Description
A bank is a financial institution and a financial intermediary that accepts deposits and channels those deposits into lending activities, either directly by loaning or indirectly through capital markets.
Sector Profile: Banking Sector Indian Banking Sector is extremely critical for the economic development of the country. The last decade witnessed unprecedented growth and value creation in India’s banking sector with little impact from the global financial crisis due to strong regulation and discipline. However, the scenario is now changing due to various reasons. Tightening of monetary policy, a burgeoning fiscal and current account deficit, the need for increased infrastructure lending, de-regulation of interest rates on savings accounts, etc have diluted the robust performance of banks in comparison to other sectors. The RBI had increased lending rates 13 times between March 2010 and October 2011 in a bid to rein in inflation. A direct result of this has been the impact on demand, leading to reduced revenue, lower margins and an increase in non – performing assets (NPAs) of banks. Today, there are various concerns facing the Indian Banking Industry. However, some of the issues that need immediate attention are as follows: Financial Inclusion – Financial inclusion refers to delivery of banking services at an affordable cost to the vast sections of disadvantaged and low income group. Priority Sector Lending – It is based on bringing unbanked into banking community. While sectors included under PSL meet this overarching agenda, it also has to be feasible and self sustaining. Banks are being asked to use Banking Correspondents (BCs) to help meet with their PSL targets. Payment System - The Reserve Bank aims to develop a more efficient and integrated payment system in the country. In its 'Payment Systems In India: Vision 2012-15' document, main focus of RBI is to provide a modern electronic payments system that is safe, simple and low-cost for use by all. Investments in Physical Gold and Real Estate - Today, a lot of money is invested by Indian households in acquiring physical gold and real estate industry that involves huge cash transactions. It is therefore extremely essential for the government to look at ways to reduce high cash transactions so that the money could be channelized by the banks in other revenue generation schemes and liquidity in the system remains intact. On the other hand, though investments in real estate sector contribute to employment creation, it should be made more transparent so that the black money flowing into this sector is controlled and becomes accountable. There should be more digitization of data.
doc_650392561.pdf
A bank is a financial institution and a financial intermediary that accepts deposits and channels those deposits into lending activities, either directly by loaning or indirectly through capital markets.
Sector Profile: Banking Sector Indian Banking Sector is extremely critical for the economic development of the country. The last decade witnessed unprecedented growth and value creation in India’s banking sector with little impact from the global financial crisis due to strong regulation and discipline. However, the scenario is now changing due to various reasons. Tightening of monetary policy, a burgeoning fiscal and current account deficit, the need for increased infrastructure lending, de-regulation of interest rates on savings accounts, etc have diluted the robust performance of banks in comparison to other sectors. The RBI had increased lending rates 13 times between March 2010 and October 2011 in a bid to rein in inflation. A direct result of this has been the impact on demand, leading to reduced revenue, lower margins and an increase in non – performing assets (NPAs) of banks. Today, there are various concerns facing the Indian Banking Industry. However, some of the issues that need immediate attention are as follows: Financial Inclusion – Financial inclusion refers to delivery of banking services at an affordable cost to the vast sections of disadvantaged and low income group. Priority Sector Lending – It is based on bringing unbanked into banking community. While sectors included under PSL meet this overarching agenda, it also has to be feasible and self sustaining. Banks are being asked to use Banking Correspondents (BCs) to help meet with their PSL targets. Payment System - The Reserve Bank aims to develop a more efficient and integrated payment system in the country. In its 'Payment Systems In India: Vision 2012-15' document, main focus of RBI is to provide a modern electronic payments system that is safe, simple and low-cost for use by all. Investments in Physical Gold and Real Estate - Today, a lot of money is invested by Indian households in acquiring physical gold and real estate industry that involves huge cash transactions. It is therefore extremely essential for the government to look at ways to reduce high cash transactions so that the money could be channelized by the banks in other revenue generation schemes and liquidity in the system remains intact. On the other hand, though investments in real estate sector contribute to employment creation, it should be made more transparent so that the black money flowing into this sector is controlled and becomes accountable. There should be more digitization of data.
doc_650392561.pdf