Chapter 3
INDIAN BANKING : PARADIGM SHIFT

INTRODUCTION:There has been a paradigm shift in the Indian banking industry since the calibrated and gradual deregulation process from the early 1990s. The shift has made markets more efficient and complex. It has also brought in uncertainties resulting from higher volatility in interest rates, exchange rates and commodity prices. Foreign banks will bring with a huge capital base, professional management and modern work culture. Indian banking is on a growth mode. Driven by robust economic growth, the financial sector is emerging strong , diversified and integrated. Not withstanding its strengths, certain vulnerabilities too exist, which merit attention and remedy. Indian banking is considered too fragmented by global standards with the top 10 banks accounting for about 65% of the banking assets and about 40 banks sharing among themselves 27% of the assets. Given the significance of scale in the context of global banking industry , too many banks sharing a low market share might lead to inefficiencies that could hinder sustained growth. Public sector banks have been quite successful in trimming the staff strength, but these banks need to... increase employee productivity to regional and global benchmarks. Fragmentation calls for consolidation, an issue that has not been addressed adequately in the Indian banking industry. Though some distressed banks have been merged or amalgamated with a few existing ones, no major policy initiative in designing an effective structure of the banking industry that would cope with the emerging trends in global banking .Even with these limitations, Indian banking is showing great promise and progress. It has been able to impress and influence global markets by its smart turnaround with relatively low fiscal support, rapid 20
advances in technology, faster pace of growth in business and profitability , increase in efficiency, robust capitalization, higher returns to investors and above all generating rapid pace of growth with lesser levels of non performing assets. RETAIL BANKING :Retail banking in India has fast emerged as one of the major drivers of the overall banking industry and has witnessed enormous growth in the recent past. The Retail Banking Report encompasses extensive study & analysis of this rapidly growing sector. It primarily covers analysis of the present status, current trends, major issues & challenges in the growth of the retail banking sector. This report helps in Banks , financial institutions , MNC Banks, academicians, consultants and researchers to have a better understanding of the booming opportunities in retail banking in India.
Major Findings Retail lending across the globe has been a showcase of innovation in the commercial banking sector. The higher growth of retail lending in emerging economies is attributable to fast growth of personal wealth, favorable demographic profile, rapid development in information technology, the conducive macroeconomic environment, f financial market reforms, and several micro-level supply side factors. The retail banking strategies of banks are undergoing major transformation, as banks adopt a mix of strategies like organic growth, acquisitions and alliances. This has resulted in a paradigm shift in the marketing strategies of the banks.
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Technology Driven Indian Banking:The two letters which have changed the way businesses operate has been IT as an acronym for Information Technology. No other facilitating service has resulted in such large scale benefits as Information Technology. IT has become such an essential ingredient of ones way of life in todays world that it is difficult to imagine a world without IT and no other sector has benefited to such a large extent as the financial sector, with the Banking sector in particular, from the inroads made by IT . Traditionally, business strategies have all focused on meeting the objectives of the business with greater impetus being laid on the channels involved to achieve the broad goals. Today, however, the winds of change brought by IT have necessitated a paradigm shift where IT does not merely provide value added support services. IT, however, has re-positioned itself as the basic backbone for most businesses. In fact, we have now reached a stage where it may be difficult to even imagine how a business or an industry would even survive without IT. The Banking sector is no exception to this changing scenario which is sweeping across the world. Most of the banks have already started to feel the impact of the operations of the new banks in the country. The changes staring at the face of bankers all relate to the fundamental way of banking which is undergoing a rapid transformation in the world of today. It is widely recognized that the core banking functions alone do not add to the bottom line of banks-value added services are slowly but steadily emerging as a substantial opportunity for banks to exploit and customers would not hesitate to use such services in view of the convenience they offer. It is well recognized that technology holds the key to the future success of Indian Banks since it is Information technology which has brought in a sea change in the way banking is being conducted today which is but an indication of the
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tomorrow. It would be beyond anybodys imagination to even think about conducting banking business anywhere in the country or using a powerful yet simple medium such as the Internet even from roadside kiosks. And concepts such as Anywhere Banking or Automated Teller Machines are but offshoots of technology implementation by banks, as also Internet Banking and Mobile Banking. With the advent of electronic banking , electronic funds transfer and other similar products, funds transfers across different constituents is now easily possible within time frames which would have appeared impossible a few years ago. A Regulatory Point Of View:The decade gone by witnessed a wide range of financial sector reforms, with many of them still in the process of implementation. Some of the recently initiated measures by the RBI for risk management systems, anti money laundering safeguards and corporate governance in banks, and regulatory framework for non bank financial companies, urban cooperative banks, government debt market and forex clearing and payment systems are aimed at streamlining the functioning of these areas. Further, one or two all India development financial institutions have already commenced the process of migration towards universal banking set up. The banking sector has to respond to these changes, consolidate and realign their business strategies and reach out for technology support to survive emerging competition. Regulatory framework for banks was one area which has seen a seachange after the financial sector reforms and economic liberalization and globalization measures were introduced. These reforms followed broadly the approaches suggested by the two Expert Committees both set up under the chairmanship of Shri M.Narasimhan in 1991 and 1998,the recommendation of
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which are by now well known. The underlying theme of both the Committees was to enhance the competitive efficiency and operational flexibility of our banks which would enable them to meet the global competition as well as respond in a better way to the regulatory and supervisory demand arising out of such liberalization of the financial sector. Government of India and RBI have taken several steps to
(a) strengthen the banking sector, (b) provide more operational flexibility to banks, (c) enhance the competitive efficiency of banks, and (d) strengthen the legal framework governing operations of banks. (a) The important measures taken to strengthen the banking sector are briefly the following : Introduction of capital adequacy standards on the lines of the Basel norms. Prudential norms on asset classification, income recognition and provisioning.
Introduction of valuation norms and capital for market risk for investments. Enhancing transparency and disclosure requirements for published accounts . Introduction of off-site monitoring system and strengthening of the supervisor framework for banks. (b) Some of the important measures introduced to provide more flexibility to banks are :operational
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Statutory reserve requirements have significantly been brought down. The banks were given the freedom to recruit specialist staff as per their requirements. The degree of autonomy to the Board of Directors of banks was substantially enhanced. Banks were given autonomy in the areas of business strategy such as, opening of branches / administrative offices, introduction of new products and certain other operational areas. (c) Some of the important measures taken to increase the competition efficiency of banks are as follows: Opening up the banking sector for the private sector participation. Scaling down the shareholding of the Government of India in nationalized bank and of the Reserve Bank of India in State Bank of India.
(d) Measures taken by the Government of India to provide a more conducive legal environment for recovery of dues of banks and financial institutions are: Setting up of Debt Recovery Tribunals providing a mechanism for expeditious loan recoveries. An appropriate legal framework for securitization of assets is engaging the attention of the Government.
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PRUDENTIAL NORMS ON CAPITAL ADEQUACY CAPITAL FUNDS AND CAPITAL REQUIREMENTS. GENERAL GUIDELINES: 1.1 Capital adequacy standards for primary dealers in government securities
market have been in vogue since December 2000. The guidelines were revised keeping in view the development in the market experience gained over time and introduction of new products like exchange traded derivates.
1.2 Capital funds Capital funds would include the following elements:
2.1TIER I CAPITAL : Tier-I capital would mean paid- up capital, statutory reserves and other disclosed free reserves. Investment in subsidiaries where applicable, intangible assets, losses in current accounting period, deferred tax assets (DTA) and losses brought forward from previous accounting periods will be deducted from Tier I capital. In case any PD is having substantial interest/ (as defined for NBFCs) exposure by way of loans and advances not related to business relationship in other group companies, such amounts will be deducted from its Tier I capital. 2.2 Tier II CAPITAL : Tier II capital includes the following:
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1. Undisclosed reserves and cumulative preference shares other than those which are compulsorily convertible into equity. Cumulative preference shares should be fully paid up and should not contain clauses which permit redemption by the holder. 2. Revaluation reserves discounted at a rate of fifty five percent. 3. General provisions and loss reserves to the extent these are not attributable to actual diminution in value or identifiable potential loss in any specific asset and are available to meet unexpected losses, up to the maximum of 1.25 percent of total risk weighted assets. 4. Hybrid debt capital instruments, which combine certain characteristics of equity and certain characteristics of debt. 5. Subordinated debt. a) To be eligible for inclusion in Tier II capital, the instrument should be fully paid-up , unsecured , subordinated to the claims of other creditors, free of restrictive clauses , and should not be redeemable at the initiative of the holder or without the consent of the Reserve Bank of India. It often carries a fixed
maturity, and as it approaches maturity, it should be subjected to progressive discount, for inclusion in Tier II capital. Instruments with and initial maturity of less than 5 years or with a remaining maturity of one year should not be included as part of Tier II capital. Subordinated debt instruments eligible to be reckoned as Tier II capital will be limited to 50 percent of Tier I capital. b) The subordinated debt instruments included in Tier II capital may be subjected to discount at rates shown below.
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Remaining Maturity of Instruments Less than one year One year and more but less than two Years Two years and more but less than three years Three years and more but less than four years Four years and more but less than five years.
Rate of Discount (%) 100 80
60
40
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2.1 TIER III CAPITAL: TIER III capital issued to meet solely the market risk capital charge in accordance with the criteria as lay down. The principal forms of eligible capital to cover market risk consist of shareholders and retained earnings (Tier I capital) and supplementary capital (Tier II Capital). But PDs may also employ a third tier of capital (Tier III) consisting of short term subordinated debt, as defined below, for the sole purpose of meeting a portion of the capital requirements for market risks. For short- term subordinated debt to be eligible as Tier III capital, it needs, if circumstances demand, to be capable of becoming part of PDs permanent capital and available to absorb losses in the event of insolvency. It must, therefore at a minimum;
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Be unsecured , subordinated and fully paid up; Have an original maturity of at least two years; Not be repayable before the agreed repayment date unless the RBI aggress; Be subject to a lock in clause that neither interest nor principal may be paid (even at maturity) if such payment means that the PD falls below or remains below its minimum capital requirement.
INVESTMENT OF BANKS IN STOCK AND COMMODITY MARKET

Banking supervisors must have the authority to establish criteria for reviewing major acquisitions or investments by a bank and ensuring that corporate affiliations or structures do not expose the bank to undue risks or hinder effective supervision. Banks are allowed to set up subsidiaries and make significant investment only in companies that are undertaking business authorized under section 19(1) of the banking regulation act. This ensures that banks form subsidiaries only in financial services sector, and this requires prior approval of RBI. The RBI applies fit and proper test and examines viability report of the proposed subsidiary before granting permission. Under section 19(2) of the Banking Regulation Act, other investments by banks whether as pledge, mortgage or absolute owner in other companies cannot exceed 30% of the paid-up share capital or 30% of its own paid up capital, whichever is less. Investment by banks in a financial services company requires prior approval of RBI and is subject to a ceiling of 10% of the banks paidup capital and reserves. Aggregate investment in all the subsidiaries shall not exceed20% of the banks paid up capital. In the case of investments in equity shares of companies not engaged in financial services investment in a year should not exceed 5% of incremental deposits of the previous year. 29
The RBI insists on arms length relationship between the bank and its subsidiary. As regards supervision, RBI has the authority to supervise companies undertaking non-banking financial services. The capital market related activities of such companies are also under the functional regulation of SEBI.
Report Of the Standing Technical Committee of RBI An SEBI On Review Of The RBI Guidelines On Bank Financing Of Equities
EXECUTIVE SUMMARY: 1. As announced in October 2000 in the mid term review of the Monetary and Credit Policy for the year 2000-2001, the RBI and SEBI Technical Committee has reviewed the RBI guidelines on banks investments in shares. The report of the committee was submitted to the RBI on April 12, 2001.
2. The total investment in shares of the 101 scheduled commercial banks aggregated rs 8,7771.60 crore as on January 31,2001 and constituted 1.97% of outstanding domestic advances as on march31,2000 and was well within the norm of 5% of the domestic credit stipulated in the RBI Circular of November 10,2000. The total investment in shares of all the banks aggregated rs 6,324.11 crore as on march 31, 2000 and constituted 1.42% of the domestic credit.
3. The Banks Exposure To Capital Market Takes The Following Three Forms: Direct investment in shares etc where the banks take the price fluctuation upon themselves.
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Advances against shares, which are subject to market risk but covered by stipulating margin requirements. Non- fund based facilities like guarantees where credit risk arises on account on non performance of the obligation.
4. Considering the exposure to capital market built up by a few banks as also the slackness in the following up adequate prudential limits, the committee is of the view that the aberrations in compliance of the guidelines, though by only a few banks, should be addressed. The committee is of the view that there is no need to change the basic framework of the guidelines and a few parameters could be further strengthened to address the above situation. The committee reiterates that the extent of exposure of banks to capital market should be in consonance with the expertise available in house and risk management and internal control systems put in place by them.
5. Ceiling Overall Exposure To Capital Market: In terms of the extant RBI guidelines, within the overall exposure to sensitive sectors, a banks exposure to capital market by way of investments in shares, convertible debentures and units of equity oriented mutual funds should not exceed 5% of its outstanding domestic credit as on March 31, of the previous year. Without changing the base for reckoning the banks exposure to capital market, the committee recommends that as a prudential measure, a banks total exposure to capital market by way of investments in equity shares, convertible debentures, units of equity oriented mutual funds as also by way of advances against shares and debentures including issue of bank guarantees on behalf of stock brokers, should not exceed 5% of the b banks total advances as on march 31, of the 31
previous year. The advances granted by a bank against the collateral security of shares, advances to individuals for personal purposes like education, housing, consumption etc. against the security of shares should also be reckoned for the purpose of arriving at the above ceilings of 5%. 6. Ceiling on investments in shares Within the above overall ceiling of 5% for the total exposure to capital market, the total direct investments in shares, convertible debentures and units of equity oriented mutual funds by a bank should not exceed 20% of its net worth, as hitherto 7. Reporting to RBI The RBI- SEBI Committee will review the guidelines after six months. Banks should submit to RBI the returns on investments in shares, debentures and units of equity oriented mutual funds as also advances against shares including guarantees, as at the end of each month so as to reach RBI by the 10TH of the following month, as part of their OSMOS returns. Banks should also bring to the notice of the RBI operational problems faced by them so that the Technical Committee could consider these at the time of the next half yearly review.
Conclusion Much more has to be done in this area and the banks should view these measures for strengthening their fundamentals as a seamless exercise.
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Chapter 4
NEW AGE BANKING - ITS DIFFERENT !

Banking Scenario In last one decade the Indian Banking sector has witnessed a very high level of conceptual revolution in terms of organization structure, business model, accounting, operations, control environment, customer interface, customer service, regulatory compliance, information dissemination and a whole lot. It has been significantly seen that from past few years there has been drastic change in the functioning of banks all over the country. The major changes were brought about in the various modernized services offered by banks to the customers. Thus, it has been seen that the modern banking is turning out to be customer-oriented .
The banking sector has moved from: Traditional banking to high level financial advisory. Traditional products of deposits and lending to boutique of financial services activities. Branches to Service outlets. Customer of branches to customer of bank. Multi-level organization to centralized organization. Decentralized data processing to centralized-data processing. Manual accounting to complex computerized-data processing and accounting.
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MODERN SERVICES PROVIDED BY ONLINE BANKING Banks Internet banking base has been growing at an exponential pace over the last few years. Currently around 78 per cent of majority of the bank's customer base is registered for Internet banking. To get started, all we need is a computer with a modem or other dial-up device, a checking account with a bank that offers online service and the patience to complete about a one-page application--which can usually be done online.
The following services can be availed by customers :-
Bill payment service :- Each bank has tie-ups with various utility companies, service providers and insurance companies, across the country. customers can facilitate payment of electricity and telephone bills, mobile phone, credit card and insurance premium bills. To pay bills, all that is needed is complete a simple one-time registration for each biller. One can also set up standing instructions online to pay recurring bills, automatically. One-time standing instruction will ensure that you don't miss out on your bill payments due to lack of time. Most interestingly, the bank does not charge customers for online bill payment. Fund transfer :- Customers can transfer any amount from one account to another of the same or any another bank. Customers can send money anywhere in India. Once an individual login to his account, he needs to mention the payees account number, his bank and the branch. The transfer will take place in a day or so, whereas in a traditional method, it takes about three working days. Most of the
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banks says that online bill payment service and fund transfer facility have been their most popular online services. Credit card customers :- Credit card users have a lot in store. With Internet banking , customers can not only pay their credit card bills online but also get a loan on their cards. Not just this, they can also apply for an additional card, request a credit line increase and if user loses the credit card, the report can be done of lost card online. Railway pass:- This is something that would interest all the common people. Indian Railways has tied up with ICICI bank and people can now make their railway pass for local trains online. The pass will be delivered at the individuals doorstep. But the facility is limited to Mumbai, Thane, Nashik, Surat and Pune. The bank would just charge Rs .10 + 12.24 % of service tax. Such services provided by banks have made life easier for a common man. Investing through Internet banking :- Opening a fixed deposit account cannot get easier than this. Customers can now open an FD online through funds transfer. Online banking can also be a great friend for lazy investors. Now investors with interlinked demat account and bank account can easily trade in the stock market and the amount will be automatically debited from their respective bank accounts and the shares will be credited in their demat account. Moreover, some banks even give the facility to purchase mutual funds directly from the online banking system. So, customers need not worry about filling those big forms for mutual funds, they will now be just a few clicks away. Nowadays, most leading banks offer both online banking and demat account. If one have demat account with independent
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share brokers, then all that is needed is to sign a special form, which will link your two accounts. Recharging your prepaid phone :- It is now no longer needed to rush to the vendor to recharge the prepaid phone, every time the talk time runs out ; all we need to do is Just top-up the prepaid mobile cards by logging in to Internet banking. By just selecting the local operator's name, entering the mobile number and the amount for recharge, phone will be again back in action within few minutes. Shopping at your fingertips :- Leading banks have tie ups with various shopping websites. With a range of all kind of products, customers can shop online and the payment is also made conveniently through your account. They can also buy railway and air tickets through Internet banking . Internet banking v/s traditional method:- Inspite of so many facilities that Internet banking offers us, we still seem to trust our traditional method of banking and is reluctant to use online banking. But here are few cases where Internet banking will turn out to be a better option in terms of saving your money. Stop payment' done through Internet banking will not cost any extra fees but when done through the branch, the bank may charge you Rs.50 per cheque plus the service tax. Through Internet banking, customers can check your transactions at any time of the day, and as many times as one wants to. On the other hand, in a traditional method, customers get quarterly statements from the bank and if one request for a statement at the required time, it may turn out to be an expensive affair. The branch may charge you Rs 25 per page, which includes only 30 transactions. Moreover,
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the bank branch would take eight days to deliver it at doorstep. If the fund transfer has to be made outstation, where the bank does not have a branch, the bank would demand outstation charges. Whereas with the help of online banking, it will be absolutely free for you. There are many advantages of online banking. It is convenient, it isn't bound by operational timings, there are no geographical barriers and the services can be offered at a minimum cost. Security Precautions:- Customers should never share personal information like PIN numbers, passwords etc with anyone, including employees of the bank. It is important that documents that contain confidential information are safeguarded. PIN or password mailers should not be stored, the PIN and/or passwords should be changed immediately and memorized before destroying the mailers. Customers are advised not to provide sensitive account-related information over unsecured emails or over the phone. simple precautions like changing the ATM, PIN and online login and transaction passwords on a regular basis should be taken care . Also ensure that the logged in session is properly signed out. Core banking solutions:- Banks have attained more leeway on the technology front than ever before. From just being a business enabler, IT is now a business driver for the banking sector. CBS is nothing but automation of banks across multiple delivery channels. In other words, CBS helps banks achieve a centralized processing mechanism and in turn provide an anytime anywhere service to their customers. However, core banking applications come with their set of challenges as well. The concept of being a customer of a single branch was expanded to becoming a customer of the entire bank by interconnecting the network of
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branches online under core banking solution. These solutions are enabling the ideology of anywhere banking. Core banking roadblocks :- With intense competition and changing market dynamics, banks have to brace themselves for newer obstacles every now and then. Moreover, fresh regulations and compliance requirements, industry consolidation, delivering cost effective products and services, maintaining secure data platforms, meeting ever increasing customer demands and other strategic issues have all made banking far more complex than it used to be in the past. In order to handle increasing transaction volumes and do away with issues hovering around the current systems, banks need the right CBS in place. Solutions :- What banks need is a flexible, customer centric core banking environment that is also equipped with multi-currency and multi-lingual features since the industry is getting increasingly globalised. For instance, Canara Bank recently enabled CBS at as many as 1000 branches, which is one of the largest implementations in the banking industry and includes agricultural loans, loan processing, foreign exchange and service branch functionality. This has helped the bank move in line with the changing market scenario. The road ahead :- At present, out of the total IT spending undertaken by banks, around 75 per cent goes toward maintenance of existing systems and ensuring that the business of the bank goes through smoothly. Hence, a major exercise in upgrading core banking architecture is something many banks may not be able to afford at present. To gain an edge over their competitors and address customer demands effectively, banks need to do a balancing act by replacing old systems with new platforms, without giving up on existing core banking modules which might still cater to changing needs. There has been considerable progress in CBS implementation by banks; however, there is much more ground left to cover.
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Exploring new sources of income :- As their spreads from traditional areas are shrinking banks & are continuously trying to explore new sources for generating revenues. Banc assurance:-Banc assurance, a concept with roots in France, which implies distribution of insurance products through the bank branches, is emerging as a new source of revenue for banks. In India it has assumed primarily three forms namely.1) corporate agency-distribution of the insurers products on a as is where-is basis.2) wrapper products- developing insurance products wrapped around the banks saving and loan products and 3) referral basis- providing customer leads from the banks database to the insurance companys representatives. The first and the second models are proving to be increasingly popular. There have been many tie ups between banks and insurance companies. Wealth management :- The boom is economy has heralded the growth in the number individuals who are of high net worth. These HNIs with limited time expertise at their disposal are increasingly looking out to banks as their trusty why partner for their investments. Thus, many banks have been quick to capitalize on this need and offer exclusive investment management services that are commonly referred to as Private Banking. Cash management services:- Cash management services were very useful for large corporate who needed to realize their funds quickly from across the country. However, with core banking a solution offering instant realization across the entire bank branch network, this function is fast losing its importance.
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New Business Opportunities tapped Derivatives by banks Trading

36.8% Wealth Management 21.05% Selling of Mutual Funds 73.6%
Forex Management 68.4%
Bancassuran c e 73.6%
Outsourcing activities:-Outsourcing has emerged as a new paradigm in the banking in the banking sector. Technology based solutions are offering cheaper and more efficient alternatives as compared to humanized operations. Hence banks may be compelled to go for outsourcing of many non-core functions to reduce their costs. Fully Electronic Transaction system:- These systems allow bi-direct local transactional capabilities. Transactions can be submitted by the customers for online update. These systems require high degree of security & control, in such an environment web server & application systems are linked over secure infrastructure which comprise the basic requirements in terms of technology covering computerization, networking & security, inter-bank payment gateway & legal infrastructure for introduction of internet banking involving a fully electronic transactional system. Mobile Banking Significance :- Mobile banking has a growing significance in the Indian scenario. There are 260 million mobile users and most of the banks in 41
India are already in this space or in the process of
providing mobile banking
facility to their customers. However it is being considered that mobile banking will proof to be of great help for a huge un-banked population. There is also a
difference in mobile banking services. Some banks are just offering SMS alerts to their customers, while some of the banks are offering services like payment of utility bills, viewing balance information and requesting mini statements, among others. Similarly, some charge their customers for their mobile banking services, while some others offer them as a free add-on service. Furthermore, different banks have different modes for customers to avail of their mobile banking services. ICICI Bank introduced mobile banking four months back and the customers are required to download an application called iMobile from its website. It offers services similar to the ones provided by Barclays. It is not just private sector banks like Standard Chartered and ICICI that are providing mobile banking services to its customers, even public sector banks like Corporation Bank is also offering their customers a choice to pay their bills and shop using their mobile phones. Banks that are not already in the mobile banking told that they have plans to begin operations soon, Bank of Baroda being one of them. Although ICICI Bank is offering mobile banking service free of cost, its head of retail liabilities, Maninder Singh Juneja feels it is an extremely important focus area for us to make banking convenient for customers.
Conclusion Banking business thus is witness to continuously new emerging paradigms and technologically superior alternatives which rendered existing processes obsolete.
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CASE STUDY
ICICI BANK UNDERTOOK A SURVEY IN ORDER TO FIND OUT THE CUSTOMERS SATISFACTION FROM ONLINE FACILITIES PROVIDED BY BANK & THE RESULTS WERE FOUND AS UNDER:
Thus, it was found that the customers were extremely satisfied by the services offered by ICICI bank. The highest level of satisfaction was found in the areas of customer relationship management & secondly , in the area of the online services offered by the bank. Hence, it is observed that the ICICI bank is emerging as one of the leading banks in terms of providing services to customers & ensuring the trust of their customers in their bank leading to customers satisfaction.
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Chapter 5
ECONOMIC CHANGES IN INDIAN BANKING

Interest rate risk :Interest rate risk can be defined as exposure of bank's net interest income to adverse movements in interest rates. A bank's balance sheet consists mainly of rupee assets and liabilities. Any movement in domestic interest rate is the main source of interest rate risk. Over the last few years the treasury departments of banks have been responsible for a substantial part of profits made by banks. With the rise in inflation, bond rates go up and bond prices fall as the debt market starts factoring a possible interest rate hike, the banks will have to set aside funds to market their investment. This will make it difficult to show huge profits from treasury operations. Banking in the recent years had been reduced to a trading operation in government securities. Recent months have shown a rise in the bond rates has led to the profit from treasury operations falling. The If the rise in rates continues the banks might end up posting huge losses on their trading books. Given these facts, banks will have to look at alternative sources of investment. Interest rates and non-performing assets :The best indicator of the health of the banking industry in a country is its level of NPAs. Indian banks seem to be better placed than they were in the past. A few banks have even managed to reduce their net NPAs to less than 1%. But as the bond rates start to rise, the chances are the net NPAs will also start to go up. This will happen because the banks have been making huge provisions against the money they made on their bond portfolios in scenario where bond rates were falling. Reduced NPAs generally gives the impression that banks have strengthened their credit appraisal processes over the years. With increasing bond 45
rates, treasury income will come down and if the banks wish to make large provisions, the money will have to come from their interest income, and this in turn, shall bring down the profitability of banks. Competition in retail banking:The entry of new generation private sector banks has changed the entire scenario. Earlier the household savings went into banks and the banks then lent out money to corporate. Now they need to sell banking. The retail segment, which was earlier ignored, is now the most important of the lot, with the banks jumping over one another to give out loans. The consumer has never been so lucky with so many banks offering so many products to choose from. With supply far exceeding demand it has been a race to the bottom, with the banks undercutting one another. The new generation private sector banks have taken a lead on this front and the public sector banks are trying to play catch up. The PSBs have been losing business to the private sector banks in this segment. The urge to merge:In the recent past there has been a lot of talk about Indian Banks lacking in scale and size. The State Bank of India is the only bank from India to make it to the list of Top 100 banks, globally. Most of the PSBs are either looking to pick up a smaller bank or waiting to be picked up by a larger bank. The central government also seems to be encouraging PSBs to merge or acquire other banks. Global evidence seems to suggest that even though there is great enthusiasm when companies merge or get acquired, majority of the mergers/acquisitions do not really work. So in the zeal to merge with or acquire another bank the PSBs should not let their common sense take a back seat. Before a merger is carried out cultural issues should be looked into. A bank based primarily out of North India might want to acquire a bank based primarily out of South India to increase its
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geographical presence but their cultures might be very different. So the integration process might become very difficult.
Impact of BASEL-II norms :Banking is a commodity business. The margins on the products that banks offer to its customers are extremely thin vis a vis other businesses. As a result, for banks to earn an adequate return of equity and compete for capital along with other industries, they need to be highly leveraged. The primary function of the bank's capital is to absorb any losses a bank suffers . Credit risk is not the only type of risk that banks face. These days the operational risks that banks face are huge. The various risks that come under operational risk are competition risk, technology risk, casualty risk, crime risk etc. The original BASEL rules did not take into account the operational risks. As per the BASEL-II norms, banks will have to set aside 15 per cent of net income to protect themselves against operational risks. A few banks are planning initial public offerings to have enough capital on their books to meet these new norms.
CONCLUSION:The falling interest rates gave banks very little incentive to lend to projects, as the return did not compensate them for the risk involved. This led to the banks getting into the retail segment big time. It also led to a lot of banks playing it safe and putting in most of the deposits they collected into government bonds. Now with the bond party over and the bond yields starting to go up, the banks will have to concentrate on their core function of lending. The banking sector in India needs to tackle these challenges successfully to keep growing and strengthen the Indian financial system.
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Chapter6
MANAGERIAL FLEXIBILITY IN BANKS
I.
Human Relationship Management (HRM) in Banks:New Trends in HRM :- Human resource management is a process of bringing people and organizations together so that the goals of each other are met. The role of HR manager is shifting from that of a protector and screener to the role of a planner and change agent. The banking has become a complex activity within the financial market linked directly and indirectly with an over-all national growth and its impact as an integral part of regional segment of a global banking environment. Almost every bank and financial institution is involved in various functions in a day's job and thus requires a highly effective team and appropriate manpower to run the show. The range may require reasonably educated security guards on the one end and a highly educated and trained professional as head of corporate finance at the other. HRM in Banks :- HRM banks like other institutions have been handling this sensitive activity through respective personnel departments from past many years. This means human resources were managed like other physical assets e.g. pieces of furniture, calculators, equipment and appliances. Personnel departments were primarily engaged in approval of leaves, handling of staff loans, issuance of show cause, conducting disciplinary enquiries and termination from service. Recruitment was a routine function and was done in a mechanical way to hire people with specific educational background irrespective of their real value to the institution. Success stories of large banking companies have been evident of the fact that HRM is quite different from management of physical assets. Human brain has its own 49
peculiar chemistry. Its strong sensory and decision-making capacity has to be greatly emphasized by the employers. The work force constituting all levels of employees are constantly thinking in many dimensions. CHALLENGES FACED :- Managing educated, skillful and trustworthy work force is not an easy job. A few of the current challenges faced by the banking industry in terms of human resource management may be the following : Effective work force: A time-consuming and hectic job is to hunt the right talent. Higher the professional value of the vacancy, tougher is the search. Banks are keenly interested tofill up two types of professionals. Ones who are outstanding professionals with high job hopping attitude - these are those who come in - work for some time and then leave for better prospects. Others are those who are keenly picked-up, trained and are some how retained to be developed as future management within the bank. Right people: The most difficult agenda of HRM across the banking sector is to retain the right people. Sudden growth of retail banking and other services has put pressure on HR mangers in banks to engage more professionals within shorter span of time thereby attracting manpower in other banks on attractive packages has made the job market very competing. A bank in a normal course invests time and money to hire and train the appropriate work force for its own operations. This ready-made force is often identified and subsequently picked-up on better terms by others. Compensation: Banks have traditionally followed pay scales with predetermined increments, salary slabs, bonuses and time-based fringe benefits like car and house advance, gratuity, pension, etc. Job satisfaction: Everybody in the bank wants to work in the preferential department, preferential location, city of his own choice and boss of his liking. An
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administrative deviation from any of these results in lowered job satisfaction. Although hiring is normally based on regional requirement matching the area of activity with that of employee's nativity yet other elements like appointment in the department of choice and preference makes the job of HR manager quite challenging. Morale boosting: Morale boosting has been overlooked of the employees by the organizations. Smart banks have realized this need and have taken steps to keep their work force motivated through proper encouragement like man of the month awards, repeat get-togethers, conferences, sports events, dinners, company sponsored travel, reunions, etc.
II.
NRI Banking :-
What is NRI banking ? :- Banks holding authorized dealers' licenses (i.e. Banks authorized to deal in foreign exchange or banks specifically authorized in this behalf by Reserve Bank can only maintain accounts in the names of NRIs. Certain Co- operative/commercial banks (referred to as authorized banks) have been specifically permitted to maintain accounts of NRIs expressed in rupees even though they are not authorized dealers. Accounts can be maintained by NRIs in rupees as well as in foreign currency. Accounts in foreign currencies can, however, are maintained with authorized dealers only.
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Rupee Accounts :- NRO and NRE accounts can be maintained in current/savings/ fixed deposit form while NRI accounts can be only in fixed term deposits. Three types of rupee accounts Viz. Non-resident (External) Rupee Accounts (NRE account), Ordinary Non- resident Rupee Account (NRO accounts ) and Nonresident (Non-repatriable) Rupee Deposit accounts (NRNR) are permitted to be maintained. Balances held in NRE accounts can be repatriated abroad freely, whereas funds in NRO account cannot be remitted abroad but used only for local payments in rupees. Consequently, funds remitted from abroad or local funds which can otherwise be remitted abroad to the account holder can only be credited to NRE accounts. Funds which do not qualify, under the Exchange Control regulations, for remittance outside India are required to be credited to NRO accounts. Foreign Currency Accounts :- Accounts in foreign currencies (FCNR accounts) can also be maintained by NRIs with authorized dealers in India. FCNR Accounts permitted to be maintained in Pound Sterling, U.S. Dollar, Deutsche Mark and Japanese Yen. Authorized dealers maintaining these accounts would allow repatriation abroad of these funds. NRI Banking Services :- The Bank of India NRI system is quite vast. The various NRI Services provided by the Bank of India are: Housing Loans to NRIs / PIOs :- In addition to providing Housing Loan To NonResident Indians (NRIs) and Persons of Indian Origin (PIOs) for acquisition of accommodation in India subject to certain conditions, BOI also grants loans to NRIs / PIOs for the purpose of repairs/ renovations/ improvements of residential accommodation owned by them in India. Documents required to open an NRI account :- The easiest way of Opening An Account For an NRI would be to contact the nearest branch of Bank of India
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who would gladly assist in fulfilling the required formalities and opening an account. If Bank of India branch is away, then following documents may be sent to the branch where account is desired to be opened : Account may be introduced by an existing customer of the branch or may be verified by present banker or by Embassy Officials abroad. Copies of important pages of passport (containing name, signature, birth-date, place/ date of issue, expiry date etc) duly authenticated by Notary Public/ Officials of Indian Embassy. Two passport size photographs with signatures on reverse . Remittance for opening an account.
III.
CRM ( Customer Relationship Management ) in Banks :CRM In Banks :- The concept of CRM is now gaining wide acceptance & is recognized as a powerful tool for business development & to have an edge over the competitors on account of the universal traits of human behavior . People need to have social & interactive relationships. So, fast moving banks believe in their customers, understand their needs in advance before customers give the feedback their particular requirements & accordingly banks have to match their needs. CRM An Emerging Challenge :- CRM, despite all the talk about it being one of the most 'profitable' customer strategies of the decade, still allows room for failure. The most important aspect of CRM problems is its excellent ability to achieve customer retention but its failure to do so. This is indirectly responsible for CRM collapse. Generally one of the reasons this happens is because most organizations that actually employ CRM, experience a lot of confusion about its attributes and what it really is. Some would define it as a business strategy while others view it as something to do with technology. 53
Factors converting satisfied customer to loyal customer :
Key Factors that convert a satisfied customer into a loyal customer

Ensuring Customer Security 37.5% Personal Touch 75% Offering Customized Products 37.5%
Better service pre and post banking 93.75%
Be ing a leader in off ering innovative pr oducts from tim e from time 37 .5%
Insufficient Resources:- When funds are less, budgets strained, the necessary costs required for CRM success are not employed. As a result CRM starts failing midway. The most important aspect- that of maintaining consistency is lost. Organizations fail to utilize the necessary resources for success and thus result in failure. Complex Systems :- It is said that CRM is simple by the experts but its not practically agreed upon. Their are witness to the fact that CRM packages can be highly complex, with vast amounts of intricacies. If this is the case then the simple employees have to cope with it by sufficient training being given in order that they are able to comprehend and deal with the difficulties easily. Thus, CRM has been growing enduring relationships with the profitable customers. Most CRM problems can be mitigated, resolved and ultimately obliterated.
IV.
KYC NORMS IN BANKS:What is KYC norms? :- In order to prevent identity theft, identity fraud, money laundering, terrorist financing, etc, the RBI had directed all banks and financial institutions to put in place a policy framework to know their customers before opening any account. This involves verifying customers' identity and address by asking them to submit documents that are accepted as relevant proof. Mandatory details required under KYC norms are proof of identity and proof of address. Passport, voter's ID card, PAN card or driving license are accepted as proof of identity, and proof of residence can be a ration card, an electricity or telephone bill or a letter from the employer or any recognized public authority certifying the address. Some banks may even ask for verification by an existing account holder.
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Though the standard documents which are accepted as proof of identity and residence remain the same across various banks, some deviations are permitted, which differ from bank to bank. So, all documents shall be checked against banks requirements to ascertain if those match or not before initiating an account opening process with any bank. Those are the basic requirements of KYC to identify a customer at the account opening stage. These are some of the basic norms of KYC. Other aspects of KYC norms :- To prevent the possible misuse of banking activities for anti-national or illegal activities, the RBI has given various directives to banks:Strengthening the banks' 'Internal Control System' by allocating duties and responsibilities clearly, and periodically monitoring them. Before giving any finance at branch level, making sure that the person has no links with notified terrorist entities and reporting any such 'suspect;' accounts to the government. Regular 'Internal Audit' by internal and concurrent auditors to check if the KYC guidelines are being properly adhered to or not by banks. Most important, banks must keep an eye out for all banking transactions and identify suspicious ones. Such transactions will be immediately reported to the bank's head office and authorities and norms shall also be laid down for cancellation of such accounts. RBI Guidelines to meet KYC norms:- In 2004, the RBI had come up with more specific guidelines regarding KYC. These were divided into four parts: Customer Acceptance Policy: All banks shall develop criteria for accepting any person as their customer to restrict any anonymous accounts and ensure documentation mentioned in KYC.
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Customer Identification Procedures: Customer to be identified not only while opening the account, but also at the time when the bank has a doubt about his transactions. Monitoring of Transactions: KYC can be effective by regular monitoring of transactions. Identifying an abnormal or unusual transaction and keeping a watch on higher risk group of the account is essential in monitoring transactions. Risk management: This is about managing internal work to reduce the risk of any unwanted activity. Managing responsibilities, duties and various audits plus regular employee training for KYC procedures. These guidelines also specify that KYC should be implemented for existing account holders on the basis of materiality and risk segments. The RBI had also directed all banks to make a policy for implementing 'Know Your Customer' and anti-money laundering measures and remain fully compliant with given guidelines.
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Chapter 7
58
CHANGING TRENDS IN INDIAN BANKING

Faced with mutually interdependent forces of competition, regulation, technology, and expectations of the customers, banks are set for a range of roles. Adjust, adapt, and change. That's the message that technology has sent across to modern day banking. As technology ingrains itself in all aspects of a bank's functioning, the challenge lies in exploiting the potential for profiting from investments made in technology. The transition of technology from a historical operational and backoffice role to a strategic role complementing the business direction is more evident abroad-a fact exemplified by the top slots notched by foreign banks in the Best Banks Survey. The new mindset is illustrated by innovations and speculative bets taken by banks, where investments in technology have focused on benefitrealization. Banks that have adapted this mindset have realized benefits from: Customer management-focused investments where integrated informational views and transactional capabilities across products, services, and channels have enabled the banks to obtain a better picture of customer preferences, risk, and profitability. Investments aimed at managing risk and regulation issues with banks gaining the ability to identify, manage, and allocate risk exposures on across the enterprise to prioritize business decisions. Developing a portfolio of shared service alliances focused on providing integrated cross-channel access and new range of services. Implementing best-of-breed workflow around the core e-Enabled business systems to provide the right linkages to yield business benefits. In India, investments in technologies by financial services organizations are increasing, and new initiatives emerging. However, in the long run, it is evident
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that technology investments in transaction and process automation will cease to be a differentiator. 1. Tuning Technology:- Banks have traditionally performed the role of financial intermediaries. The current trend is to try and be a part of all financial transactions in the market space, and increase the share from customer. As banks face the mutually interdependent forces of competition, regulation, technology, and customer expectations, tremendous upheaval and opportunity emerges. This interdependency, in turn, is built upon mutually dependent technological trends. Increase processing power:- With increasing power of processing, the cost of processing transactions has come down significantly. Radical advances that came about in computing power has led banks to centralize their processing operations, thus enabling multiple points of interaction with customers, paving way to advancements like any-branch banking. Increase in networking:- Connectivity, and not processing power is the current mantra. Increase in flexibility in defining business standards:- Business standards are getting redefined in tune with the changing technology standards. While a number of such standards are in the process of being developed for the banking and financial services industry, an industry wide consensus is yet to emerge. Increase in modularity of software:-Software is increasingly being built like 'Lego' blocks structure i.e., applications created by constructing and combining well-defined modules. The gluing together of various specialized applications is now easier because of this approach in design. These four trends are impacting irreversibly the business of banking, mainly in product management, outsourcing, insourcing, analytics, and payment systems.
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2. Product Management :- Existing products and services are changing way for value-added ones thanks to the one-upmanship game among competing banks, sparked off by soaring consumer-demands. Banks are increasingly finding that the most viable way of differentiating themselves will be to successfully manage customer relationships and enhance the overall customer experience. In future, the market space will see banks and non-banks striving to seek opportunities for profit, in wake of product commoditization.
Financial Services: Then & Now Old World Confined marketplace New World
Unlimited market space
Competition between banks
Competition from brands
Limited product Extensive product breadth line One-size-fits-all Customization and product innovation e-Enabled, multi-channel players
Branch-focused
Focus on business growth
Focus on revenue growth as well as cost-reduction
Revenues through margin
Revenue generated through fees and valueadded services
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3. Outsourcing :- The challenge of managing the diverse services in a networked environment has caused the banks to introspect on what should be considered as their core skills and primary roles. Many of them have already started outsourcing functions and processes like data entry of account opening forms and cash management data, and call centre functions. Managing the complexity of the multiple technical components is becoming a challenge to most banks. If banks do invest in creating these skill sets, the value that can be unlocked by spinning off the technology unit is much greater than the advantage of keeping it in-house. This could be in two forms-the products developed like the Internet banking solution created by Security First National Bank or the services company that produces applications themselves, like ICICI InfoTech and IDBI Intec. 4. Insourcing:- Insourcing is a model wherein banks perform operations that are originally done by their customers/other banks. Corporate clients may outsource activities like receivable management, accounting and risk management of corporate investments to banks. New product offerings will emerge as a combination of existing products and the new insourced activities Banks, with their established processing capacities, are ideal partners for insurance and other financial service firms in their pursuit of customer reach and service provision. 5. Analytics :- As they realize that product and related services by themselves cannot provide sustainable competitive advantage, banks are paying more attention to relationship with their customers and the way they manage risk, determine price, and allocate capital. Going forward, banks will attempt to augment their behavioural and economic views of the customer, preferably captured at point of contact in addition to existing transactional and demographic data (in-house and external). Banks will require use of analytics to effectively manage their customer relationships, conduct detailed analysis that help more accurately model, and
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predict future customer behavior and lay a quantified foundation for strategic decision-making. 6. Payment Systems :- In recent years, alternate money transmission avenues, especially the development of electronic money schemes, have been gaining currency. While electronic money has the potential to take over from cash for making small-value payments, making such transactions are becoming easier and cheaper for both consumers and merchants. This raises policy issues for central banks in its role as the guardian of the payment network and implementer of the monetary policy. The emergence of peer-to-peer money transmission mechanisms poses a challenge to current role of banks as gatekeepers to traditional payment systems. Robust payment systems, therefore, are a key requirement in maintaining and promoting financial stability with technology playing both a facilitating and disruptive role in them. 7. Management Representations:-The oral and written representations provided by the management during the course of an audit help in forming an audit opinion, to a large extent. While the audit report fact does recognizes the significance of management estimates, it does not specifically cover management representations. Though one may argue that it is indirectly covered in the words information and explanations, still it deserves specific reference in the report. 8. Unique Business Model:- In todays time the business model is largely driven by products and each service is offered as a product to its customers. Each product has unique features and there is a separate team for handling each of the products. For example is case of advances the portfolio is broadly divided into wholesale and retail banking and further retail banking is divided into auto loans, mortgage loans, loan against shares, housing loans, personal loans, credit cards, etc.
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9. High Level of Fragmentation:- In many banks the operational activities are highly fragmented in terms of the processes and there are different owners for each fragment. For example, the account opening forms or credit application forms are collected at branches/service outlets, the processing of forms/applications is done at central processing centres, customer data is maintained in transactions processing systems at some other location, customer servicing is done from some other location, documents are maintained at some other locations and so on. 10. Complex IT Structure and Environment:- In todays time the banks operate in a highly-complex IT structure and environment. In many banks there are multiple transaction processing system whereas in some banks there is integrated Core Banking System. The data recording, processing, interface, transmission and storage is handled through high level of computerisation. The Future Scenario of Indian Banking:Despite the radical new trends emerging, banks will continue to play their role as trust-enablers in all commercial activities. Their role as financial intermediaries and payment enablers will also continue, but they will be outsourcing all non-core activities to specialized service providers and insource opportunities where they have a saleable value proposition. The transfer of money will not generate profits-it will, however, be the basis of other services that banks will provide. The level of integration that banks achieve with their customers supply chain will determine profitability. Armed with a technology backbone, banking will remain the best business model for managing liquidity, creating trust, and managing risk. The ability to make informed decisions based on business benefits, to become intelligent investors in technology, and seek sourcing options would be some tenets of successful organizations on the right side of this divide.
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A Pie diagram Showing The Contribution of Various Banks in the Indian Economy :-
From the above pie- diagram it is seen that the ICICI bank & the SBI bank are the greatest contributors to the national income. It is been observed that the Indian economy is largely benefited from these two banks & these two banks are bringing paradigm in the Indian banking. The other contributors to the national income are Punjab National Bank, Canara bank, Bank of India, Bank of Baroda, HDFC, Citibank, Standard Chartered, SBI, and ICICI. The contribution of ICICI bank is 49831.3 crores while that of SBI bank is 73886.8 crores . Thus, it is concluded that due to modernization in the banking functions, tremendous growth is been seen in the various banks &has led India to a completely new era of advanced banking & a significant growth is noticed in the countrys economic condition.
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Chapter 8
MERGER & ACQUISITIONS
Business combinations which may take the form of mergers, amalgamations, and takeovers are important features of corporate restructuring and governance. They have played an important role in the growth of a number of leading companies in the world over. subsequent to the structural adjustment programmes in the Indian economy, restructuring of companies in the form of collaborations, mergers and acquisitions have take place in most of the industries including banking, information technology , fast moving consumer goods and pharmaceuticals. Mergers and acquisitions are results of business strategy. While mergers are a result of the decision of two organizations, acquisitions are a takeover of one organization by another. A forced merger or a merger due to survival problem is normally known as an amalgamation. Mergers and acquisitions have been the principal tools of corporate restructuring in India after the implementation of economic reforms since 1991. Merger seems to lead to financial and strategic growth. The Merger between banks in India is a common practice now-a-days. The following case study is an small attempt to explain the benefits & results of the merger of various banks with other banks.
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CASE STUDY OF BANK OF MADURA MERGER WITH ICICI BANK On Friday 8 December 2000, the bank of Madura and ICICI bank decided to work out a merger of the former with the latter. The news published in the daily newspapers on 9 December and the merger decision with swap ratio was officially announced on 11 December 2000. The shareholders approved the decision on 19 January 2001 and the banks got an approval from the RBI on 1 march 2001. The synergies of merger of bank of Madura with ICICI bank can be summarized as follows. Network of over 360 branches. Reduced time for setting up new branches. Combined customer base of 2.7 million. Combined asset base of Rs. 16000 crore, which makes the ICICI bank amongst the largest in private sector banks in India. Financial capability: The merger has enabled them to have a stronger financial and operational structure, which is suppose to be capable of greater resource /deposit mobilization. ICICI bank will emerge as one of the largest private sector banks in the country. Branch network: ICICI banks branch network not only increased by 264, but also increased the geographic coverage as well as convenience to its customers. Customer base: The largest customer base enabled ICICI bank to offer banking and financial services and products and also facilitate cross-selling of products and services of the ICICI group.
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Tech edge: The merger will enable ICICI bank to provide ATMS phone and internet banking and financial services and products to a large customer base, with expected savings in costs and operating expenses. Priority sector advances: Commercial banks are required to lend money to people in the priority sectors which include the farmers, people in rural areas and small-scale industry. ICICI bank did not have many branches in rural areas whereas the bank of Madura had lot of branches in rural and semi urban areas. The enhanced branch network enabled ICICI bank to lend for micro finance activities through self help groups, and for agriculture sector in these priority sector initiatives through its acquired 87 rural and 88 semi urban branches. Managing rural branches: ICICIs major metros and cities, whereas B0M has spread its wings mostly in semi- urban and rural segments of south India. There was as task ahead lying for the merged entity to increase dramatically the business mix of rural branches of the B0M. On the other hand, due to geographic location of its branches and level of competition, ICICI bank would have a tough time to cope with. For example an account holder needed to maintain minimum RS 5000 in the saving banks account with ICICI bank whereas the bank of Madhuras requirement to open a saving bank account was just rs 500. The branches in the rural had a number of customers from low income and middle income groups who couldnt have maintain rs 5000in their saving bank account. Also most of the bank of Madura employees who were working in the rural branches were likely to retire soon as the average age of bank of Madura employees was almost twice that of ICICI bank.
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Chapter 9
CASE STUDY
ICICI bank has carried out a research within the bank to know its recent position in the global market. This was done by taking out the SWOT Analysis within the bank . This is explained as under:
SWOT Analysis SWOT analysis is done for a company, to find out its overall Strengths, Weaknesses, Threats and opportunities leading to gauging the competitive potential of the company. The SWOT Analysis enables a company to recognize its market standing and adopt strategies accordingly. Here SWOT analysis of ICICI bank is made to understand the positioning of the bank better:
STRENGTHS
1. BRAND NAME: ICICI Bank has earned a reputation in the market for extending quality services to the market vis--vis its competitors. It has earned a strong Brand name in banking in a very short span of time. 2. MARKET SHARE: ICICI Bank has the largest market share of 34% in the IT & ITES industry in Hyderabad according to our survey (within the limitation of the sample size.) 3. HUGE NETWORK: ICICI Bank has the highest number of linked branches in the country. The bank operates through a network of 450 BRANCHES AND over 1800 ATMs across India, thus enabling them to serve customer in better way. 4. DIVERSIFIED PORTFOLIO: ICICI Bank has all the products under its belt, which help it to extend the relationship with existing customer. ICICI Bank has 71
umbrella of products to offer their customers, if once customer has relationship with the bank. Some Products, which ICICI Bank is offering are: Retail Banking Business Banking Personal loans & Car loans Demat Services with E-Broking Mutual Fund (ICICI Bank is the Distributor of all Mutual Fund) Insurance Housing Loans 5. SALARY ACCOUNT: One very interesting thing that we have observed in our survey is that ICICI is having an edge over other banks in case of Salary Account. Most of the companies are having their Salary Account with ICICI even if their Current Account is with any other Bank. This is mainly because of the huge network of ATMs and branches of ICICI. 6. WORKING HOURS: ICICI is the only bank which is having its working hours from 8 to 8 which is one of the major strength of ICICI Bank with respect to IT & ITES Industry. Thus some have their Office time in the morning and some have it in the evening so if the working hour of the bank is 8 to 8 it is very convenient for them. 7. TREASURY DEPARTMENT: ICICI is the only bank which is having its treasury department especially for Hyderabad Customers. So customers can get the best rates for foreign exchange. 9. TECHNOLOGY: From its inception, ICICI Bank has adopted a policy of selecting internationally proven and specialized Packaged Systems for its technology
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WEAKNESS
1. TRANSACTION COST: ICICI Bank charges high cost for its transactions. Through our data analysis we have find out that most of the small companies prefer nationalized banks only because of this cost factor. Also the group has found out that there are companies which are going for multi bank system i.e. they are using only those facilities of ICICI Bank which are provided at cheaper rates (read Salary Account) and for other services they are going to nationalize banks and MNCs (read Forex). So there exists a huge potential for ICICI Bank if they are ready to make their transaction cost flexible. 2. FOCUS ONLY ON HIGH END CUSTOMERS: The bank targets only the top bracket of clients and does not cater to the needs of small customers. Due to this reason the bank may sometimes loose good clients. 3. DEFENSIVE APPROACH IN LENDING: ICICI Bank has a defensive approach in lending. Mainly to IT & ITES companies Bank do not provide loan as these companies are not having collaterals so bank hesitate in giving loans to them. Because of this policy companies prefer nationalized banks and ICICI Bank in turn sometimes loose potential customers. 4. LITTLE PRESENCE OUTSIDE INDIA: ICICI Bank is having little presence Outside India, because of which companies are preferring MNC Bank, mainly Citibank. So if ICICI Bank tries to emerge outside India then it has a huge potential of customers. 5. POOR CUSTOMER CARE/SERVICE: With its aggressive marketing ICICI Bank is rapidly increasing its customer base. They are not however, increasing the number of employees accordingly. This is leading to deterioration of the standard of customer service.
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OPPORTUNITIES
1. NEW IT & ITES COMPANIES: IT & ITES sector is on a boom in the Indian market context, with new companies mushrooming in the market; it opens the door for ICICI bank to capture the huge untapped market. 2. Dissatisfied Customers of Other Banks: The group from its survey and analysis of IT companies have found out that there are many companies which are not satisfied with its current bank, so ICICI with its superior service quality and long working hours can capture those customers. 3. Remittances: From the analysis group has also found out that ICICI bank has very little presence as far as the EEFC account is concerned. Companies prefer to bank with MNCs (which have greater presence in the foreign countries) and nationalized banks (which according to the companies provide lower transaction rates) to get their inward remittances in spite of ICICI being providing one of the most competitive rates. So the bank can promote its EEFC account better and get the key to the door of huge potential market. 4. Business advising for smaller Players: The analysis has also indicated that the concept of business advising though very popular with the higher end players is virtually non existent in the lower end of the market. ICICI should take this opportunity to provide business advising to the smaller companies at competitive rates and try to take the first mover advantage.
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THREATS
1. Advent of MNC banks: Large numbers of MNC banks are mushrooming in the Indian market due to the friendly policies adopted by the government. This can increase the level of competition and prove a potential threat for the market share of ICICI bank. 2. Dissatisfied Customers: The analysis indicated that though most of the companies are satisfied with the products offered by ICICI bank but the poor customer support/ service is creating a lot of dissatisfaction among the customers, this can prove to be a serious problem as far as the market reputation of the bank is concerned and cane be a major threat in future business acquisition. 3. Ever improving nationalized banks: With PSU banks like SBI going all out to compete with the private banks and government giving them a free hand to do so, it can prove to be serious threat for banks like ICICI.
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Chapter 10
CONCLUSION & SUGGESTIONS
Conclusion
Indian banking has seen a great shift in the method of its operations along with focus. Techniques like customer relationship management, unknown to the Indian banking system till several years ago, have now acquired special importance. Several scams that have occurred in the banking sector in the recent past have to certain extent even questioned the credibility of banks in maintaining saving deposit accounts. However, different steps taken by RBI and the government. These events have compelled intervention of reserve bank of India and government of India. A proper understanding and implementation of asset liability management may offer solution to some of the problems faced by the banks and confidence in the people.Banks have been witnessed to tremendous changes. The reasons for these new emerging paradigms have been many. Technology, competition resulting in reduced spreads, banks looking out for new avenues to generate income, demanding customers, and have all contributed to a very dynamic banking environment. These paradigms have totally changed the face of banking and have to thrown up new challenges for the bank employees and bank managements. Thus, Indian Banks have seen a Paradigm Shift in the recent 10 years. Indian banking Industry is showing a significant growth in the countrys national income. Banking in India will become a competitive arena of narrower margins and consolidation in the first decade of the 21st century. The new era will mark the end of entitlement for all companies in India.
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Suggestions & Recommendations

I am sure these paradigms shifts in the banking sector will give positive results in the days to come. However, I would like to suggest the following. Restructuring of financial and banking sector should be on going process and should not be a one time affair. There should be transparency in government policies and efficient capital markets where there is a gap. Foreign investment can be encouraged to increase the basis of infrastructure development and in tune with the required funding, supply of savings increase is imperative. Government should introduce wide ranging reforms in certain sectors like power and should improve regulatory framework. Regarding technology in banks it may be suggested that there is a need to Better and cheaper access to basic infrastructure requirement. Creation of customer awareness and education for technology adoption Convert branches and re-engineer the functioning of the branch banking using technology to delivery channels. Set up an electronic banking group. For the operational aspects it is suggested that Core banking essentially implies anytime, anywhere with the latest technology. A review of the credit assessment methodologies and change in the bankerborrower relationship should be change. Various theoretical approaches to portfolio management in bank should be applied. There is a need of merger of Indian banking resulting three big banks. SBI IDBI with two or three other banks and ICICI with few banks 78
The impact of agreement under W.T.O should be studied in detail after that for longer transition period should be negotiated. For creating National Champions, consolidation and merger of some of the banks should be promoted. Indian Banking sector should stop the copying of western Banking models & should take special care to understand the local ethos & cultural background. Banking should become more customer centric, offering a wide range of products through multiple delivery channels. Banks should regularly update themselves with economic & trade related developments.
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BIBLIOGRAPHY
Books Referred: Indian Banking in the new millennium M.P.SRIVA STAVA S.P.SINGH
Newspapers: Business Standard Economic Times Times of India Journals: Business Times Wealth Report 2007 FICCI Study
Websites: www.rbi.org.in www.asianbanker.com www.indianbanks.com

Indian Banking: Paradigm Shift

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INDIAN BANKING: PARADIGM SHIFT