AN OVERVIEW OF INDIAN BANKING SECTOR
A BRIEF HISTORY
SEC TOR OF INDIA VARIOUS BANKING SECTOR MAJOR COMPETITORS OF BANKING SECTOR PRESENT SCENARIO OF INDIAN BANKING
SECTOR VARIOUS SERVICES PROVIDED BY BANKS IN INDIA MARKETING STRATEGY IN INDIA CONCLUSION
Nationalisation of Imperial Bank of India with extensive banking facilities on a large scale specially 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. Seven banks forming subsidiary of State Bank of India was nationalised in 1960 on 19th July, 1969, major process proc ess of nationalisation was carried out. 14 major commercial banks in the country was nationalised. The second phase of nationalisation of Indian banks took place plac e in the year 1980. Seven more banks were nationalised with deposits over 200 crores . Till this year, year, approximately 80% of the banking segment in India were under Government ownership.
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 liberal ralisati ation of banking practices. The The coun countr try y is floo floode ded d with ith fore foreig ign n bank banks s and 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.
Among the Public Sector Banks in India, United Bank of India is one of the 14 major banks which were nationalised on July 19, 1969. Its predecessor, in the Public Sector Banks, the United Bank of India Ltd., was formed in 1950 with the amalgamation of four banks viz. Comilla Banking Corporation Ltd. (1914), Bengal Central Bank Ltd. (191 (1918) 8),, Comi Comill lla a Unio Union n Bank Bank Ltd. td. (192 (1922) 2) and and Hoog Hooghl hly y Bank Bank Ltd. td. (1932).
This Public Sector Bank India has implemented 14 point action plan for strengthening strengthening of credit delivery to women and has designated designated 5 bran branch ches es as spec specia iali lizzed bran branch ches es for wome omen entre ntrepr pre eneur neurss.
The first Private bank in India to be set up in Private Sector Banks in India was IndusInd Bank. It is one of the fastest fastest growing Bank Private Sector Banks in India. IDBI ranks the tenth largest development bank in the world as Private Pr ivate Banks in India and has promoted a world class institutions in India. The first Private Bank in India to receive an in principle approval from the Reserve Bank of India was Housing Development Finance Corporation Limited, to set up a bank in the private sector banks in India as part of the RBI's liberalisation of the Indian Banking Industry. It was incorporated in August 1994 as HDFC Bank Limited with registered office in Mumbai and commenced operations as Scheduled Commercial Bank in January 1995.
The Co operative banks in India started functioning almost 100 years ago.
The cooperative banks in India plays an important role even today in rural financing. The businesses of cooperative bank in the the urba urban n areas areas also also has has incr increas eased ed phen phenom omen enall ally y in recen recentt years due to the sharp increase in the number of primary cooperati operative ve banks. banks.
Co oper operat ativ ive e Ban Banks in Indi India a are are reg egis isttered ered unde underr the the CoCooperative Societies Act. The cooperative bank is also regulated by the RBI. They are governed by the Banking Regulations Act 1949 and Banking Banking Laws Laws (Co-operative (Co-operative Societies) Societies) Act, Act, 1965.
ural Rural
bankin banking g in India India start started ed since since the the estab establis lishme hment nt of banki banking ng sector in India. Rural Banks in those days mainly focussed upon the agro sector.
The Haryana State Cooperative Apex Bank Ltd. commonly called as HARCOBANK plays a vital role in rural banking in the economy of Haryana State and has been providing aids and financing farmers, rural artisans, agricultural labourers, entrepreneurs, etc. in the state and giving service to its depositors. National Bank for Agriculture and Rural Development (NABARD) is a development bank in the sector of Regional Rural Banks in India. It provides and regulates credit and gives service for the promotion and and develo developme pment nt of rural rural sect sector ors s mainly mainly agric agricult ulture ure,, small small scale scale industries, cottage and village industries, handicrafts.
Post offices Mutual fund Share market Insurance Money lenders
Toda oday, the the bank bankin ing g sect sector or in Indi India a is fair fairly ly matur mature e in term termss of suppl supply y, prod produc uctt rang range e and and reac reach. h. As far as priv privat ate e sect sector or and and foreign banks are concerned, the reach in rural India still remains a challenge The Reserve Bank of India is an autonomous body, with minimal pressure from the government. government. Banking industry has been undergoing a rapid transformation. transformation. Banks today are market-driven and market- responsive. They have been managing a world of informatio tion about customers their profiles, location, needs, requirements, cashpositi positions ons etc. etc. Apart from the mobile banking, including of SMS banking, net banking and ATMs are the major steps taken by the banks in India towards towards moderniz modernizatio ation. n.
Currently, India has 88 scheduled commercial banks (SCBs) 28 public sector banks (that is with the Government of India holding a stake)
29 private banks (these do not have government stake; they may be publicly listed and traded on stock exchanges) and 31 foreign banks. They have a combined network of over 53,000 branches and a nd 17,000 ATMs. ATMs. the public sector banks hold over 75 percent of total assets of the banking industry, with the private and foreign banks holding 18.2% and an d 6.5% respectively.
Demat account Lockers Cash management Insurance product Mutual fund product Loans ECS (Electronic clearance system) system) Taxes
Banking services are intangible. They are about the money in diff differen erentt types types and attri attribut butes es lik like lendi lending, ng, depos depositi iting ng and and transferring procedures. These intangible services are shaped in cont contra racts cts.. The struc structur ture e of banki banking ng servi services ces aff affects ects the the success of institution institution in long term. Besides the basic attributes attributes like like speed, security and ease in banking services.
Banks should be very careful in determining their prices and pric price e poli polici cies es.. Beca Becaus use e mista mistake kes s in pric pricin ing g caus cause e customer mers¶ shif hift toward ard the rivals als off offering likewise services.
The complexity of banking services are resulted from different kinds of them. The The mos most impo import rtan antt featu eature re of bank bankin ing g is the the pers persua uasi sion on of cus customer omerss benefiting from services. Most banks services are complex in attribute and when when this this feat feature ure joins joins the intang intangibi ibilit lity y chara charact cteri erist stics ics,, offeri offerings ngs tak take also also mental intangibility in addition to physical intangibility.
ne of the most important element of marketing mix of services is promotion which is consist of personal selling, advertising, public relations, and selling promotional tools.
Due to the characteristics characteristics of banking services, personal selling is the way that most Indian banks prefer prefer in expanding selling and use of them. Personal selling occurs in two ways. First occurs in a way that customer and banker perform interaction face to face at branch office. In this case, whole personnel, bank employees, chief and office manager, takes part in selling. Second occurs in a way that customer representatives representatives go to customers customers place. Customer representatives are specialist in banks services to be offered and they shape the relationship between bank and customer.
Indian Banks have too many goals which they want to achieve. Those goals are for acco accomp mpli lish shin ing g the the obje object ctiv ives es as follo ollow ws in a way way that that banks banks deve develo lop p advertising campaigns and use media : 1. 1. Conceive customers to examine all kinds of of services that banks offer offer.. 2. 2. Increase use of of services services.. 3. 3. Create well fit image about banks and services services.. 4. 4. Change customers attitudes. attitudes. 5. 5. Introduce services of of banks banks.. 6. 6. Support personal selling selling.. Banks care about following following criteria for selection selection of media : 1. 1. Which media the target market prefer prefer.. 2. 2. Characteristics of of service service.. 3. 3. Content of of message message.. 4. 4. Cost Cost.. 5. 5. Situation of of rivals rivals.. The ads which those; banks prepare contain the following : 1. 1. Activities of of banks, results, programs, new services 2. 2. Situation of of market, government decisions, future developments 3. 3. The opportunities offered offered for industry branches whose development meets meets eets national nati nation onal al benefits benefits..
Public relations in banking in India provide; 1. Establishing most effective communication system 2. Creating Creating sympathy about relationship relationship between bank and customer 3. Giving Giving broadest broadest information about activities activities of bank.
Ano Anoth ther er elem elemen entt of the the prom promot otio ion n mixe mixes s of bank banks s is improvement of selling. Mostly used selling improvement tools are layout at selling point, rewarding personnel, seminaries, special gifts, premiums, contests.
Today, the banking sector in India is fairly mature in terms of
supply, product range and reach. As far as private sector and forei oreign gn bank bankss are are conc concer erne ned, d, the the reac reach h in rur rural Indi India a still till remains a challenge. The Indian banking situation is very different from that in Europe and the US. There, banks' distress is the cause of the economic crisis.
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