universal banking
TRANSCRIPT
A
PROJECT REPORT
ON
“BANKING TO UNIVERSAL BANKING”
(SUBMITTED IN PARTIAL FULFILLMENT FOR THE AWARD OFMASTER’S DEGREE IN BUSINESS ADMINISTRATION)
UNDER THE GUIDENCE OF: SUBMITTED BY:MR. SANDEEP JAGLAN AARTI AHUJALECTURER, M.B.A. MBA/04/51 DEPARTMENT. 2004-2006
N.C.COLLEGE OF ENGINEERING, ISRANA(KURUKSHETRA UNIVERSITY, KURUKSHETRA)
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INDEX
CERTIFICATE ACKNOWLEDEMENT EXECUTIVE SUMMARY OBJECTIVES OF THE STUDY BANKING IN GENERAL HISTORY OF UNIVERSAL BANKING AN APPROACH TO UNIVERSAL BANKING RESEARCH METHODOLOGY MAJOR POLICY GUIDELINES UNIVERSAL BANKING: AN EMERGING TREND UNIVERSAL BANKING-A PANACEA STRATEGIES OF VARIOUS BANKS EMERGING AS UNIVERSAL
BANK STATE BANK OF INDIA ICICI BANK PUNJAB NATIONAL BANK IDBI BANK UTI BANK BANK OF BARODA HDFC BANK ABN-AMRO BANK BANK OF MAHARASHTRA CENTURION BANK OF PUNJAB CITI BANK JAMMU & KASHMIR BANK BANK OF INDIA CENTRAL BANK OF INDIA DENA BANK ANDHRA BANK
ANALYSIS & INTERPRETATION CONCLUSION SIGNIFICANCE BIBLIOGRAPHY
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ACKNOWLEDGEMENT
No big thing in the world is achieved without the help and blessing of our well wishers. I
feel obliged to express my grateful thanks to all those persons who rendered me all possible
help in completion of this project.
Words fail to express adequately, my feeling of deep gratitude, which I owe to Ms. PUJA
MANN (H.O.D., MBA Department).for her invaluable counsel, constant help and
continuous encouragement at all stages of this work.
I am grateful to Mr. SANDEEP JAGLAN (lecturer, MBA Department), who extended his
whole-hearted and unreserved help to me throughout this project and enabled me to give the
project its present shape.
I would also like to extend my thanks to my supporting faculty of
N.C.C.E., ISRANA, KURUKSHETRA UNIVERSITY.
THANK YOU ALL!
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EXECUTIVE SUMMARYThe study was undertaken to know what exactly UNIVERSAL BANKING is and what a
BANK does to be a UNIVERSAL BANK. How banking and UNIVERSAL BANKING are
different. How the role of a bank today is different from its traditional role.
This study shows the various strategies adopted by different banks in
UNIVERSAL BANKING. It also shows that it is the need of the customer which forces a
BANK to be a UNIVERSAL BANK.
WHAT THIS PROJECT INCLUDES:
This project depicts clear understanding of UNIVERSAL BANKING and its
impacts. Today UNIVERSAL BANKING is a emerging phenomenon. The term
‘UNIVERSAL BANKS’ in general refers to the combination of commercial banking and
investment banking, i.e., issuing, underwriting, investing and trading in securities. In a very
broad sense, however, the term ‘UNIVERSAL BANKS’ refers to those banks that offer a
wide range of financial services, beyond commercial banking and investment banking, such
as, insurance. However, UNIVERSAL BANKING does not mean that every institution
conducts every type of business with every type of customer. UNIVERSAL BANKING is
an option; a pronounced business emphasis in terms of products, customer groups and
regional activity can, in fact, be observed in most cases.
This also shows different products, services, investment, loans, some value
added services of some leading banks in the country. The competition emerging needs,
technology demand these banks to be UNIVERSAL BANKS.
The study has been conducted with the help of the material and information provided
at different banks, through some books on Banking and a few websites.
Some limitations may be there in a study of this nature because some
confidential data may create problems for the banks in future. I have tried my best to
explain the concepts.
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OBJECTIVES OF THE STUDY
To study what is the concept of UNIVERSAL BANKING.
To study in detail what a bank should do for being a UNIVERSAL BANK.
To study strategies of various banks for UNIVERSAL BANKING.
To study the factors which forced banks to go for UNIVERSAL BANKING.
To study what customer needs a bank has to fulfill for being a UNIVERSAL
BANK.
Critically analyzing the different products of various banks which are now well said
to be UNIVERSAL BANKS.
To study how banking change into UNIVERSAL BANKING.
To study the IMPORTANCE OF universal banking
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Indian Banking - Introduction
The Indian banking can be broadly categorized into nationalized (government owned),
private banks and specialized banking institutions.The Reserve Bank of India acts a
centralized body monitoring any discrepancies and shortcoming in the system. Since the
nationalization of banks in 1969, the public sector banks or the nationalized banks have
acquired a place of prominence and has since then seen tremendous progress. The need to
become highly customer focused has forced the slow-moving public sector banks to adopt a
fast track approach. The unleashing of products and services through the net has galvanized
players at all levels of the banking and financial institutions market grid to look anew at
their existing portfolio offering. Conservative banking practices allowed Indian banks to be
insulated partially from the Asian currency crisis. Indian banks are now quoting al higher
valuation when compared to banks in other Asian countries (viz. Hong Kong, Singapore,
Philippines etc.) that have major problems linked to huge Non Performing Assets (NPAs)
and payment defaults. Co-operative banks are nimble footed in approach and armed with
efficient branch networks focus primarily on the ‘high revenue’ niche retail segments.
The Indian banking has finally worked up to the competitive dynamics of the ‘new’ Indian
market and is addressing the relevant issues to take on the multifarious challenges of
globalization. Banks that employ IT solutions are perceived to be ‘futuristic’ and proactive
players capable of meeting the multifarious requirements of the large customers base.
Private Banks have been fast on the uptake and are reorienting their strategies using the
internet as a medium The Internet has emerged as the new and challenging frontier of
marketing with the conventional physical world tenets being just as applicable like in any
other marketing medium.
The Indian banking has come from a long way from being a sleepy business institution to a
highly proactive and dynamic entity. This transformation has been largely brought about by
the large dose of liberalization and economic reforms that allowed banks to explore new
business opportunities rather than generating revenues from conventional streams (i.e.
borrowing and lending). The banking in India is highly fragmented with 30 banking units
contributing to almost 50% of deposits and 60% of advances. Indian nationalized banks
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(banks owned by the government) continue to be the major lenders in the economy due to
their sheer size and penetrative networks which assures them high deposit mobilization. The
Indian banking can be broadly categorized into nationalized, private banks and specialized
banking institutions.
The Reserve Bank of India acts as a centralized body monitoring any discrepancies and
shortcoming in the system. It is the foremost monitoring body in the Indian financial sector.
The nationalized banks (i.e. government-owned banks) continue to dominate the Indian
banking arena. Industry estimates indicate that out of 274 commercial banks operating in
India, 223 banks are in the public sector and 51 are in the private sector. The private sector
bank grid also includes 24 foreign banks that have started their operations here. Under the
ambit of the nationalized banks come the specialized banking institutions. These co-
operatives, rural banks focus on areas of agriculture, rural development etc.,
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HISTORY OF UNIVERSAL BANKING
Converting into commercial banks
Hitherto the business of the financial institutions has been confined to only `credit' with
attendant forex business (with limitations). Apart from the proportion of existing NPAs in
their balance sheets the FIs have to reckon with other important variables while moving
towards commercial banking. Looking at the existing size of the financial institutions as
compared to the bank with which merger is intended, the relatively short gestation period
available to the bank to establish itself amdist the turbulent market/competition, the scenario
is quite challenging. One might well ask what is the input from a financial institution, in a
merger, to a relatively less asset based bank? FIs have had a crucial role in the years
following Independence: in the then prevalent conditions, financial institutions built up
infrastructure contributed to a better industrial climate. The expertise in these fields may be
subserved or enlarged appropriately. However is such expertise relevant for say small, retail
loans-which are promising avenues for the banks of today? Are we looking at another type
of mismatch?
Further, it is a matter of introspection in general: in what may be termed as `conventional' or
`prudent' banking, (RBI itself had raised it in one of its circulars to banks way back in 1974)
in the context of variation in profits (for whatever reasons), the net profit is to be
determined within prudent levels, that is, in years where large increase in profits accrue, it
was considered prudent to allocate larger amounts to `inner reserves' which were
consciously not disclosed in those years. Accordingly, dividend payouts were also
contained to take care of a lean period. The RBI is empowered even now by legislation on
this aspect. However, in the recent past corporates/banks vie with each other to declare
higher dividend payouts. What is worse ``creative accounting'' carries this process further.
For instance, a prudent banker may opt for `written down value' method for depreciating
fixed assets while some banks (including some of the new private sector banks) opt for the
straight line method whereby, profits are more with less depreciation charged to the profit
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and loss account. Ironically they have been preaching to their borrowers those salutary
goals.
The long and short of it
Looked from another perspective, the financial institutions till yesterday are only for `long
term' both on the assets and liabilities sides while commercial banks cater to `short term'
businesses. There was a marked demarcation, though not a `Chinese wall' between these
two. With the advent of market economy, the gap is getting closed through `universal
banking'. The subject is in the air for sometime but currently, rising NPAs and dearth of
avenues for resources for the financial institutions in the wake of falling market sentiments
in the recent period, have accelerated the process. For a few of the FIs survival itself might
be at stake. On the risk parameters, the long term liabilities (at higher rates of interest, in the
context of declining trends) will remain as they.
A relook on the assets side strongly suggests that after netting the NPAs, the existing
`mismatch' might well go up. Barring one or two of the new generation banks and foreign
banks of course, the concept of ALM (asset-liability management) remains an academic
subject. As far as the ICICI Bank is concerned, having only recently completed the takeover
of Bank of Madura, it probably needs some more time to prepare for another drastic
organisational upheaval.
ICICI-ICICI Bank merger (FIRST INDIAN UNIVERSAL BANK)
Yet another dimension: the intended reverse merger of ICICI with ICICI Bank is unique in
other ways too: the top management of ICICI `enbloc' will form the top corporate
management of the ICICI Bank; among banks ICICI Bank may be the first to be headed by
a non-executive Chairman and except for him, all others in the top management, after the
merger might be non-bankers. Also the proposed merger is the first of its kind that a non-
bank of a larger balance sheet size (Rs. 74,371 crores as on March 31, 2001) is proposed
with a commercial bank (Rs. 203,809 crores); post-merger again, the larger complement of
ICICI staff will be non-bankers again, having exposure to `credit' only and would probably
require a refresher course on diverse banking activities, the several enactments as well as
the peculiar banking practices.
Staff incompatibility
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It is pertinent to mention that amalgamation between banks in the past, from a personnel
angle has not been at all compatible - the striking example of the New Bank of India with
the Punjab National Bank is a case in point. But here, larger strength of non-bankers needs
to be groomed and accepted for banking counters! Dealings in financial institutions are
structured in an easier convenient ``one to one basis''unlike in commercial banks where the
personnel are rotated among different functions. There are sharp variations even in lending
practices. For instance, in the FIs loan disbursals are structured over a period as compared
to running accounts of borrowers in banks where they need to respond on the spot to the
situations.
In the context of RBI's dictates, in conformity with Basle Committee prescriptions at the
international level, to banks on `risk management', apparent risks in all spheres may call for
special dispensations to the merged entity and thus one more class of banks (apart from
public sector, old/new private sector, foreign banks) will emerge for the central bank to deal
with. Lest unhealthy precedents are permitted, the central bank may have to envision a long
term strategy to respond to emerging situations. In fact, RBI's policy to have permitted
private banks to be established in the early Nineties has already been reviewed and yet
another phase is now seen in regard to few banks which were then established. In fact, ever
since RBI talked of `risk management' since 1998, except for some sporadic responses, it is
yet to percolate at the top levels of management. So far it has been yet another jugglery with
figures. One has to see the kind of disclosures in annual report of banks abroad on the risk
parameters. The time is not far off for such compulsions from the international arenas (as
the attraction for GAAP registration increases) to take hold. Failure or inaccuracies in
disclosures may do greater harm at the national levels. For example, recently the regulatory
authorities in the U.S. demanded policy documents on certain aspects of banking business:
here, practices exist sans any documents, notwithstanding the infamous securities scam of
the 1990's; such permissiveness need to be contained. The RBI has on its record, such
prescriptions but these need to be enforced with rigour to match the U.S. practices. It is time
that a long term approach, which should be sustained, sans pressures from any quarters is
the need of the hour.
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WHAT IS UNIVERSAL BANKING
The term ‘UNIVERSAL BANKS’ in general refers to the combination of commercial
banking and investment banking, i.e., issuing, underwriting, investing and trading in
securities. In a very broad sense, however, the term ‘UNIVERSAL BANKS’ refers to those
banks that offer a wide range of financial services, beyond commercial banking and
investment banking, such as, insurance. However, UNIVERSAL BANKING does not
mean that every institution conducts every type of business with every type of customer.
UNIVERSAL BANKING is an option; a pronounced business emphasis in terms of
products, customer groups and regional activity can, in fact, be observed in most cases. In
the spectrum of banking, specialised banking is on the one end and the UNIVERSAL
BANKING on the other.
UNIVERSAL BANKS are financial institutions that may offer the entire range of financial
services. They may sell insurance, underwrite securities, and carry out securities
transactions on behalf of others. They may own equity interest in firms, including
nonfinancial firms.
They are multi-product firms in the financial services sector whose complexity is difficult to
manage. In their historical development, organisational structure, and strategic direction,
UNIVERSAL BANKS constitute multi-product firms, within the financial services sector.
This stylized profile of UNIVERSAL BANKS presents shareholders with an anagram of
more or less distinct businesses that are linked together in a complex network which draws
on as set of centralised financial, information, human and organisational resources - a
profile that tends to be extraordinarily difficult to manage in a way that achieves optimum
use of invested capital.
Economics of UNIVERSAL BANKING :
From a production -function perspective, the structural form of UNIVERSAL BANKING
appears to depend on the ease with which operating efficiencies and scale and scope
economies can be exploited - determined in large part by product and process technologies -
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as well as the comparative organizational effectiveness in optimally satisfying client
requirements and bringing to bear market power.
Economies of Scale:
Bankers regularly argue that 'Bigger is better' from a shareholder perspective, and usually
point to economies of scale as a major reason
Individually economies (diseconomies) of scale in UNIVERSAL BANKS will either be
captured as increased profit margins or passed along to clients in the forms of lower
(higher) prices resulting in a gain (loss) of market share. They are directly observable in
cost functions of financial service suppliers and in aggregate performance measures.
Economies of Scope:
Economies of scope arise in multi-product firms because costs of offering various activities
by different units are greater than the costs when they are offered together. On the supply
side, scope economies relate to cost-savings through sharing of overheads and improving
technology through sharing of overheads and improving technology through joint
production of generically similar groups of services.
On the demand side, economies of scope arise when the all-in cost to the buyer of multiple
financial services from a single supplier - including the price of the service, plus
information, search, monitoring, contracting and other transaction costs - is less than the
cost of purchasing them from separate suppliers.
X-efficiency:
Besides economies of scale and scope, it seems likely that UNIVERSAL BANKS of
roughly the same size and providing roughly the same range of services may have very
different cost levels per unit of output. The reasons may involve efficiency-differences in
the use of labour and capital, effectiveness in the sourcing and application of available
technology, and perhaps effectiveness in the acquisition of productive inputs, organisational
design, compensation and incentive systems - and just plain better management.
Absolute Size and Market Power:
UNIVERSAL BANKS are able to extract economic rents from the market by application
of market power. Indeed, in many national markets for financial services suppliers have
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shown a tendency towards oligopoly but may be prevented by regulation or international
competition from fully exploiting monopoly positions..
Value of Income -stream Diversification:
There are potential risk-reduction gains from diversification in UNIVERSAL financial
service organisations, and that these gains increase with the number of activities undertaken.
The main risk-reduction gains appear to arise from combining commercial banking with
insurance activities, rather than with securities activities.
Access to Bailouts:
In such a case, failure of one of the major institutions is likely to cause unacceptable
systemic problems. If this turns out to be the case, then too-big-to-fail organisations create a
potentially important public subsidy for UNIVERSAL BANKING organisations and
therefore implicitly benefit the institutions' shareholders.
Conflicts of Interest:
The potential for conflicts of interest is endemic in UNIVERSAL BANKING, and runs
across the various types of activities in which the bank is engaged:
Salesman's Stake: it has been argued that when banks have the power to sell affiliates'
products, managers will no longer dispense 'dispassionate' advice to clients. Instead, they
will have a salesman's stake in pushing 'house' products, possibly to the disadvantage of the
customer.
Bankruptcy - risk transfer: a bank with a loan outstanding to a firm whose bankruptcy risk
has increased, to the private knowledge of the banker, may have an incentive to induce the
firm to issue bonds or equities - underwritten by its securities unit - to an unsuspecting
public. The proceeds of such an issue could then be used to pay-down the bank loan. In this
case the bank has transferred debt-related risk from itself to outside investors, while it
simultaneously earns a fee and/or spread on the underwriting.
Third party loans: To ensure that an underwriting goes well, a bank may make below-
market loans to third party investors on condition that this finance is used to purchase
securities underwritten by its securities unit.
Tie-ins: A bank may use its lending power activities to coerce or tie-in a customer or its
rivals that can be used in setting prices or helping in the distribution of securities unit. This
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type of information flow could work in the other direction as well.
First Indian Universal Bank
Finally, first Indian Universal Bank will be born on March 31 2002. In effect, this means
ICICI will become a bank on that day (provided the Reserve Bank of India gives it nod)
fulfilling all the statutory requirements. In addition to RBI approval, this merger will be
subject to various other approvals, including the approval of the shareholders of the
respective companies, the High Courts of Mumbai and Gujarat, and the Centre.
The boards of ICICI and its 46 per cent banking subsidiary ICICI Bank on 25th October
approved the reverse merger of the parent into the bank, the appointed date for which has
been fixed as March 31, 2002 or the date of approval of the merger by the Reserve Bank of
India (RBI), whichever is later.
Swap ratio will be one share of ICICI Bank for every two shares of ICICI.. The ADS
holders of ICICI would, consequently, get five ADS of ICICI Bank in exchange for four
ADS of ICICI, as each ADS of the FI represents five domestic equity shares, while each
ADS of the bank represents two domestic shares. The swap ratio was based on the
recommendations of the merchant bankers JM Morgan Stanley, appointed by ICICI, DSP
Merrill Lynch, appointed by ICICI Bank, and the accounting firm, Deloitte, Haskins &
Sells, appointed jointly by both the entities involved in the merger.
ICICI is going in bullet migration path towards universal banking instead of taking a
gradual approach. The combination of easy liquidity and low interest rate regime has
prompted the financial institution to follow this transition approach. ICICI had initially set a
18 month transition period for conversion into universal bank. However with the
announcement that the merged entity will start off with the mandated CRR and SLR
investments the transition period has now been reduced to 5 months.
The merged entity, which will have 11 subsidiaries, in order to adhere to norms laid down
for commercial banks by the Reserve Bank of India (RBI) pertaining to cash reserve ratio
(CRR), statutory liquidity ratio (SLR) would require a hefty Rs 18,000 crore towards its
CRR and SLR obligations.
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With this merger, ICICI Bank, the merged entity, will be the second largest commercial
bank in the country after the State Bank of India (SBI) with assets of Rs 95,000 crore
(September 30, 2001). SBI has assets of over Rs 3,16,000 crore. The combined entity would
have 396 existing branches/ extension counters of the ICICI Bank, 140 retail financial
offices and centres of ICICI and 8,275 employees.
ICICI’s holding of 46 per cent in its banking subsidiary would not be cancelled under the
scheme of amalgamation, but is proposed to be held in Trust for the benefit of the merged
entity. Financial institutions would have 20 per cent in the merged entity, with the foreign
holding at 47 per cent and the rest with the public. ICICI’s 46 per cent stake would
correspond to a 15 per cent stake in the merged entity.
At the time of the merger, ICICI Bank would align the Indian GAAP (generally accepted
accounting practices) of ICICI to those of ICICI Bank, including a higher general provision
against standard assets. Further, in accordance with international best practices in
accounting, ICICI Bank has decided to adopt the “purchase method” of accounting, which
is mandatory under US GAAP, to account for the merger under Indian GAAP as
well.
After merger, N Vaghul will be the chairman & K V Kamath will be the managing director
and CEO of the bank. H N Sinor and Lalitha Gupta will hold the number two slots in the
merged entity with both being designated as joint managing directors. Kalpana Morparia, S
Mukherji, Chanda D Kochhar and Nachiket M Mor will retain their positions as executive
directors.
The retail segment will be a key driver of growth for the merged entity, with respect to both
assets and liabilities. The new entity will leverage on its large capital base, comprehensive
suite of products and services, extensive corporate and retail customer relationships,
technology-enabled distribution architecture, strong brand franchise and vast talent pool.
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UNIVERSAL BANKING: AN OVERVIEW
Universal Banking includes not only services related to savings and loans but also
investments. However in practice the term 'universal banks' refers to those banks that offer a
wide range of financial services, beyond commercial banking and investment banking,
insurance etc. Universal banking is a combination of commercial banking, investment
banking and various other activities including insurance. If specialised banking is the one
end universal banking is the other. This is most common in European countries.
Universal banking has some advantages as well as disadvantages. The main advantage of
universal banking is that it results in greater economic efficiency in the form of lower cost,
higher output and better products. However larger the banks, the greater the effects of their
failure on the system. Also there is the fear that such institutions, by virtue of their sheer
size, would gain monopoly power in the market, which can have significant undesirable
consequences for economic efficiency. Also combining commercial and investment banking
can gives rise to conflict of interests .Conflict of interests was one of the major reasons for
introduction of Glass-Steagall Act in US.
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HOW BANKING TO UNIVERSAL
BANKING
Universal bank is a bank where every need of a customer is solved under one umbrella that
means total solution to a problem. In a universal bank, Investments, loans besides of savings
plays a major important role. Many years back, bank meant a source of deposits for the
people. People had a limited vision for the bank. Now due to globalization, cut throat
competition, banking industry was in dilemma whether to extend its services or not. The
raising standard of people, ever going businesses put a challenge to banking industry. There
developed a concept of universal banking.
Today in this modernized world, when nobody wants to be left behind. The banks have also
started cat-mice race. Every bank today is a universal bank. The major players in banking
industry like ICICI Bank, IDBI Bank, UTI Bank, HDFC Bank etc. have proved to be
emerging universal banks in India. They provide solutions of every problem under one
roof. The have different schemes targeting different people. Every bank has different
products for loans and investment schemes. In a nut shell, we can say that every bank as a
universal bank in this electronic world is proving to be a boon for a common man and
fulfilling his own needs.
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UNIVERSAL BANKING IN INDIA
In India Development financial institutions (DFIs) and refinancing institutions (RFIs) were
meeting specific sectoral needs and also providing long-term resources at concessional
terms, while the commercial banks in general, by and large, confined themselves to the core
banking functions of accepting deposits and providing working capital finance to industry,
trade and agriculture. Consequent to the liberalisation and deregulation of financial sector,
there has been blurring of distinction between the commercial banking and investment
banking.
Reserve Bank of India constituted on December 8, 1997, a Working Group under the
Chairmanship of Shri S.H. Khan to bring about greater clarity in the respective roles of
banks and financial institutions for greater harmonisation of facilities and obligations. Also
report of the Committee on Banking Sector Reforms or Narasimham Committee (NC) has
major bearing on the issues considered by the Khan Working Group.
The issue of universal banking resurfaced in Year 2000, when ICICI gave a presentation to
RBI to discuss the time frame and possible options for transforming itself into an universal
bank. Reserve Bank of India also spelt out to Parliamentary Standing Committee on
Finance, its proposed policy for universal banking, including a case-by-case approach
towards allowing domestic financial institutions to become universal banks.
Now RBI has asked FIs, which are interested to convert itself into a universal bank, to
submit their plans for transition to a universal bank for consideration and further
discussions. FIs need to formulate a road map for the transition path and strategy for smooth
conversion into an universal bank over a specified time frame. The plan should specifically
provide for full compliance with prudential norms as applicable to banks over the
proposed period.
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Approach to Universal Banking
The Narsimham Committee II suggested that Development Financial Institutions (DFIs)
should convert ultimately into either commercial banks or non-bank finance companies. The
Khan Working Group held the view that DFIS should be allowed to become banks at the
earliest. The RBI released a 'Discussion Paper' (DP) in January 1999 for wider public
debate. The feedback on the discussion paper indicated that while the universal banking is
desirable from the point of view of efficiency of resource use, there is need for caution in
moving towards such a system by banks and DFIs. Major areas requiring attention are the
status of financial sector reforms, the state of preparedness of the concerned institutions, the
evolution of the regulatory regime and above all a viable transition path for institutions
which are desirous of moving in the direction of universal banking. It is proposed to adopt
the following broad approach for considering proposals in this area:
The principle of "Universal Banking" is a desirable goal and some progress has already
been made by permitting banks to diversify into investments and long-term financing and
the DFIs to lend for working capital, etc. However, banks have certain special
characteristics and as such any dilution of RBI's prudential and supervisory norms for
conduct of banking business would be inadvisable. Further, any conglomerate, in which a
bank is present, should be subject to a consolidated approach to supervision and regulation.
Though the DFIs would continue to have a special role in the Indian financial System, until
the debt market demonstrates substantial improvements in terms of liquidity and depth, any
DFI, which wishes to do so, should have the option to transform into bank (which it can
exercise), provided the prudential norms as applicable to banks are fully satisfied. To this
end, a DFI would need to prepare a transition path in order to fully comply with the
regulatory requirement of a bank. The DFI concerned may consult RBI for such transition
arrangements. Reserve Bank will consider such requests on a case by case basis.
The regulatory framework of RBI in respect of DFIs would need to be strengthened if they
are given greater access to short-term resources for meeting their financing requirements,
which is necessary.
In due course, and in the light of evolution of the financial system, Narasimham
Committee's recommendation that, ultimately there should be only banks and restructured
NBFCs can be operationalised.
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RESEARCH METHODOLOGY
To define the research methodology, one has to go step by step. Any research methodology
involves following steps:
I. PROBLEM RECOGNITION
II. SURVEY OF LITERATURE
III. HYPOTHESIS FORMULATION
IV. RESEARCH DESIGN
V. SAMPLE DESIGN
VI. DATA COLLECTION
VII. ANALYSIS AND INTERPRETATION.
I. PROBLEM RECOGNITION: Problem formulation is first and the foremost step
consisting of defining and identification of problem.
It is critical to the problem.
Problem formulation is essential to formulate a plan precisely, since suitable
techniques to generate alternative solutions can only then be applied.
After formulation problem is thoroughly studied and reframed analytically.
It is necessary for making research go in specific direction.
The Research Problem in this study is “HOW BANKING EMERGED INTO
UNIVERSAL BANKING”.
II. LITERATURE SURVEY: It means reviewing concepts and theories given by
previous researchers.
Reviewing previous research findings.
It is surveyed to define a problem more specifically.
I have visited sales person, websites of different banks, project reports on
banking, and various search engines.
III. HYPOTHESIS FORMULATION: Hypothesis is any assumption on the basis of
which research is done. The assumption in this research is that the customer exhibit
varying and diverse requirement for any product.
The flexible strategies of different banks make them UNIVERSAL BANKS.
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The diversification in the needs of the customers demands bank to be a
UNIVERSAL BANK.
IV. RESEARCH DESIGN: Research design is a framework in which research resides.
The research opted is EXPLORATORY where we have tried to find out what the
basic thing forces a bank to be a UNIVERSAL BANK. We also studied the
strategies adopted by different banks.
V. SAMPLE DESIGN: A sample is a representative of whole population. Researchers
while conducting research has to draw certain sample for study purpose. A sample
design is a definite plan determined before any data are actually collected for
obtaining samples for the same study. Sample design of my study is RANDOM
SAMPLING.
VI. DATA COLLECTION: The data is of two types: PRIMARY AND SECONDRY.
Data are the facts presented to the researcher from the study environment.
PRIMARY DATA in this research was collected through continuous meeting
with employees, retailers and consumers and also through questionnaires.
SECONDARY DATA was collected through the websites of different banks
and various search engines.
After collection of data it is edited and edited data is put into a
form that makes research meaningful.
21
ISSUES OF CONCERN FOR UNIVERSAL BANKING :
Deployment of capital:
If a bank were to own a full range of classes of both the firm’s debt and equity the bank
could gain the control necessary to effect reorganization much more economically. The
bank will have greater authority to intercede in the management of the firm as dividend and
interest payment performance deteriorates.
Unhealthy concentration of power:
In many countries such a risk prevails in specialized institutions, particularly when they are
government sponsored. Indeed public choice theory suggests that because Universal Banks
serve diverse interest, they may find it difficult to combine as a political coalition – even
this is difficult when number of members in a coalition is large.
Impartial Investment Advice:
There is a lengthy list of problems, involving potential conflicts between the bank’s
commercial and investment banking roles. For example there may be possible conflict
between the investment banker’s promotional role and commercial bankers obligation to
provide disinterested advice. Or where a UNIVERSAL BANK’s securities department
advises a bank customer to issue new securities to repay its bank loans. But a specialized
bank that wants an unprofitable loan repaid also can suggest that the customer issues
securities to do so.
22
Salient operational and regulatory issues to be addressed by the FIs for conversion into
a Universal Banka) Reserve requirements
Compliance with the cash reserve ratio and statutory liquidity ratio requirements (under
Section 42 of RBI Act, 1934, and Section 24 of the Banking Regulation Act, 1949,
respectively) would be mandatory for an FI after its conversion into a universal bank.
b) Permissible activities
Any activity of an FI currently undertaken but not permissible for a bank under Section 6(1)
of the B. R. Act, 1949, may have to be stopped or divested after its conversion into a
universal bank..
c) Disposal of non-banking assets -
Any immovable property, howsoever acquired by an FI, would, after its conversion into a
universal bank, be required to be disposed of within the maximum period of 7 years from
the date of acquisition, in terms of Section 9 of the B. R. Act.
d) Composition of the Board
Changing the composition of the Board of Directors might become necessary for some of
the FIs after their conversion into a universal bank, to ensure compliance with the
provisions of Section 10(A) of the B. R. Act, which requires at least 51% of the total
number of directors to have special knowledge and experience.
e) Prohibition on floating charge of assets
The floating charge, if created by an FI, over its assets, would require, after its conversion
into a universal bank, ratification by the Reserve Bank of India under Section 14(A) of the
B. R. Act, since a banking company is not allowed to create a floating charge on the
undertaking or any property of the company unless duly certified by RBI as required under
the Section.
f) Nature of subsidiaries
23
If any of the existing subsidiaries of an FI is engaged in an activity not permitted under
Section 6(1) of the B R Act , then on conversion of the FI into a universal bank, delinking
of such subsidiary / activity from the operations of the universal bank would become
necessary since Section 19 of the Act permits a bank to have subsidiaries only for one or
more of the activities permitted under Section 6(1) of B. R. Act.
g) Restriction on investments
An FI with equity investment in companies in excess of 30 per cent of the paid up share
capital of that company or 30 per cent of its own paid-up share capital and reserves,
whichever is less, on its conversion into a universal bank, would need to divest such excess
holdings to secure compliance with the provisions of Section 19(2) of the B. R. Act, which
prohibits a bank from holding shares in a company in excess of these limits.
h) Connected lending
Section 20 of the B. R. Act prohibits grant of loans and advances by a bank on security of
its own shares or grant of loans or advances on behalf of any of its directors or to any firm
in which its director/manager or employee or guarantor is interested. The compliance with
these provisions would be mandatory after conversion of an FI to a universal bank.
i) Licensing
An FI converting into a universal bank would be required to obtain a banking licence from
RBI under Section 22 of the B. R. Act, for carrying on banking business in India, after
complying with the applicable conditions.
j) Branch network
An FI, after its conversion into a bank, would also be required to comply with extant branch
licensing policy of RBI under which the new banks are required to allot at east 25 per cent
of their total number of branches in semi-urban and rural areas.
k) Assets in India
An FI after its conversion into a universal bank, will be required to ensure that at the close
of business on the last Friday of every quarter, its total assets held in India are not less than
75 per cent of its total demand and time liabilities in India, as required of a bank under
Section 25 of the B R Act.
24
l) Format of annual reports
After converting into a universal bank, an FI will be required to publish its annual balance
sheet and profit and loss account in the in the forms set out in the Third Schedule to the B R
Act, as prescribed for a banking company under Section 29 and Section 30 of the B. R. Act .
m) Managerial remuneration of the Chief Executive Officers
On conversion into a universal bank, the appointment and remuneration of the existing
Chief Executive Officers may have to be reviewed with the approval of RBI in terms of the
provisions of Section 35 B of the B. R. Act. The Section stipulates fixation of remuneration
of the Chairman and Managing Director of a bank by Reserve Bank of India taking into
account the profitability, net NPAs and other financial parameters. Under the Section, prior
approval of RBI would also be required for appointment of Chairman and Managing
Director.
n) Deposit insurance
An FI, on conversion into a universal bank, would also be required to comply with the
requirement of compulsory deposit insurance from DICGC up to a maximum of Rs.1 lakh
per account, as applicable to the banks.
o)Authorised Dealer’s Licence
Some of the FIs at present hold restricted AD licence from RBI, Exchange Control
Department to enable them to undertake transactions necessary for or incidental to their
prescribed functions. On conversion into a universal bank, the new bank would normally be
eligible for fulfledged authorised dealer licence and would also attract the full rigour of the
Exchange Control Regulations applicable to the banks at present, including prohibition on
raising resources through external commercial borrowings.
p) Priority sector lending
On conversion of an FI to a universal bank, the obligation for lending to “priority sector” up
to a prescribed percentage of their ‘net bank credit’ would also become applicable to it .
q)Prudential norms
After conversion of an FI in to a bank, the extant prudential norms of RBI for the all-India
financial institutions would no longer be applicable but the norms as applicable to banks
would be attracted and will need to be fully complied with.
25
Major Policy Guidelines
Electronic Clearing Service (ECS) Statement for ECS Credits
CO-op banks can enter Co-branded Domestic Credit Card Business
Guidelines on One-Time Settlement Scheme for SME Accounts
Appointment of Foreign Nationals as directors on the board of Indian companies
Risk weights increased on commercial real estate and capital market
Anonymous Order Matching Trading in Government Securities
Relaxation in ECB norms for non-banking finance companies
Internet Banking in India- A Review
Guidelines on purchase/ sale of Non Performing Financial Assets
Use of International Debit Cards/Store Value Cards/Charge Cards/Smart Cards
Settlement of claims in respect of deceased depositors - Simplification of Procedure
Settlement of claims in respect of deceased depositors - Simplification of Procedure
RBI releases the Vision Document for Payment and Settlement Systems
Persons other than individuals barred from opening accounts under PPF Scheme 1968
RBI bars Mifor (Mumbai Interbank Forward Offer Rate)swaps
26
Electronic Clearing Service (ECS) Statements
The RBI has asked the banks in October 2005, to provide the required details to the
customers in their pass book/account statement regarding the credits effected through ECS.
Following is the RBI notification--
Electronic Clearing service (ECS) is increasingly being used by various users like Govt.
Departments, corporate bodies, etc. for repetitive payments like salary, pension, dividends,
interest, etc.br>
2. While ECS has proved to be of great convenience to both, the users and the beneficiary
customers, there has been a rise in the number of complaints. The main complaint is that
details provided by the banks in the Pass Book / Statement of Accounts for the ECS entries,
are not complete and in the absence of details, reconciliation of transactions by the
customers becomes very difficult.
3. It may be mentioned that in the ECS report (paper as well as electronic), a short
abbreviation of the user name is provided to the banks to facilitate provision of details in the
account statements. This abbreviation may be appropriately captured and utilized.
Approval for Co-branded Domestic Credit Card Business
Reserve Bank of India has decided on 17th Sept 2005, to allow licensed and/or scheduled
SCBs to undertake, without risk participation, co-branded domestic credit card business
with tie-up arrangement with one of the scheduled commercial banks, already having
arrangement for issue of credit cards, subject to their fulfilling the following terms and
conditions:
i. The bank should be having a minimum positive networth [real or exchangeable value of
paid-up capital and reserves as defined in Section 11 of the Banking Regulation Act,
1949(AACS)] of Rs. 50 crore as per the latest NABARD Inspection
Report;
ii. The bank should have earned net profit for the last three years and should not have
accumulated losses;
iii. The Gross NPA of the bank should not be more than 10 per cent;
iv. The bank should not have violated prudential norms including individual and group
27
exposure norms fixed by RBI/NABARD;
v. The bank should have complied with the instructions issued by RBI / NABARD on loans
and advances to directors, their relatives/firms etc;
2. The permission granted to an SCB to commence the co-branded credit card business will
be normally valid for a period of two years, subject to review before expiry of the said
period. The SCB has to apply for renewal of the approval from the RBI (RPCD, CO) in the
same way in which initial permission was obtained, three months before its
expiry.
Guidelines on One-Time Settlement Scheme for SME Accounts
Following are the guidelines for one-time settlement of dues relating to NPAs of public
sector banks in SME sector, issued by RBI in the September 2005. These guidelines will
provide a simplified, non-discretionary and non-discriminatory mechanism for one-time
settlement of chronic NPAs in the SME sector. All public sector banks are required to
uniformly implement these guidelines. However, these guidelines will not, cover cases of
wilful default, fraud and malfeasance. Banks shall identify cases of wilful default, fraud and
malfeasance and initiateprompt action.
[i] Coverage
a) The revised guidelines will cover all NPAs in SME sector which have become doubtful
or loss as on March 31, 2004 with outstanding balance of Rs.10 crore and below on the date
on which the account was classified as doubtful.
b) The guidelines will also cover NPAs classified as sub-standard as on 31st March 2004,
which have subsequently become doubtful or loss where the outstanding balance was Rs.10
crore and below on the date on which the account was classified as doubtful.
[ii] Settlement Formula–amount
a) NPAs classified as Doubtful or Loss as on March 31, 2004
The minimum amount that shall be recovered under the revised guidelines in respect of one-
time settlement of NPAs classified as doubtful or loss as on March 31, 2004 will be 100%
of the outstanding balance in the account as on the date on which the account was
categorized as doubtful NPAs.
28
b) NPAs classified as sub-standard as on March 31, 2004 which became doubtful or loss
subsequently
The minimum amount that shall be recovered in respect of NPAs classified as sub-standard
as on March 31, 2004 which became doubtful or loss subsequently would be 100% of the
outstanding balance in the account as on the date on which the account was categorised as
doubtful NPAs, plus interest at existing Prime Lending Rate from April 1, 2004 till the date
of final payment.
[iii] Payment
The amount of settlement arrived at in both the above cases shall preferably be paid in one
lump sum. In cases where the borrowers are unable to pay the entire amount in one lump
sum, at least 25% of the amount of settlement shall be paid upfront and the balance amount
of 75% should be recovered in installments within a period of one year together with
interest at the existing Prime Lending Rate from the date of settlement up to the date of final
payment.
[iv] Sanctioning Authority
The decision on the one-time settlement and consequent sanction of waiver or remission or
write-off shall be taken by the competent authority under the delegated powers.
[v] Non-discretionary treatment
Banks shall follow the above guidelines for one-time settlement of all NPAs covered under
the scheme, without discrimination and a monthly report on the progress and details of
settlements should be submitted by the concerned authority to the next higher authority and
their Central Office..
[vi] Reporting to the Board
Banks shall submit a report on the progress in the one-time settlement of chronic NPAs
under the revised guidelines every quarter to the Board of Directors. A copy of the quarterly
progress report may also be sent to RBI.
Appointment of Foreign Nationals as directors on the board of Indian
companies- Provision under FEMA
29
RBI has clarified that under the Foreign Exchange Management Act, 1999, appointment of
a foreign national as a director on the board of directors of an Indian company does not
require the Reserve Bank’s approval.
It is further clarified that the Reserve Bank has also granted general powers to an Indian
company to make payment in rupees towards sitting fees or commission or remuneration
and travel expenses to and from and within India to its non-whole time director who is
resident outside India and is on a visit to India for the company’s work.
Prudential norms on capital adequacy – Risk weights on banks’ exposures
on commercial real estate and capital market
It has been decided to increase the risk weights for all outstanding commercial real estate
exposures of banks from 100 per cent to 125 per cent with immediate effect. Commercial
real estate exposure is defined as under:
a) Fund based and non-fund based exposures secured by mortgages on commercial real
estates (office buildings, retail space, multi-purpose commercial premises, multi-family
residential buildings, multi-tenanted commercial premises, industrial or warehouse space,
hotels, land acquisition, development and construction, etc.).
b) Investments in Mortgage Backed Securities (MBS) and other securitised exposures
backed by exposures as at (a) above.
It has also been decided to increase with immediate effect the risk weight for credit risk on
capital market exposures from 100 per cent to 125 per cent. Capital market exposures
covers the following:-
a. direct investment by a bank in equity shares, convertible bonds and debentures and units
of equity oriented mutual funds
b. advances against shares to individuals for investment in equity shares (including IPOs
/ESOPs), bonds and debentures, units of equity oriented mutual funds, etc
c. secured and unsecured advances to stock brokers and guarantees issued on behalf of stock
brokers and market makers
Anonymous Order Matching Trading in Government
Securities
30
Reserve Bank of India has announced the launch of the electronic order matching trading
module for Government securities on its Negotiated Dealing System (RBI-NDS-GILTS-
Order Matching Segment, NDS-OM in short) on August1,2005.
As part of its long term objective of developing the Government securities market, the
Reserve Bank had introduced the Negotiated Dealing System (NDS) in February 2002 with
the broad objectives of (i) ushering in an automated electronic reporting and settlement
process, (ii) facilitating electronic auctions and (iii) providing a platform for trading in
Government securities on a negotiated basis as well as through a quote driven mechanism.
The broad features of the NDS-OM system are as follows:
(i). The NDS-OM module is part of Reserve Bank’s Negotiated Dealing System.
(ii). The use of NDS-OM trading module is voluntary and will be available in addition to
the existing telephonebased trading mechanism on NDS.
(iii). During the first phase, the NDS-OM will serve the trading requirements of all Banks,
Primary Dealers and Financial Institutions regulated by RBI that hold current NDS
membership. Other NDS members will be extended access in the next phase, as appropriate.
The option of extending NDS-OM to non-NDS members will be
examined in due course.
(iv). The system will be purely order driven with all orders being matched based on strict
price/time priority.
(v). The system will be an anonymous order matching system wherein identity of parties is
not revealed before or at the time of trade. The Clearing Corporation of India Limited
(CCIL) will become the central counterparty to each trade done on the system.
(vi). The system will allow straight-through processing (STP) and trades executed will flow
straight to CCIL in a ready-for-settlement stage.
Relaxation in External Commercial Borrowings (ECB) for non-banking
finance companies- June 2005
The government has relaxed rules for external commercial borrowings, allowing non-
banking finance companies to raise overseas loans.
Housing finance companies, with approval from the Reserve Bank of India, would be
allowed to issue foreign currency convertible bonds.
31
The government also raised the repayment limit of external commercial borrowings to $200
million from the current$100 million
The Housing Development Finance Corporation (HDFC) is likely to be the first off the
block among housing finance companies to raise an FCCB.
The corporation had already taken shareholder approval in July 2004 to raise $500 million.
HDFC is also likely to raise funds through the ECB route in keeping with its past practice of
raising at least 10 percent of funds from the overseas market.
Eighteen months back, the government had clamped down on housing finance companies
from raising funds through the overseas market.
Overseas funding is attractive today considering that the 5-year US swap rate stands
reduced to below 5 per cent for the first time in a year. The 5-year swap rate is usually used
to price convertible debentures.
Guidelines for External Commercial Borrowings (ECB)
The department of Economic Affairs, Ministry of Finance, and Government of India
monitors and regulates Indian firms' access to global capital markets. From time to time,
they announce guidelines on policies and procedures for ECB and Euro-issues. ECBs
include bank loans, suppliers' and buyers' credits, fixed and floating rate bonds (without
convertibility) and borrowings from private sector windows of multilateral Financial
Institutions such as International Finance Corporation. Euro-issues include Euro-convertible
bonds and GDRs.
The important aspect of ECB policy is to provide flexibility in borrowings by Indian
corporates, at the same time maintaining prudent limits for total external borrowings. The
guiding principles for ECB Policy are to keep maturities long, costs low, and encourage
infrastructure and export sector financing which are crucial for overall growthof
the economy.
The ECB policy focuses on three aspects:
Eligibility criteria for accessing external markets.
The total volume of borrowings to be raised and their maturity structure.
End use of the funds raised.
Detailed guidelines were announced in July 1999.
32
Internet Banking in India–Guidelines
In June 2001 banks were advised to seek prior approval of Reserve Bank of India before
offering transactional services on the Internet. The position has since been reviewed and
RBI has advised on 20th July 2005, that while the offering of Internet Banking services will
continue to be governed by the provisions of the above circular, no prior approval of the
Reserve Bank of India will be required by banks for offering Internet
Banking services.
2. Banks should, however, ensure compliance with the following conditions:
a. The Internet Banking policy has been approved by the Bank's Board.
b. The policy fits into the bank's overall Information Technology and Information Security
policy and ensures confidentialityof records and security systems.
c. The policy takes into account operational risk.
d. The policy clearly lays down the procedure to be followed in respect of "Know Your
Customer" requirements, and
e. The policy broadly meets the parameters laid down in the earlier circular.
Reserve Bank Guidelines on purchase/ sale of Non Performing Financial
Assets
Scope
1. These guidelines would be applicable to banks, FIs and NBFCs purchasing/ selling non
performing financial assets, from/ to other banks/FIs/NBFCs (excluding securitisation
companies/ reconstruction companies).
2. A financial asset, including assets under multiple/consortium banking arrangements,
would be eligible for purchase/sale in terms of these guidelines if it is a non-performing
asset/non performing investment in the books of the selling bank.
3. The reference to 'bank' in the guidelines would include financial institutions and NBFCs.
Structure
4. The guidelines to be followed by banks purchasing/ selling non-performing financial
assets from / to other banks are given below. The guidelines have been grouped under the
following headings:
33
i. Procedure for purchase/ sale of non performing financial assets by banks, including
valuation and pricing aspects.
ii. Prudential norms, in the following areas, for banks for purchase/ sale of non performing
financial assets:
a. Asset classification norms
b. Provisioning norms
c. Accounting of recoveries
d. Capital adequacy norms
e. Exposure norms
iii. Disclosure requirements
5. Procedure for purchase/ sale of non performing financial assets, including valuation and
pricingaspects
i. A bank which is purchasing/ selling non-performing financial assets should ensure that
the purchase/ sale is conducted in accordance with a policy approved by the Board. The
Board shall lay down policies and guidelines covering, inter alia,
a. Non performing financial assets that may be purchased/ sold;
b. Norms and procedure for purchase/ sale of such financial assets;
c. Valuation procedure to be followed to ensure that the economic value of financial assets
is reasonably estimated based on the estimated cash flows arising out of repayments and
recovery prospects;
d. Delegation of powers of various functionaries for taking decision on the purchase/ sale of
the financial assets; etc.
e. Accounting policy
ii. While laying down the policy, the Board shall satisfy itself that the bank has adequate
skills to purchase non performing financial assets and deal with them in an efficient manner
which will result in value addition to the bank. The Board should also ensure that
appropriate systems and procedures are in place to effectively address the risks that a
purchasing bank would assume while engaging in this activity.
iii) The estimated cash flows are normally expected to be realised within a period of three
years and not less than 5% of the estimated cash flows should be realized in each half year.
34
iv) A bank may purchase/sell non-performing financial assets from/to other banks only on
'without recourse' basis, i.e., the entire credit risk associated with the non-performing
financial assets should be transferred to the purchasing bank. Selling bank shall ensure that
the effect of the sale of the financial assets should be such that the asset is taken off the
books of the bank and after the sale there should not be any known liability devolving on
the selling bank.
v) Banks should ensure that subsequent to sale of the non performing financial assets to
other banks, they do not have any involvement with reference to assets sold and do not
assume operational, legal or any other type of risks relating to the financial assets sold.
Consequently, the specific financial asset should not enjoy the support of credit
enhancements / liquidity facilities in any form or manner.
Reserve Bank Guidelines on purchase/ sale of Non Performing Financial
Assets
6. Prudential norms for banks for the purchase/ sale transactions
(A) Asset classification norms
(i). The non-performing financial asset purchased, may be classified as 'standard' in the
books of the purchasing bank for a period of 90 days from the date of purchase. Thereafter,
the asset classification status of the financial asset purchased, shall be determined by the
record of recovery in the books of the purchasing bank with reference to cash flows
estimated while purchasing the asset which should be in compliance with requirements in
Para5 (iii).
(ii). The asset classification status of an existing exposure (other than purchased financial
asset) to the same obligor in the books of the purchasing bank will continue to be governed
by the record of recovery of that exposure and hence may be different.
(B) Provisioning norms
Books of selling bank
i. When a bank sells its non-performing financial assets to other banks, the same will be
removed from its books on transfer.
ii. If the sale is at a price below the net book value (NBV) (i.e., book value less provisions
held), the shortfall should be debited to the profit and loss account of that year.
iii. If the sale is for a value higher than the NBV, the excess provision shall not be reversed
but will be utilized to meet the shortfall/ loss on account of sale of other non performing
35
financial assets.
Books of purchasing bank
The asset shall attract provisioning requirement appropriate to its asset classification status
in the books of the purchasing bank.
(C) Accounting of recoveries
Any recovery in respect of a non-performing asset purchased from other banks should first
be adjusted against its acquisition cost. Recoveries in excess of the acquisition cost can be
recognised as profit.
(D) Capital Adequacy
For the purpose of capital adequacy, banks should assign 100% risk weights to the non-
performing financial assets purchased from other banks. In case the non-performing asset
purchased is an investment, then it would attract capital charge for market risks also. For
NBFCs the relevant instructions on capital adequacy would be applicable.
(E) Exposure Norms
The purchasing bank will reckon exposure on the obligor of the specific financial asset.
Hence these banks should ensure compliance with the prudential credit exposure ceilings
(both single and group) after reckoning the exposures to the obligors arising on account of
the purchase. For NBFCs the relevant instructions on exposure norms would be applicable.
7. Disclosure Requirements
Banks which purchase non-performing financial assets from other banks shall be required to
make the following disclosures in the Notes on Accounts to their Balance sheets:
Use of International Debit Cards/Store Value Cards/Charge Cards/Smart
Cards by Resident Indians while on a visit outside India
Reserve Bank of India in June 2005 has issued clarifications to the banks on the usage of
International Debit Cards by Resident Indians while on a visit outside India
A. International Debit Cards
2. It is understood that banks authorised to deal in foreign exchange (AD banks) are issuing
36
International Debit Cards (IDCs) which can be used by a resident for drawing cash or
making payment to a merchant establishment overseas during his visit abroad. It is clarified
that IDCs can be used only for permissible current account transactions and the item-wise
limits as amended from time to time, are equally applicable to payments made through use
of these cards.
3. It is further clarified that the IDCs cannot be used on internet for purchase of prohibited
items like lottery tickets, banned or proscribed magazines, participation in sweepstakes,
payment for call-back services etc., i.e. for such items/activities for which drawl of foreign
exchange is not permitted.
B. Store Value Cards/ Charge Cards/Smart Cards etc.
4. It has come to RBI notice that certain AD banks are also issuing Store Value
Card/Charge Card/Smart Card to residents traveling on private/business visit abroad which
are used for making payments at overseas merchant establishments and also for drawing
cash from ATM terminals. It is clarified that no prior permission from Reserve Bank is
required for issue of such cards. However, the use of such cards is limited to permissible
current account transactions and subject to the prescribed limits under the Foreign Exchange
Management (Current Account Transactions) Rules, 2000, as amended from time to
time.
Settlement of claims in respect of deceased depositors - Simplification of
Procedure
In the light of the recommendations of the Committee on Procedure and Performance Audit
on Public Services (CPPAPS) Reserve Bank has issued on 9th June 2005, following
instructions to facilitate expeditious and hassle-free settlement of claims on the death of a
depositor.
2. ACCESS TO BALANCE IN DEPOSIT ACCOUNTS
(A) Accounts with survivor/nominee clause
2.1 As you are aware, in the case of deposit accounts where the depositor had utilized the
nomination facility and made a valid nomination or where the account was opened with the
survivorship clause ("either or survivor", or "anyone or survivor", or "former or survivor" or
"latter or survivor"), the payment of the balance in the deposit account to the
survivor(s)/nominee of a deceased deposit account holder represents a valid discharge of the
37
bank's liability provided :
a. the bank has exercised due care and caution in establishing the identity of the
survivor(s) / nominee and the fact of death of the account holder, through appropriate
documentary evidence;
b. there is no order from the competent court restraining the bank from making the payment
from the account of the deceased; and
c. it has been made clear to the survivor(s) / nominee that he would be receiving the
payment from the bank as a trustee of the legal heirs of the deceased depositor, i.e., such
payment to him shall not affect the right or claim which any person may have against the
survivor(s) / nominee to whom the payment is made.
2.2 It may be noted that since payment made to the survivor(s) / nominee, subject to the
foregoing conditions, would constitute a full discharge of the bank's liability, insistence on
production of legal representation is superfluous and unwarranted and only serves to cause
entirely avoidable inconvenience to the survivor(s) / nominee and would, therefore, invite
serious supervisory disapproval. In such case, therefore, while making payment to the
survivor(s) / nominee of the deceased depositor, the banks are advised to desist from
insisting on production of succession certificate, letter of administration or probate, etc., or
obtain any bond of indemnity or surety from the survivor(s)/nominee, irrespective of the
amount standing to the credit of the deceased account holder.
(B) Accounts without the survivor/nominee clause
2.3 In case where the deceased depositor had not made any nomination or for the accounts
other than those styled as "either or survivor" (such as single or jointly operated accounts),
banks are advised to adopt a simplified procedure for repayment to legal heir(s) of the
depositor keeping in view the imperative need to avoid inconvenience and undue hardship
to the common person. In this context, banks may, keeping in view their risk management
systems, fix a minimum threshold limit, for the balance in the account of the deceased
depositors, up to which claims in respect of the deceased depositors could be settled without
insisting on production of any documentation other than a letter of indemnity.
3. Premature Termination of term depositaccounts
38
In the case of term deposits, banks are advised to incorporate a clause in the account
opening form itself to the effect that in the event of the death of the depositor, premature
termination of term deposits would be allowed. The conditions subject to which such
premature withdrawal would be permitted may also be specified in the account opening
form. Such premature withdrawal would not attract any penal charge.
4. Treatment of flows in the name of the deceased depositor
In order to avoid hardship to the survivor(s) / nominee of a deposit account, banks are
advised to obtain appropriate agreement / authorization from the survivor(s) / nominee with
regard to the treatment of pipeline flows in the name of the deceased account holder. In this
regard, banks could consider adopting either of the following two approaches:
The bank could be authorized by the survivor(s) / nominee of a deceased account holder to
open an account styled as 'Estate of Shri ________________, the Deceased' where all the
pipeline flows in the name of the deceased account holder could be allowed to be credited,
provided no withdrawals are made.
OR
The bank could be authorized by the survivor(s) / nominee to return the pipeline flows to
the remitter with the remark "Account holder deceased" and to intimate the survivor(s) /
nominee accordingly. The survivor(s) / nominee / legal heir(s) could then approach the
remitter to effect payment through a negotiable instrument or through ECS transfer in the
name of the appropriate beneficiary.
5. Access to the safe deposit lockers / safe custody articles
For dealing with the requests from the nominee(s) of the deceased locker-hirer / depositors
of the safe-custody articles (where such a nomination had been made) or by the survivor(s)
of the deceased (where the locker / safe custody article was accessible under the
survivorship clause), for access to the contents of the locker / safe custody article on the
death of a locker hirer / depositor of the article, the banks are advised to adopt generally the
foregoing approach, mutatis mutandis, as indicated for the deposit accounts. Detailed
guidelines in this regard are, however, being issued separately.
Financing of acquisition of equity in overseas companies
39
RBI has decided on 7th June 2005, to allow banks to extend financial assistance to Indian
companies for acquisition of equity in overseas joint ventures/wholly owned subsidiaries or
in other overseas companies, new or existing, as strategic investment, in terms of a Board
approved policy, duly incorporated in the loan policy of the bank. Such policy should
include overall limit on such financing, terms and conditions of eligibility of borrowers,
security, margin, etc.
3. While the Board may frame its own guidelines and safeguards for such lending, such
acquisition(s) should be beneficial to the company and the
country.
4. The finance would be subject to compliance with the statutory requirements under
Section 19(2) of the Banking Regulation Act, 1949.
RBI RELEASES VISION DOCUMENT FOR PAYMENT AND
SETTLEMENT SYSTEMS
The Reserve Bank of India has released on the 3rd May 2005, the Vision Document for
Payment and Settlement Systems. The document lists the accomplishments in the area of
payment system during the last three years and gives a roadmap for its further advancement
during the next three years.
Safety, security, soundness and efficiency have been identified in the document as the key
themes of the payment systems upgradation efforts. Whereas safety in payment and
settlement systems relates to risk reduction measures, security pertains to confidence in the
integrity of the payment systems. All payment systems are envisaged to be on sound footing
with adequate legal backing for operational procedures and transparency norms. Efficiency
enhancements are envisaged by leveraging the benefits of technology for cost
effective solutions.
The document also details the action points for upgradation of the payment systems with
definite milestones during next three years. During the first year, i.e., 2005-06, focus would
be on setting up of a new institution for all retail payment systems and operationalising a
National Settlement System (NSS). The new institution would be a limited company, owned
and operated by banks and would act as an umbrella organisation for all retail clearing
40
operations - both paper based and electronic. Apart from starting robust technology
intensive electronic credit system (ECS) and electronics funds transfer (EFT) facility, the
proposed institution would take initiatives on converting existing MICR clearing to cheque
truncation based clearing. ATM switching, multi application smart card, e-commerce and
m-commerce would be other activities of the new institution. The proposed NSS system
would facilitate centralised settlement of all clearing transactions at one place so that banks
can pool their balances and manage their liquidity optimally. To start with, all clearing
settlements at the four metropolitan centres (i.e., Mumbai, Delhi, Kolkata and Chennai)
would be settled under NSS system by December 2005.
The Vision Document emphasises creation of a sound legal base by way of Payment
System Act and regulations made under the bill. Making all large value payment systems
like RTGS, Government Securities Clearing (G-Sec Clearing), FOREX Clearing and High
Value Clearing compliant with Core Principles of Systemically Important Payment Systems
(SIPS) has been indicated as another important objective. Creating a sound legal base will
form a part of this compliance initiative. The Vision Document also indicates that MICR
clearing would be introduced at 14 centres (in addition to 40 existing centres) by
March 2007.
Government of India Notification dated May 13, 2005 issued by Ministry of Finance, has
amended the provisions of the PPF Scheme, 1968 with effect from May 13, 2005.
i) Sequel to amendments to various Small Savings Schemes to restrict the scope of
investments only to individuals, the accounts, if any, opened by juristic persons (HUFs,
Trusts, Provident Funds, etc.) i.e. persons other than individuals (through single or joint
accounts or deposits by guardians on behalf of minors and persons of unsound mind as per
rules) on or after May 13, 2005, under any of the small savings scheme including Public
Provident Fund Scheme, 1968, shall be treated as void ab initio and immediate action
should be taken to close such accounts and to refund the deposits without any interest to the
depositors.
ii) It may, however, be noted that the above amendments shall not be applicable to the
existing accounts opened in accordance with the rules in operation prior to the amendments
dated May 13, 2005. These shall continue till maturity and deposits/withdrawals in/from
these accounts shall be allowed to be made in accordance with the said rules. However, any
extension of existing accounts shall be subject to the amendments dated May 13, 2005.
41
Reserve Bank of India bars Mifor (Mumbai Interbank Forward Offer
Rate)swaps
The Reserve Bank of India (RBI) has asked market participants to discontinue trades in
Mifor swaps. On specific request from players, the RBI had earlier permitted Libor rates,
which was used to price Mifor rates, the central bank has now asked players to use domestic
benchmarks for market making or hedging balance sheets.
While the RBI has been concerned about the rapid growth in outstanding contracts in Mifor
to over Rs 1,00,000 crore, the more important issue is of it being used as a mere speculative
tool by corporates, without any underlying exposure such as loans under ECBs.
RBI Circular dated 20th May 2005
Please refer to the guidelines for interest rate derivatives circulated on July 7, 1999 whereby
banks / FIs and PDs were enabled to use Forward Rate Agreements (FRA) and Interest Rate
Swaps (IRS) in order to manage and control risks arising from deregulation of interest rates.
These institutions were also permitted to use the products for market making and offer them
to corporates for hedging balance sheet exposures.
2. However, on specific requests from banks, LIBOR was permitted to be used as
benchmark, since rupee benchmarks other than the MIBOR were then still to develop and
find wide acceptance. Market participants, are therefore, advised that henceforth, they
should use only domestic rupee benchmarks for interest rate derivatives. Market participants
are, however, given a transition period of six months for using MIFOR as a benchmark,
subject to review and are advised to desist from taking any measures that would undermine
the intent of this circular.
3. The existing contracts with non-domestic rupee benchmarks may however continue as
per the terms of the contract or be closed out on mutually agreed terms between the
counterparties to the contract.
Customer service in Banking Operations-
Report of RBI's Committee on Procedures and Performance Audit on Public Services
Customers of foreign and new private banks are discouraged by these banks from
42
transacting through bank branches. These banks often refuse to give an acknowledgement
on the deposit slip if the cheques are deposited at branch counters. Following instructions
will bring relief to a large section of customers.
Cheque Drop Box Facility
RBI's Committee on Procedures and Performance Audit on Public Services has
recommended that both the drop box facility and the facility for acknowledgement of the
cheques at the regular collection counters should be available to customers and no branch
should refuse to give an acknowledgement if the customer tenders the cheques at the
counters. We agree with the recommendation and advise that it is important that there is no
curtailment of the rights of the depositor to obtain an acknowledgement by goingto the
concerned counter.
Issue of Cheque Books
The Committee has observed that some banks do not allow depositors to collect their
cheque book at the branch but insist on despatching the cheque book by courier to the
depositor. Further, it is stated by the Committee that the depositor is forced to sign a
declaration that a despatch by the courier is at the depositor's risk and consequence and that
the depositor shall not hold the bank liable in any manner whatsoever in respect of such
despatch of cheque book. Committee has observed this as an unfair practice and advised
banks to refrain from obtaining such undertakings from depositors. Banks should also
ensure that cheque books are delivered over the counters on request to the depositors or his
authorised representative.
Statement of Accounts/Pass Books
The Committee has noted that banks invariably show the entries in depositors passbooks /
statement of accounts as "By Clearing" or "By Cheque". Further, in the case of Electronic
Clearing System (ECS) and RBI Electronic Funds Transfer (RBIEFTR) banks invariably do
not provide any details even though brief particulars of the remittance is provided to the
receiving bank. In some cases computerized entries use sophisticated codes which just
cannot be deciphered. With a view to avoiding inconvenience to depositors, banks are
advised to avoid such inscrutable entries in passbooks / statements of account and ensure
that brief, intelligible particulars are invariably entered in passbooks / statements of account.
Banks may also ensure that they adhere to the monthly periodicity prescribed by us while
43
sending statement of accounts.
Universal Banking: An Emerging
Trend…
Economic historians have long emphasized the importance of financial institutions in
industrialization. More recently, economists have begun more intensive investigation of the
links between financial system structure and real economic outcomes. In theory, the
organization of financial institutions partly determines the extent of competition among
financial intermediaries, the quantity of financial capital drawn into the financial system,
and the distribution of that capital to ultimate uses. The choice between universal and
specialized banking may affect interest rates, underwriting costs, and the efficiency of
secondary markets in securities. Furthermore, the presence or absence of formal bank
relationships may affect the quality of investments undertaken, strategic decision-making,
and even the competitiveness of industry.
Particularly since World War II, many economists and historians have argued that German-
style universal banks offer advantages for industrial development and economic growth.
Universal banking efficiency combined with close relationships between banks and
industrial firms, they hypothesize, spurred Germany’s rapid development at the end of the
nineteenth century and again in the post-World War II reconstruction. A corollary to this
view holds that countries that failed to adopt the universal-relationship system suffered as a
consequence. Adherents suggest that British industry has declined over the past hundred
years or more, and that the American economy has failed to reach its full potential, due to
short-comings of the financial system that lead to relatively high costs of capital.
In Indian context, the phenomenon of universal banking—as different from narrow banking
—has been in the news in the recently. With the last Narasimham Committee and the Khan
Committee reports recommending consolidation of the banking industry through mergers
and integration of financial activities, the stage seems to be set for a debate on the entire
issue.
A universal bank is a ‘one-stop’ supplier for all financial products and activities, like
deposits, short-term and long-term loans, insurance, investment banking etc. Global
experience with universal banking has been varied. Universal banking has been prevalent in
44
different forms in many European countries, such as Germany, Switzerland, France, Italy
etc. For example, in these countries, commercial banks have been selling insurance
products, which have been referred to as Banc assurance or Allfinanz.
After the stock market crash of 1929 and banking crisis of the 1930s, the US banned all
forms of universal banking through what is known as the Glass- Steagall Act of 1933. This
prohibited commercial banks from investment banking activities, taking equity positions in
borrowing firms, selling insurance products etc. The idea was to mitigate risky behaviour by
restricting commercial banks to their traditional activity of accepting deposits and lending.
Research on the effects of universal banking has been inconclusive as there is no clear-cut
evidence in favour of or against it anywhere. Nevertheless, the United States has once again
started moving cautiously towards universal banking through the Gramm-Leach-Bliley Act
of 1999 which rolled back many of the earlier restrictions. Some recent phenomenon, like
the merger between Citicorp (banking group) and Travelers (insurance group) confirmed
the fact that universal banking is here to stay. Hence it becomes all the more imperative to
know whether we need universal banks in India. And whether it is a more efficient concept
than the traditional narrow banking. What are the benefits to banks from universal banking?
The standard argument given everywhere—also by the various Reserve Bank committees
and reports—in favour of universal banking is that it enables banks to exploit economies of
scale and scope. What it means is that a bank can reduce average costs and thereby improve
spreads if it expands its scale of operations and diversifies its activities.
By diversifying, the bank can use its existing expertise in one type of financial service in
providing the other types. So, it entails less cost in performing all the functions by one
entity instead of separate specialized bodies. A bank possesses information on the risk
characteristics of its clients, which it can use to pursue other activities with the same clients.
This again saves cost compared to the case of different entities catering to the different
needs of the same clients. A bank has an existing network of branches, which can act as
shops for selling products like insurance. This way a big bank can reach the remotest client
without having to take recourse to an agent. Many financial services are inter-linked
activities, e.g. insurance and lending. A bank can use its instruments in one activity to
exploit the other, e.g., in the case of project lending to the same firm which has purchased
insurance from the bank.
Now, let us turn to the benefits accruing to the customers. The idea of ‘one-stop-shopping’
45
saves a lot of transaction costs and increases the speed of economic activity. Another
manifestation of universal banking is a bank holding stakes in a firm. A bank’s equity
holding in a borrower firm acts as a signal for other investors on the health of the firm, since
the lending bank is in a better position to monitor the firm’s activities. This is useful from
the investors’ point of view.
Of course, all these benefits have to be weighed out against the problems. The obvious
drawback is that universal banking leads to a loss in economies of specialization. Then there
is the problem of the bank indulging in too many risky activities. To account for this,
appropriate regulation can be devised, which will ultimately benefit all the participants in
the market, including the banks themselves.
In spite of the associated problems, there seems to be a lot of interest expressed by banks
and financial institutions in universal banking. In India, too, a lot of opportunities are there
to be exploited. Banks, especially the financial institutions, are aware of it. And most of the
groups have plans to diversify in a big way.Even though there might not be profits
forthcoming in the short run due to the switching costs incurred in moving to a new
business.
The long-run prospects, however, are very encouraging. At present, only an ‘arms-length’
relationship between a bank and an insurance entity has been allowed by the regulatory
authority, i.e. the Insurance Regulatory and Development Authority (IRDA). This means
that commercial banks can enter insurance business either by acting as agents or by setting
up joint ventures with insurance companies. And the RBI allows banks to only marginally
invest in equity (5 per cent of their outstanding credit).
Development financial institutions (DFIs) can turn themselves into banks, but have to
adhere to the statutory liquidity ratio and cash reserve requirements meant for banks. Even
then, some groups like the HDFC (commercial banking and insurance joint venture with
Standard Assurance), ICICI (commercial banking), SBI (investment banking) etc., have
already started diversifying from their traditional activities through setting up subsidiaries
and joint ventures. In a recent move, the Life Insurance Corporation increased its stakes in
Corporation Bank and is planning to sell insurance to the customers of the Bank.
Corporation Bank itself has been planning to set up an insurance subsidiary since a long
time. Even a specialized DFI, like IIBI, is now talking of turning into a universal bank.
All these can be seen as steps towards an ultimate culmination of financial intermediation in
46
India into universal banking.
Mobile Banking
Vipera Mobile Banking Solution enables banks to easily provide their customers with
mobile access to banking services. Customers can securely view account information,
manage transfers, pay bills and more using their Java compatible mobile phone, anytime,
anywhere.
HOW IT WORKSThe Vipera Mobile Banking Solution combines the security and flexibility of a client-server
approach with the ease of use of Internet browser navigation. Main components of the
solution are:
A client Java (J2ME-MIPD) application on the mobile device (WAP and SMS
based interaction also supported), through which users can access all the features of
their bank accounts by simple interactions with forms, menus and buttons. The user
interface is tailored to the limited screen real-estate of different mobile devices and
limited text input capabilities of phone keyboards;
a backend application that manages information and transactions exchange
between the client and the bank's existing infrastructure;
The Vipera Network, that securely and reliably manages all the communication
between the client application and the backend application.
47
Thoughts on universal banking:
One key question: the financial institutions, with subsidised funds, tax incentives and
other concessions have been unable to add to their resources (capital formation) over
decades.
IN THE early Nineties the forces of globalisation were unleashed on the hitherto protected
Indian environment. The financial sector was crying out for reform. Public sector banks
which had a useful role to play earlier on now faced deteriorating performance. For these
and certain other reasons private banking was sought to be encouraged in line with the
Narasimham Committee's recommendations.
It would be pertinent to recapitulate the prevailing conditions in the banking industry in the
early Nineties: the nationalized sector had outlived its utility; in fact they became burdened
with unwelcome legacies; customer service had become a casualty; need for
computerization, including networking among the vast branch network was felt. Private
banking in that context was viewed a brand new approach, to bypass the structural and other
shortcomings of the public sector. A few of the new ones that were promoted by the
institutions such as the IDBI and ICICI did establish themselves, though in varying degrees,
surviving the market upheavals of the 1990.That was possible apart from other factors due
to the highly professional approach some of them adopted: it helped them stay clear of the
pitfalls of nationalized banking. Yet in less than a decade after the advent of these new
generation banks, some of the successful ones, are being forced to change organisationally
and in every other way. Who benefits after this restructuring is something that has to be
asked.
It is essential to assimilate history of banking as well as the role of the financial institutions
till recently. The branch banking concept with which we are familiar and practiced since
inception is basically on certain `protected' fundamentals. The insulated economy till the
Nineties provided comforts to public sector banks, in areas of liquidity management while
in an administered interest regime, discretion of managements was limited and
consequently, the risk parameters in these spheres were hazy and not quantifiable. The share
of private sector banks which is distinctly known as old private sector banks' established
before 1994, was thus not substantial while operations of foreign banks were also restricted.
48
Staff orientation especially at the branch level is a key ingredient for success and neither the
older private banks nor the nationalised banks were successful in that respect.
The woes of the public sector banks till date relate to handling volumes, be it in the area of
transactions or staff complement or branch offices. Post nationalisation, mass banking sans
commercial or professional goals, indiscreet branch expansion, lack of networking, wide
gaps/inefficiency at the levels of control apart from environmental impacts, contributed to
their present status.
Turning to recent merger announcement between the ICICI and its more recently promoted
banking subsidiary the following become relevant. One of the main motivations has been
the need to access a low cost retail deposit base. Public sector banks, by way of contrast
never had to face such a constraint.
Today, in a market driven economy, to face the competition, one factor is the size and
hence, mergers are advocated. Talking of the PSBs it is relevant to note that except for a
build up of savings accounts (as low cost deposits), the advantage of vast branch network is
yet to be exploited by them while on the other hand, most of the complaints, irregularities,
mounting arrears in reconciliation are attributable to such branch expansion.
At the same time, this has enabled a few of the smart foreign/new private sector banks to
enrich themselves by offering cash management products, utilising the same branch
network! All these pose a question to the recent merger of Bank of Madura - will the ICICI
Bank decide to shed unwanted, unremunerative branches? Pertinently for all banks the RBI
has already provided an exit route but there have been no takers among the public sector
banks, for obvious reasons.
Pertinent again is to note that another set of banks, namely, foreign banks prospered during
all these difficult days. Even today, these banks do not have branch network to speak of but
in terms of volume, profitability they are far ahead of the public sector banks. Only a couple
of new private sector banks have posed any challenge to them in the recent years.
49
UNIVERSAL BANKING-A PANACEA
UNIVERSAL BANKING, believed to be the panacea for beleaguered development
financial institutions (DFIs), is almost here. Last October, ICICI set in motion the process to
transform itself into a universal bank.
It was soon followed by IDBI in submitting a universal banking proposal to the regulator,
the Reserve Bank of India. For a while, it appeared that DFIs had finally found a solution to
their problems. Just for a while though. A few days ago none other than the RBI Governor,
Mr Bimal Jalan, publicly suggested that universal banking was unlikely to be the antidote to
DFIs' historical baggage. Now, we are back to asking a basic question: What can universal
banking actually do?
A recap
Universal banking has been in the air for long. ICICI has used every forum to acquaint
people with the concept and likely benefits of universal banking for a DFI like itself.
Interest in universal banking surged following governing board level approval for ICICI's
plan to merge itself with ICICI Bank in October 2001.
Both the companies are in the process of seeking approvals from shareholders, courts and
the RBI. Soon after ICICI's announcement, IDBI too submitted a proposal on converting
itself into a universal bank. Both proposals are being examined.
Universal banks
Simply put, a universal bank is a supermarket for financial products. Under one roof,
corporates can get loans and avail of other handy services, while individuals can bank and
borrow. To convert itself into a universal bank, an entity has to negotiate several regulatory
requirements. Therefore, universal banks in the Indian context have been in the form of a
group offering a variety of services under an umbrella brand such as ICICI or HDFC. Even
finance companies such as Sundaram Finance use the goodwill associated with their brand,
and the years of information and insight, to offer a number of services under an umbrella
brand.
Need to move farther
Since ICICI already practices a form of universal banking, the company's decision to merge
50
with ICICI Bank begs the question, why change the system now? The answer to that
question lies in the complex and messy past of DFIs — in this context ICICI, IDBI and
IFCI.
The DFIs were established to assess and finance viable industrial projects that required
long-term funds. The government made available subsidised funds to help carry out on-
lending. In the early 1990s, subsidised funding to DFIs was terminated, thereby forcing
them to rely on the market for resources.
Soon after, loans granted by DFIs in the early and mid-1990s to industrial projects in steel,
textiles and basic chemicals, among others, began to experience time- and cost-over-runs.
Thus, in the past few years, DFIs had to deal with two huge problems — the termination of
subsidised funding and a significant chunk of loans turning bad.
ICICI was the earliest to articulate a new strategy to combat the problems. Once loans to
commodity industries began to turn bad, the company's incremental lending was directed at
short-term loans for working capital and retail customers. At the same time, ICICI lobbied
for years to reverse-merge itself with ICICI Bank — a commercial bank promoted by ICICI
in January 1994. Banks, by virtue of collecting savings and time deposits, have the cheapest
source of funds, and a merger with ICICI Bank should help ICICI access the funds at the
lowest possible cost for a commercial entity. After years of lobbying, ICICI took the step to
convert itself into a universal bank last October. IDBI, still owned largely by the
Government and subject to a different set of rules, has begun to work towards a merger with
a commercial bank. Though IDBI has promoted a commercial bank, IDBI Bank, the DFI is
believed to be exploring the possibility of a merger with a state-owned commercial bank.
Grey areas of universal banking
The path to universal banking for ICICI is strewn with obstacles. The biggest one is
overcoming the differences in regulatory requirements for a bank and a DFI. Unlike banks,
DFIs are not required to keep a portion of their deposits as cash reserves.
In the event of a merger with ICICI Bank, ICICI will have to set aside about Rs 18,000
crore as reserves. The combined entity will have a balance-sheet size of Rs 95,000 crore,
making it the second largest bank in India. ICICI's reserve requirement is perhaps not too
difficult to meet. More taxing would be the problem of priority sector loans.
About 40 per cent of a bank's lending is directed towards the priority sector. Given the size
51
of priority sector lending, it seems unlikely that the merged entity, ICICI Bank, can realign
its portfolio. Instead ICICI has asked for concessions in meeting this requirement.
Cost of funds to fall
If the ICICI group's merger takes place and the merged entity ICICI Bank commences
operations, the implications will be significant. As a bank, the cost of funds will drop,
thereby allowing it to compete more effectively for short-term lending. For example, ICICI
Bank's current cost of deposits is about 7.77 per cent, while ICICI's loan funds cost is 11.41
per cent. The difference is likely to make a significant difference in the market for shorter
duration loans. However, since the borrowings of banks are generally of shorter durations,
the opportunities to lend long-term are likely to be limited.
In the case of the traditional project finance — an area where DFIs tread carefully —
becoming a bank may not make a big difference. Project finance and infrastructure finance
are generally long gestation projects and would require DFIs to borrow long-term.
Therefore, the transformation into a bank may not be of great assistance in lending long-
term.
With respect to DFIs, the cost of funds is likely to be critical when studied in the context of
the trend in sectoral disbursal of loans. ICICI, for instance, has radically altered the
composition of its disbursal in favour of medium-term and short-term loans over the last
four years.
In 1997-98, 16 per cent of ICICI's disbursals went towards corporate finance (generally
shorter duration loans such as working capital). By 2000-01, about 69 per cent of ICICI's
disbursals went to corporate finance.
The change does not appear to have been so stark in the cases of IDBI and IFCI. For both
institutions, there are signals that project finance will decline in importance. Therefore, a
significant quantum of incremental lending will be towards shorter duration lending,
thereby making the cost of funds critical to future profitability.
NPAs: The problem remains
In the last few years, the most serious problem DFIs have had to encounter is bad loans or
non-performing assets (NPAs). For DFIs, universal banking or the installation of cutting-
52
edge technology in operations are unlikely to improve the situation concerning NPAs.
The bulk of the NPAs came out of loans to commodity sectors such as steel, chemicals and
textiles in the early- and mid-1990s.
The improper use of DFI funds by project promoters, a sharp change in operating
environment and poor appraisals by DFIs combined to destroy the viability of some
projects. The NPAs of these projects have dented, in varying degrees, the balance-sheets of
the three DFIs.
ICICI seems to have suffered the least, mainly because size of its balance-sheet size, which
has grown by a compound annual growth rate of 19.25 per cent over the last four years. At
the same time, the company's gross NPAs have grown by 21 per cent. Though the gross
NPAs grew faster than the balance-sheet, the combined effect of the growth in the absolute
size of the balance-sheet and accelerated provisioning has brought down ICICI's net NPAs
to 5.2 per cent of total loan assets in 2000-01 from 6.8 per cent in 1996-97.
IDBI's gross NPAs have also grown at a worrisome speed. Between 1996-97 and 2000-01,
IDBI's gross NPAs grew by 18.10 per cent to Rs 10,879 crore.The quality of IDBI's gross
NPAs has also worsened; doubtful assets (NPAs that are over 18 months old) were 69 per
cent of gross NPAs in 2000-01 against 39 per cent of gross NPAs in 1996-97.
IDBI's balance-sheet grew at 9.28 per cent over the last four years to stand at Rs 71,783
crore in March 2001, noticeably slower than that of ICICI. The slower growth in its
balance-sheet has left IDBI with a bigger dent on account of NPAs.
IFCI is the worst hit among the DFIs. Over 90 per cent of its outstanding loans are in
project finance, and to compound matters, the disbursal of loans has declined over the last
three years. Mounting NPAs in the backdrop of a shrinking balance-sheet led to gross NPAs
of about 21 per cent of IFCI's March 2001 balance-sheet.
As the RBI Governor, Mr Bimal Jalan, suggested, universal banking will not solve the NPA
problem. If commodity sectors are the baggage of the past, the growing problems in power
sector loans may compound the NPA problem.
At the moment, it would appear that the IDBI is likely to be the worst hit considering the
negative developments at the Dabhol Power Company (DPC). IDBI's total exposure to the
project is believed to be about Rs 2,500 crore, and if a solution is not found soon the
53
implications will prove disastrous for all the DFIs.
Keeping aside the grey areas that accompany the move to universal banks, DFIs seeking a
merger with a commercial bank makes sense. While the move may not solve the NPA
problem, it may mitigate the problem of competing in a market that has players with a
significantly lower cost of funds.
Moving on to the equity market, the situation does not look bright. There is the possibility
that all three DFI stocks may move up a notch if equities firm up.But when looked at
individually, there seems little to attract the prudent investor. The DFIs are not a good
investment opportunity at the moment.
54
STRATEGIES OF VARIOUS BANKS EMERGING AS UNIVERSAL BANK
To meet the various needs of different people, every bank has extended its services and has
proved to be universal bank. A universal bank is a bank where every problem of a customer
is solved under one roof. The bank has diversified its activities. The scope of banking has
widened. So every bank has started providing different facilities to its customers to have an
edge over another bank. In India, every bank is giving facilities like investments, loans
besides savings. So they have proved to be a boon for a common man. The different banks
in India are:
ICICI BANK
IDBI BANK
UTI BANK
BANK OF BARODA
BANK OF MAHARASHTRA
PUNJAB NATIONAL BANK
CENTURION BANK OF PUNJAB
JAMMU & KASHMIR BANK
CITI BANK
HDFC BANK
ABN AMRO BANK
STATE BANK OF INDIA
CENTRAL BANK
BANK OF INDIA
55
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A truly world class service as ICICI bank cards have both national and international acceptance.
Secure, Reliable, Convenient!!!
Convenience has always been synonymous with ICICI Bank and keeping in line we offer the facility of buying Insurance policies online.
Banking at your fingertips!!!
Why be inline when you can be online for paying your utility bills, mobile bills, prepaid recharge codes, Shopping, Credit card, insurance premium and lots more.
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PERSONAL BANKING NRI SERVICES DEPOSITS MONEY TRANSFERLOANS BANK ACCOUNTSINVESTMENTS INVESTMENTSCARDS PROPERTY SOLUTIONSINSURANCE INSURANCEDEMAT SERVICES LOANSONLINE SERVICES
CORPORATE BANKING MOBILE BANKING-CORPORATE NET BANKING -BANK ACCOUNTS-CASH MANAGEMENT -CREDIT CARDS-TRADE SERVICES -DEMAT-TRADEWAY -LOANS-FOREX ONLINE-SME SERVICES
PRIVATE BANKING-ASSET PRODUCTS-BANKING-CREDIT CARDS-DEBIT CARDS-DEPOSITORY SERVICES-EXCLUSIVE PHONE BANKING
PUNJAB NATIONAL BANK
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Established in 1895 at Lahore, undivided India, Punjab National Bank (PNB) has the
distinction of being the first Indian bank to have been started solely with Indian capital. The
bank was nationalized in July 1969 along with 13 other banks. From its modest beginning,
the bank has grown in size and stature to become a front-line banking institution in India at
present.
Quality Policy
To effectively meet customers' requirements and endeavor to achieve total customer satisfaction.
To gain consistent faith and confidence of customers and potential customers regarding the quality of services rendered.
To pursue excellence through continuous improvement in all areas and to distinguish ourselves by the quality of our services.
To achieve operational efficiency by attaining better productivity and profitability.
To work and act in such a manner that all services rendered in due course of banking lead to excellence and improved credibility and image of the Bank.
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PRODUCTS AND SERVICES OF PUNJAB NATIONAL BANK
PERSONAL BANKING
MY PLACE NRI BANKING ANYWHERE
WOMENSALARIED STAFFSTUDENTSFARMERSSENIOR CITIZENSBANKINGPROFESSIONALSARMY PERSONNEL/ EX-SERVICEMENNRIs/
NRI A/CsINTEREST RATESFOREIGN OFFICESOFFSHORE UNITNRIs IN UAE FACILITIES FOR
RESIDENTSMONEY TRANSFER
SERVICE
CENTRALISED BANKING ATM SERVICE12-HOUR BANKINGREMOTE ACCESSBRANCHES LOCATORFACILITIES LOCATOR
SERVICES
-LOCKER FACILITIES -DEPOSITORY SERVICES -GOVT. DEPOSIT -RTGS/NEFT/SFMS- -CREDIT CARD SCHEMES PNB Insta Remit -EFT -ECS-ISSUE OF DRAFTS & -IMMEDIATE CREDIT -PNB RUPEE CASH ORDER OF COLLECTION Traveler’s CHEQUES Cheque
CORPORATE BANKING
LOAN AGAINST FUTURE LEASE RENTALS EXIM FINANCE CASH MANAGEMENT SERVICES SSI SECTOR GOLD CARD SCHEME FOR EXPORTERS
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BANK OF BARODA
It has been a long and eventful journey of almost a century across 21 countries. Starting in
1908 from a small building in Baroda to its new hi-rise and hi-tech Baroda Corporate
Centre in Mumbai, is a saga of vision, enterprise, financial prudence and corporate
governance.
Our mission statement
To be a top ranking National Bank of International Standards committed to augmenting
stake holders' value through concern, care and competence.
It all started with a visionary Maharaja's uncanny foresight into the future of trade and
enterprising in his country. On 20th July 1908, under the Companies Act of 1897, and with
a paid up capital of Rs 10 Lacs started the legend that has now translated into a strong,
trustworthy financial body, THE BANK OF BARODA.
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PERSONAL BANKING
DEPOSITS RETAIL LOANS SERVICES-FIXED DEPOSIT HOUSING LOAN MULTI CITY-CURRENT DEPOSIT HOUSING LOAN TO CHEQUE-SAVINGS DEPOSIT NRIs/PIOs BARODA MONEY HOME IMPROVEMENT EXPRESS LOAN COLLECTIONCREDIT CARDS EDUCATION LOAN SERVICES CAR LOAN ECSDEBIT CARDS TWO WHEELER GOVT. BUSINESS LOAN INTERNET/MOBILE CONSUMER DURABLE BANKING LOAN BILL PAYMENT PERSONAL LOAN SENIOR CITIZENS DESH VIDESH YATRA LOCKERS LOAN MARRIAGE LOAN FESTIVAL LOAN
ADVANCE AGAINSTSECURIRIES
ADVANCE AGAINST PROPERTY
LOAN TO PENSIONERS PROFESSIONAL LOAN
LOAN TO DOCTORS TRADER LOAN
LOAN PUBLIC ISSUES/IPOs
BUSINESS BANKING
DEPOSITS LOANS & ADVANCES SERVICESFIXED DEPOSIT WORKING CAPITAL DEBIT CARDSCURRENT DEPOSITS FINANCE ECS TERM FINANCE COLLECTION SERVICES SSI MULTI CITY CHEQUE SME GOLD CARD BOB MONEY EXPRESS SMALL BUSINESS/ LOCKERS BORROWERS TRADERS LOAN
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CORPORATE BANKING
DEPOSITS LOANS & ADVANCES NON FUND BASED SERVICES-FIXED DEPOSIT -WORKING CAPITAL -CURRENT DEPOSITS FINANCE -LINE OF CREDIT -EXPORT FINANCE -BILL FINANCE -FCNR LOANS -BRIDGE LOANS -ADVANCE AGAINST SHARES -LOAN AGAINST RENT RECEIVABLES -TERM FINANCE -SHORT TERM CORPORATE LOAN -LOANS TO SMALL AND MEDIUM ENTERPRISE -TAKEOVER OF A/Cs
INTERNATIONAL SERVICES VALUE ADDED SERVICES -BARODA INTERNET/NRI SERVICES: MOBILE BANKING -BARODA OMNI -REMITTANCE FACILITIES -BARODA REMIT -PRODUCTS & SERVICES EXPRESS-HOW TO OPEN DEPOSIT ACCOUNTS -MONEY TRANSFER-TAXATION SERVICE SCHEME-FACILITIES TO RETURNING INDIANS -MULTI CITY CHEQUE
FGN CURRENCY CREDITSECBFCNR LOANS OFFSHORE BANKINGEXPORT FINANCEIMPORT FINANCECORRESPONDENT BANKINGTRADE FINANCEINSTITUTIONAL TREASURY
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TREASURY-DOMESTIC OPERATION-FOREX OPERATION
RURAL
DEPOSITS:-FIXED DEPOSITS-CURRENT DEPOSITS-SAVING DEPOSITS
SERVICES:-REMITTANCES-COLLECTION SERVICES-PENSION
LOCKERSPRIORITY SECTOR ADVANCES-AGRICULTURE-SSI-SMALL BUSINESSES-RETAIL LOAN-GOVT SPONSORED SCHEMES-BARODA GENERAL CREDIT CARD SCHEME
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CENTURIONBANK OF PUNJAB
Centurion Bank of Punjab is a new generation private sector bank offering a wide spectrum
of retail, SME and corporate banking products and services. It has been among the earliest
banks to offer a technology-enabled customer interface that provides easy access and
superior customer service.
Centurion Bank of Punjab has a nationwide reach through its network of 241 branches and
389 ATMs. The bank aims to serve all the banking and financial needs of its customers
through multiple delivery channels, each of which is supported by state-of-the-art
technology architecture.
Centurion Bank of Punjab was formed by the merger of Centurion Bank and Bank of
Punjab, both of which had strong retail franchises in their respective markets.
FOREIGN EXCHANGE:
Centurion Bank of Punjab offers a one-stop shop for a traveller's foreign exchange needs.
We have dedicated foreign exchange staff that is drawn from the very best in the industry
and specially trained to offer highest standards in service.
Many branches of the Bank offer dedicated forex bureaus that offer travel related foreign
exchange services from special counters that offer service beyond banking hours.
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Personal Banking Savings Bank AccountCurrent AccountFixed Deposits Global Debit CardVisa Money TransferPremium Pay Internet BankingMobile Refill
Retail LoansTwo Wheeler LoansPersonal LoansProperty LoansCommercial VehicleConstruction Equip.Auto LoansAgriculture Loans Education Loans
Wealth Management InsuranceMutual FundsPortfolio TrackerEquityFixed Income ProductsIPO Buzz
Corporate Banking Corporate and SMETreasuryFIG Group Channel Finance Trade Finance
ForexServices Offered LocationBecome a PartnerBuy Forex OnlineTodays Rates
NRI Services Foreign Currency DepositsSavings / Current AccountTerm Deposits Welcome AboardCorrespondent BanksFeatures at Glance
DematOverview
How to Avail ?BenefitsTariff
Cash Management Collection ServicesPayment Services
Senior Citizens Interest Rates ePay SolutionsHow it Works?Functionality
Bill PayList of BillersFAQ'sBillPay Login
Gift Card SMS Alerts
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IDBI BANK
IDBI Ltd. is committed to creating long term economic value for all its stakeholders,
including shareholders, depositors, customers, employees and the society as a whole.
IDBI Ltd. is committed to maintaining high standards of ethical and professional
conduct in all its corporate activities.
Vision Statement
"To be trusted partner in progress by leveraging quality human capital and setting global standards of excellence to build the most valued financial conglomerate"
PERSONAL BANKING
DEPOSITS LOANS PAYMENTSSAVING ACCOUNT HOME LOANS TAX PAYMENTCURRENT ACCOUNT LOANS AGAINST STAMP DUTY HOME PAYMENTFIXED DEPOSITS PERSONAL LOAN EASY FILLPENSION ACCOUNT IPO FINANCE CARD TO CARDSABKA ACCOUNT LOAN AGAINST MONEY TRANSFER SECURITY ONLINE PAYMENTS
INVESTMENTS INSURANCE DEMAT ACCOUNT FAMILY INVEST SERVICES CAR LIFE INSURANCE
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PREFFERED BANKING-RELATIONSHIP BANKING-ASSET PRODUCTS
NRI SERVICES
INSTITUTIONAL BANKING-INSTITUTIONAL SAVING ACCOUNT-CORPORATE PAYROLL ACCOUNT-CITIZEN IDBI BANK
CORPORATE PRODUCTS TREASURY PRODUCTS -DEPOSIT PRODUCTS -FOREX -LOAN & ADVANCES -MONEY MARKET -TRADE FINANCE -CAPITAL MARKET -INTERNET BANKING -CASH MANAGEMENT SERVICES
24-HOUR BANKING CARDS -PHONE BANKING -GOLD DEBIT CARD -SMS BANKING -INTERNATIONAL DEBIT CUM ATM CARD -ACCOUNT ALERTS -GIFT CARD -INTERNET BANKING -WORLD CURRENCY CARD
CORPORATE BANKING-PROJECT FINANCE-FIRM FINANCING-CORPORATE LOAN-DIRECT DISCOUNTING-TUFS(TECHNOLOGY UPGRADATION FUND SCHEME)-REFINANCE-BILLS REDISCOUNTING-REHABILITATION FINANCE-COMMERCIAL PRODUCTS-TREASURY PRODUCTS
OTHER PRODUCTS:
-LOCKERS-INDIA POST CITIZEN IDBI BANK
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The Jammu & Kashmir Bank is today one of the fastest growing banks in India with a
network of more than 500 branches/offices spread across the country offering world class
banking products/services to its customers. Today, the Bank has a status of value driven
organization and is always working towards building trust with Shareholders, Employees,
Customers, Borrowers, Regulators and other diverse Stakeholders, for which it has adopted
a strategy directed to developing a sound foundation of relationship and trust aimed at
achieving excellence, which of course, comes from the womb of good Corporate
Governance. Good Governance is a source of competitive advantage and a critical input for
achieving excellence in all pursuits.
DEPOSIT SCHEMES LOAN SCHEMES INSURANCE SERVICES -TERM DEPOSITS -CONSUMER LOAN -GENERAL INSURANCE -SAVING BANK -HOUSING LOAN -LIFE INSURANCEDEPOSITS -CAR LOAN-VALUE ADDED -EDUCATIONAL LOANSCHEMES -PERSONAL CONSUMPTION-GIFT CHEQUE LOANSCHEME -LOAN AGAINST MORTGAGE-LOAN AGAINST SHARES/NRI SERVICES BONDS-MORTGAGE LOAN FORCARDS TRADE
DEPOSITORY SERVICES
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BANK OF INDIA
Bank of India was founded on 7th September, 1906 by a group of eminent businessmen
from Mumbai. The Bank was under private ownership and control till July 1969 when it
was nationalized along with 13 other banks.
Beginning with one office in Mumbai, with a paid-up capital of Rs.50 lakh and 50
employees, the Bank has made a rapid growth over the years and blossomed into a mighty
institution with a strong national presence and sizable international operations. In business
volume, the Bank occupies a premier position among the nationalized banks.
The Bank has 2613branches in India spread over all states/ union territories including 93
specialized branches. These branches are controlled through 48 Zonal Offices. There are 23
branches/ offices (including three representative offices) abroad.
The Bank came out with its maiden public issue in 1997. Total number of shareholders as
on 31/03/2006 is 2,38,708.
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PRODUCT & SERVICES
CREDIT SCHEME DEPOSIT SCHEME-PERSONAL LOAN -TERM DEPOSIT SCHEME-BULLION BANKING -NRI DEPOSIT SCHEME-KISAN CREDIT CARD -NRI YIELD ENHANCING SCHEME -BILL FINANCE -BOI SAVING PLUS SCHEME-BANK GUARANTEE -BOI CURRENT DEPOSIT PLUS -EXPORT FINANCE SCHEME-INTEREST RATES -FOREIGN CURRENCY DEPOSIT-BOI MEDI MOBILE SCHEME SCHEME RATES-CHANNEL CREDIT -SPECIAL DEPOSIT PRODUCTS-CORPORATE LOAN -BOI FLOATING DEPOSIT SCHEME -DISCOUNTING OF FUTURE -STAR GOLD/DIAMOND CURRENT CASH FLOWS ACCOUNT-FOREIGN CURRENCY SWING -BASIC SAVING ACCOUNT LINKS
SERVICES INTERNET BANKING-STAR INSTA REMIT -STAR CONNECT (CUSTOMER OF-STAR CASH MANAGEMENT MBB BRANCHES) SERVICES -STAR CONNECT (CUSTOMER OF -DEPOSITORY SERVICES NRI BRANCHES)-SAFE DEPOSITS VAULT -STAR CONNECT RETAIL (FOR-SAFE CUSTODY SERVICES CORE BANKING BRANCHES)-TECHNOLOGY PRODUCTS/ -STAR CONNECT CORPORATE SERVICES (FOR CORE BANKING BRANCHES)-GOVT RELIEF BONDS-MULTI CITY CHEQUE FACILITY
CALCULATOR NRI SERVICES-DEPOSIT CALCULATOR -STAR CONNECT (INTERNET -EMI CALCULATOR BANKING FOR NRI BRANCHES) -NRI DEPOSIT SCHEMES -NRI YIELD ENHANCING SCHEME -FOREIGN CURRENCY DEPOSIT SCHEME RATES
CARD PRODUCTS:-DEBIT CARD-CREDIT CARD
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UTI Bank was the first of the new private banks to have begun operations in 1994, after the
Government of India allowed new private banks to be established. The Bank was promoted
jointly by the Administrator of the specified undertaking of the Unit Trust of India (UTI - I),
Life Insurance Corporation of India (LIC) and General Insurance Corporation Ltd. and its
associates viz. National Insurance Company Ltd., The New India Assurance Company, The
Oriental Insurance Corporation and United Insurance Company Ltd.
The Bank today is capitalized to the extent of Rs. 278.62 Crores with the public holding
(other than promoters) at 72.27%.
The Bank's Registered Office is at Ahmedabad and its Central Office is located at Mumbai.
Presently the Bank has a very wide network of more than 420 branch offices and Extension
Counters. The Bank has a network of over 1841 ATMs providing 24hrs a day banking
convenience to its customers. This is one of the largest ATM networks in the country.
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Products & Services
Consumer Banking NRIs Corporate Banking
Savings Account Our Offering Current Account
Current Account Documentation CMS
Fixed Deposits Remittances Advisory Services
Recurring Deposits Internet banking Fixed Deposits
Lockers NRI Loans Lending / Financing
Debit CardPortfolio Investment Scheme
Salary Power
Power 24Our Correspondent Banks
Merchant Banking
Encash 24Tax and Advisory Services
India News
Retail Loans Treasury Capital Markets
Power Drive Foreign Exchange Desk Depository Services
Power Home International Banking Debenture Trusteeship
Personal Power Money Market Desk Clearing Bank for NSE / BSE / OTCEI
Loans against Securities Constituent SGL Facility Clearing Members for Derivatives Segment
Consumer Power Retail Gsec Broker Financing
Study Power Deposit Rate Issue Management
Interest Rate Charts Newsletter M&A Advisory
Live G-Sec Quotes IPO Funding
RBI Bonds
Mutual Funds
E-Broking
Financial Advisory Services
Calculators FAQ's
Our Offering Auto Loans Auto Loans
Mutual Funds Home Loans
Insurance Personal Loans
Equity Consumer Loans
Tax Consultancy Retirement Planners
Real Estate Investment Planners
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Fixed Income Products Tax Planners
Portfolio Tracker Budgeting
Planning Tools Fixed Income & Bonds
IPO Buzz
HDFC BANK
The Housing Development Finance Corporation Limited (HDFC) was amongst the first to
receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in
the private sector, as part of the RBI's liberalization of the Indian Banking Industry in 1994.
The bank was incorporated in August 1994 in the name of 'HDFC Bank Limited', with its
registered office in Mumbai, India. HDFC Bank commenced operations as a Scheduled
Commercial Bank in January 1995.
When you bank with us, we ensure your money is not just in safe hands; it also works to
your advantage. We help you invest wisely through our financial and investment services.
Profit from our expertise.
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LOANS
Resident Indians
Home LoansHome ImprovementHome ExtensionShort Term BridgingLand PurchaseLoans to Professionals for Non Residential Premises LoanHome Equity Loan HDFC offers special repayment facilities on its loan products
Non Resident Indians
Home LoansHome ImprovementHome ExtensionLand PurchaseAbout NRINRI FAQs
Deposits
Individual • Fixed Rate Deposits
· Monthly Income Plan· Non-Cumulative Deposits · Annual Income Plan· Cumulative Deposits · Easy Way Savings· Senior Citizen Deposits
• Variable Rate Deposits · Monthly Income Plan· Non-Cumulative Deposits · Annual Income Plan· Cumulative Deposits · WizKid Deposit Plan· Senior Citizen Deposits
• Interest Rate
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TRUSTS
FIXED RATE DEPOSITS VARIABLE RATE DEPOSITS
-MONTHLY INCOME PLAN -MONTHLY INCOME PLAN -NON CUMULATIVE DEPOSITS -NON CUMULATIVE DEPOSITS -ANNUAL INCOME PLAN -ANNUAL INCOME PLAN -CUMULATIVE DEPOSITS -CUMULATIVE DEPOSITS
INTEREST RATES
REAL ESTATE NRIs SERVICES
-E-NEWS LETTER -HOME LOANS -BUILDER -HOME IMPROVEMENT -PROPERTY RELATED SERVICES -HOME EXTENSIONS -HDFC REALTY -LAND PURCHASE
LISTING OF SECURITIES CORPORATE GOVERNANCE
-EQUITY HISTORY -FINANCIAL CALENDER AT -STOCK EXCHANGE/TRUSTEE HDFC -SHARE PRICE -COMMITTEE .BSE * AUDIT COMMITTEE .NSE * COMPENSATION COMMITTEE -STOCK MARKET DATA * INVESTOR GRIEVANCE
INTERACTIVE TOOLS
-EMI CALCULATOR -LOAN ELIGIBILITY CALCULATOR -DEPOSIT CALCULATOR
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ABN-AMRO BANK
ABN AMRO is an international bank with European roots. We have a clear focus on
consumer and commercial clients in our local markets and focus globally on select
multinational corporations and financial institutions, as well as private clients. Our business
mix gives us a competitive edge in our chosen markets and client segments.
ABN AMRO is a prominent international bank, our history going back to 1824.
ABN AMRO ranks 11th in Europe and 20th in the world based on tier 1 capital, with over
3,000 branches in more than 60 countries, a staff of about 96,000 full-time equivalents and
total assets of EUR 880.8 billion (as at 31 December 2005).
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Why ABN AMRO is ideally positioned to deliver cash, trade and card products and services
that are a cut above the rest:
Our global network brings together product experts from different locations and
from a range of client segments, enabling us to drive innovation.
We have over 175 years experience at the forefront of banking services.
Our global presence encompasses 3,000 branches across 62 countries and territories.
We have major Transaction Banking hubs in Europe, Latin America and North
America and we are investing in emerging centres like India and China.
ABN AMRO offers a range of products that meet the everyday financial needs of
individuals. We serve millions of clients around the world, with leading operations in the
Netherlands, the US Midwest (LaSalle Bank) and Brazil (Banco Real).
The wide range of financial services we offer enables us to build and expand long-term
relationships with our clients.
We can help consumer clients in the following areas:
Personal loans
Credit cards
Mortgages
Savings
Retirement planning
Education planning
Personal internet banking
Insurance
Online trading
Preferred Banking
ABN AMRO also offers a relationship-banking approach for mass-affluent customers,
professionals and business owners. Our approach is designed to meet our clients' needs for
individual recognition and fulfill their desire for a greater range of products and services,
beyond simple banking transactions.
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Private Banking
Our aim is to help clients structure, manage and enhance their wealth, making sure they
receive highly professional and confidential financial solutions.
Private clients have an assigned relationship manager who will discuss their unique
financial circumstances with them and tailor products to meet their objectives.
We can help private clients in the following areas:
Banking
Investment advisory
Discretionary portfolio management
Investment funds
International estate planning
Trust
Business and Commercial Clients
Our services can help clients finance their business, manage their cash flow, trade internationally, succeed in
e-commerce and find new opportunities.
With millions of customers around the globe and a major presence in a range of markets, we have considerable
scope for economies of scale and sharing of best practices. We have a local presence and a domestic focus on
our various markets. At the same time, the advantages we gain from the synergies between our businesses
benefit our clients.
Corporate and Institutional Clients
Our clients increasingly require a comprehensive choice of products, specialist skills and
excellence of service, both locally and globally. ABN AMRO meets these demands by
integrating corporate and investment banking services for our corporate and institutional
clients across 50 of the 60 countries where ABN AMRO is active.
This combination offers clients the best of both worlds: a full spectrum of products that give
them exactly what they need, regardless of whether they are a mid-sized company or a
world leader in their sector.
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Our aim is to be the preferred corporate and investment banking provider for global
pioneers operating across regions, including both rising champions in emerging markets and
ambitious companies in developed markets.
Transaction Banking
ABN AMRO Transaction Banking delivers cash, trade and card products and services to
corporations and businesses, financial institutions, retail customers and private clients
globally. These services are available in some 3,000 locations in over 60 countries,
including La Salle Bank in the US and Banco Real in Brazil. Underpinning this extensive
global network is integrated technology supporting billions of payment, trade and card
transactions every year. Global scale, a commitment to continuing product and service
innovation and an in-depth understanding of local and global markets are key components
of our offer.
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LOANS AND CREDITSLoans Credit Cards
• Personal Loans Premium Cards
• Home Loans - Indian Oil Citibank Gold Card
• Loan against Property - Jet Airways Citibank Gold Card
• Auto Loans - Citibank Cash Back Gold Card
• Loan against Shares - Citibank Gold Card
• Ready Credit Extra Value CardsOverdraft - Hutch Citibank Card
BANKING, INVESTMENTS -Jet Airways Citibank Silver Card
& INSURANCE - MTV Citibank Card
BANKING: - Indian Oil Citibank Card
-Citi bank account -International times card
-Suvidha account -first citizen Citibank card
-Debit card Special Interest cards
-Citi gold wealth management -CRY Citi bank card
-Citi business -WWF Citi bank card
INVESTMENTS: -Citi bank woman’s card
-mutual funds -Citi bank woman’s visa mini card
-Demat Basic cards
-Deposits -Citi bank silver card
-GOI Bonds -Citi bank cash back card
INSURANCE: -Citi bank choice card
-Life insurance solution Travel cards
-Credit shield plus suraksha -Citi bank world money card
-Insurance on ur home loans Diners
Foreign Exchange Services: -Diners club international card
-Woman’s account -TAJ epicure diners club
PRODUCTS & SERVICES
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PRODUCTS:-ATM Card -ATM/Debit Card-ATM/Debit Cards & Reward Programs at-a-glance -Basic Banking-Basic Checking -Certificates of Deposit (CD)-Checking Plus (Variable Rate) -Checking at-a-glance-CitiAssist® Graduate Law & Bar Study Loans -CitiAssist® Health Profession & Residency Loan -CitiAssist® K-12-CitiAssist® Undergraduate & Graduate Loans -CitiGold-Citibank Access Account -Citibank Everything Counts-Credit & Charge Cards at-a-glance -Credit Card-Day-to-Day Savings -Debit Card-EZ Checking-Essential Term Life Insurance through CIAI -Federal Consolidation Loan-Federal PLUS Loans -Federal Stafford Loans-Home Equity Line of Credit -Home Equity Loan-IRAs and Rollovers -Installment Loan-Investing at-a-glance -Investing with Citicorp Investment Services -Lines & Loans at-a-glance-Long Term Care through Citicorp Insurance Agency -Mortgages-Pricing Packages at-a-glance -Rollover IRA-Roth IRA -Special Relationships at-a-glance -Student Loans-Super Yield Money Market -The Citibank Account-Traditional IRA -Women & Co.®-e-Savings account
SERVICES:-ATM Reimbursements -ATM/Debit Cards & Reward Programs at-a-glance-Auto Deduct -Auto Save-Bills & Payments at-a-glance -Checking Plus (Variable Rate)-Citi® Identity Theft Solutions -CitiPhone Banking-Citibank en Español -Citibank® Global Transfers-Citicorp Investment Services Auto Invest-Citipro financial check-up -Deposits at-a-glance-Direct Deposit -E-mail & Wireless Banking Alerts-Financial Centers -Identity Monitor from Citi-Inter Institution Transfers -Linking Accounts-My Citi -Online Account Access at-a-glance-Online Bank Statements -Online Bill Payment-Online Check Images -Overdraft Protection at-a-glance-SafeWeb Online Fraud Protection -Safety Check
BANK OF MAHARASHTRA
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The Birth
Registered on 16th Sept 1935 with an authorized capital of Rs 10.00 lakh and commenced
business on 8thFeb 1936.
The Childhood
Known as a common man's bank since inception, its initial help to small units has given
birth to many of today's industrial houses. After nationalization in 1969, the bank expanded
rapidly. It now has 1292 branches (as of 30th September 2005) all over India. The Bank has
the largest network of branches by any Public sector bank in the state of Maharashtra.
The Adult
The bank has fine tuned its services to cater to the needs of the common man and
incorporated the latest technology in banking offering a variety of services.
Our Aims
The bank wishes to cater to all types of needs of the entire family, in the whole country. Its
dream is "One Family, One Bank, Maharashtra Bank".
The Autonomy
The Bank attained autonomous status in 1998. It helps in giving more and more services
with simplified procedures without intervention of Government
Savings Account, Current Account, Recurring Deposit, Fixed Deposits.
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Mahabank Yuva Yojana, Mahabank Lok Bachat Yojana, Mahabank Family Banking Card,
Quarterly Interest Deposit Scheme (QIDS), Mixie Deposit Scheme, Floating Rate Deposit
Scheme, Savings Deposit, Current Deposit, Monthly Interest Deposit Scheme (MIDS),
Fixed Deposit Scheme (FDR), Cumulative Deposit Scheme (CDR), Recurring Deposit
Scheme, Mahabank Unit Deposit Scheme, Sulabh Jama Yojana
Personal Loans, Corporate Loans, Education Loans, Adhar Scheme, Mahabank Gold Card
Scheme for Exporters
Term Loans, Overdrafts, Letters of Credit, Guarantees and many more such products are
included in the credit basket. Recognizing individual customer needs Bank of Maharashtra
has identified Customer segments.
For the individual we have finance schemes that translate your dreams into reality.
Consumer Finance Scheme Housing Finance Scheme For Individuals
For Professionals For Entrepreneurs For Corporates
Personal loans Educational Loans For Agriculturists
SSI Charter Declaration Mahabank Salary Gain Scheme
Exporters Vehicle Loan Mahabank Realty Finance
Mahabank Renewable Energy Equipments
Mahabank Eco - friendly products
Resident Foreign Currency Account, Non-Resident External (NRE) Account.
Credit Card, Locker Facility, BANCS, ATM.
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Remote Access, Query Terminal, Telebanking
METCO Tariff Card, Mahabill Pay, RTGS (Real Time Gross Settlement).
Our Trustee Company offers you the following range of trusted services.
Executor of will
Management of Private Trust
Management of Public Charitable Trusts
Management of Investments and House Properties as Attorney
Guardianship of Minors' Property
STATE BANK OF INDIA
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The origin of the State Bank of India goes back to the first decade of the nineteenth
century with the establishment of the Bank of Calcutta in Calcutta on 2 June 1806. Three
years later the bank received its charter and was re-designed as the Bank of Bengal (2
January 1809). A unique institution, it was the first joint-stock bank of British India
sponsored by the Government of Bengal. The Bank of Bombay (15 April 1840) and the
Bank of Madras (1 July 1843) followed the Bank of Bengal. These three banks remained at
the apex of modern banking in India till their amalgamation as the Imperial Bank of India
on 27 January 1921.
The State Bank of India was thus born with a new sense of social purpose aided by the 480
offices comprising branches, sub offices and three Local Head Offices inherited from the
Imperial Bank. The concept of banking as mere repositories of the community's savings and
lenders to creditworthy parties was soon to give way to the concept of purposeful banking
subserving the growing and diversified financial needs of planned economic development.
The State Bank of India was destined to act as the pacesetter in this respect and lead the
Indian banking system into the exciting field of national development.
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Personal Banking
-Deposit Schemes -Personal Finance
Services NRI Services
-Agricultural/Rural -Trade Finance -Agricultural Banking - Merchant Banking - Micro Credit - Correspondent Banking - Regional Rural Banks
CORPORATE BANKING
-Corporate Accounts
-Mid Corporate Group
-Project Finance -Products & Services
SERVICES:
* Internet Banking
*ATM Services
*Broking Services Govt. Business:
Govt. Accounts
Public Provident Fund
SBI e-Tax
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CENTRAL BANK OF INDIA
Established in 1911, Central Bank of India was the first Indian commercial bank which was wholly owned and managed by
Indians. The establishment of the Bank was the ultimate realization of the dream of Sir Sorabji Pochkhanawala, founder of the
Bank. Sir Pherozesha Mehta was the first Chairman of a truly 'Swadeshi Bank'. In fact, such was the extent of pride felt by Sir
Sorabji Pochkhanawala that he proclaimed Central Bank as the 'property of the nation and the country's asset'.
MONEY MULTIPLIER DEPOSIT CERTIFICATE (MMDC)
MONTHLY INTEREST DEPOSIT RECEIPT (MIDR)
QUARTERLY INTEREST DEPOSIT RECEIPT (QIDR)
CENT UTTAM SCHEME
CENTRAL'S SENIOR CITIZEN DEPOSIT SCHEME
CENTRAL'S FLEXI YIELD DEPOSIT SCHEME
At Central Bank we offer various loan facilities. Details for each of them can be found in the links below.
Loan PolicyCent VivahCent SafarCent JewelCent VEHICLECent BuyHousing Finance SchemeCent KalyaniCentvyapari SchemePersonal Loan Scheme(Corporate)Personal Loan Scheme(Noncorporate)Cent RentalsCent Mortgage
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Cent Trade Cent Computer LoanLoans to Pensioners Drawing PensionCentVidyarthiCentral Kisan Credit CardCent MultipurposeCent Liquid SchemePersonal Loan To Teachers
CENTRAL CARD ELECTRONIC
CENTRAL CARD
DEBIT CARD
TRAVELLER'S CHEQUES
GIFT CHEQUES
CASH MANAGEMENT SERVICES
CENT BILLPAY
'Andhra Bank was founded by Dr.Bhogaraju Pattabhi Sitaramayya. The Bank was
registered on 20th November 1923 and commenced business on 28th November 1923 with
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a paid up capital of Rs 1.00 lakh and an authorised capital of Rs 10.00 lakhs. The Bank's
Total Business as on date stood at over Rs.52046 Crores with a Clientele base over 1.42
Crores. The Bank is rendering services through 1723 Business Delivery Channels spread
over 21 States and 2 Union Territories as at the end of December2005. The Bank has
entered into Sharing Arrangements with State Bank of India, HDFC Bank, IDBI Bank,
Indian Bank and UTI Bank, offering over 9,000 ATMs spread across the Country for use by
Customers. Instant Funds Transfer Facility is provided through Branches. All the Branches
computerized, 890 branches networked under core banking solution providing
"ANYWHERE BANKING".
Technology Products:
-Multi City Check Facility -On-Line Tax Accounting System (OLTAS)
-Real Time Gross Settlement (RTGS) -Instant Fund Transfer (IFT List)
-ATM Services -Any Branch Banking
- Electronic Fund Transfer (EFT) -Electronic Clearing Service (ECS)
NRI Banking:
-NRI Products and Services -NOSTRO details for remittance
- Western Union Money Transfer
Corporate Banking:
-Working Capital Loans -Export & Import Finance
-Bill Finance -Sub BMPLR Finance
-Foreign Currency Loans -Advance against Shares
-Advance against Rent Receivables -Advance to Real Estate Developers
-Term Finance -Bridge Loans
-Corporate Loans -Project Finance
-Infrastructure Project Finance -Takeover Accounts
Agriculture Loans:
-AB Pattabhi Agricard -AB Kisan Chakra
- AB Rural Godowns -AB Agri Clinics/Agro Service Centers
-AB Kisan Sampathi -AB Kisan Bandhu
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- Tractor Financing -AB Self Help Groups
-Bank Linkage Programme -AB Andhra Bank Kisan Green Card
-AB Surya Sakthi -AB Solar Cookers
Other Schemes
-AB Finance Purchase of Land for Agri Purpose
-AB For Financing To Dairy Agents
Retail Loans:
-AB Housing Loans -AB Dr. Pattabhi Vidya Jyothi
-AB Vanitha Vahan -AB Personal Loan
-AB Vehicle Loans -AB Clean Loans
-AB Mortagage Loans
AB Other Scheme
-AB Advance Against Rentals Receivables
Deposit Schemes:
AB Savings Accounts:
-AB Easy Savings (No-frills account) -AB Abhaya SB A/c
-AB Abhaya Gold SB A/c -AB Kids Kazhana
-AB Jeevan Abhaya Scheme -AB Freedom Savings Account
AB Current Account:
-AB Insurance Linked Current A/c
AB Term Deposits:
-AB Fixed Deposits -AB Kalpataruvu Deposits
-AB Recurring Deposits -AB Jeevan Prakash
-AB Jeevan Prakash Plus
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Dena Bank, in July 1969 along with 13 other major banks was nationalized and is now a
Public Sector Bank constituted under the Banking Companies (Acquisition & Transfer of
Undertakings) Act, 1970. Under the provisions of the Banking Regulations Act 1949, in
addition to the business of banking, the Bank can undertake other business as specified in
Section 6 of the Banking Regulations Act, 1949.
MissionDena bank will provide its
Customers - premier financial services of great value, Staff - positive work environment and opportunity for
growth and achievement,Shareholders - superior financial returns,
Community - economic growth
VisionDENA BANK will emerge as the
most preferred Bank of customer choiceIn its area of operations, by itsreputation and performance
Personal Banking
Deposit Schemes -Dena Savifix -Dena Samruddhi -Dena Freedom Deposit Loan Schemes -Dena Niwas -Dena Vidya Laxmi -Dena Auto Finance -Dena Mortgage
Services
Any Branch Banking Multi-City Cheque Facility
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Internet Banking Dena ATM Dena Cards Dena BillPay Mobile banking Telebanking Bancassurance Inbound Remittances Direct tax collection
» Priority & SME
Agriculture
Dena Kisan Gold Credit Card Scheme
Regional Rural Banks
SME
Specialized SSI Branches
Products & Services
Technology Upgradation Fund for Textile Industry
Credit Linked Capital Subsidy Scheme
National Equity Fund
Dena Laghu Udhyami Credit Card
Dena Artisan Credit card
Credit Guarantee Fund Trust for Small Industries
Interest Rates on SSI
Dena Rural Internet Kiosk Finance Scheme
Dena Shakti
DRDF (Dena RUDSETI)
Dena Swachchh Gram Yojana
Dena Paryavaran Suraksha Yojana
SME ANNOUNCEMENT
» Corporate
Specific Schemes
Educational Institutions
Builders & Developers
Hospitals
Hotels & Restaurants
ANALYSIS & INTERPRETATION
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Banking is leading industry in Indian market. All of this requires successful banks to take a
radical approach to strategic planning. The pressures outlined earlier have major potential
implications for the type of business conducted by banks and the way business is conducted.
This was the major implication noted earlier of the pressures operating on the banking
industry. New analysis and perceptions may be needed about: the nature of the industry; the
position and business of the banking firm; the way that banks provide their services; and the
range of services offered. In particular, there is a need to distinguish between the
fundamentals of banking: what banks actually do; and the way they do it. The starting point
is to identify the fundamentals, or core competencies, of the banking firm, that is, what
gives banks competitive advantage.
The fundamentals of banking are essentially:
• Information advantages;
• Risk-analysis expertise;
• monitoring of borrowers and enforcement of loan contracts;
• Broking potential (bringing various counterparties together);
• Delivery capacity; and
• acting as the core of the payments system which acts as the first point of contact with
customers.
Banks’ overwhelming advantage is the information they have on their customer base which
is obtained through economies of scale, investment in information systems and expertise,
and economies of scope or synergies. By managing a customer’s account, and through the
bank’s continuous monitoring of customers, a bank necessarily acquires information that
can be used in various ways. Information gained through one part of the business operation
can be used in others. Banks are essentially in the ‘information business’. In this regard,
banks need to focus on two elements: the gathering, storing and retrieval of data, and the
transformation of that data into usable information. Banks have a great deal of data but there
is also enormous potential to transform this into valuable information. These six elements
are the banks’ core competencies. In essence, banks have traditionally used their
comparative advantages to specialize in the provision, holding and monitoring of loans that
are not readily marketable. However, they can be used in a variety of ways. Thus,
information advantages can be used by a bank to make loans,
underwrite capital market issues of their customers, conduct broking operations, and can be
used as a basis for cross-selling a variety of products and services. the question of what is
the fundamental business of banks is different from the question of what banks do. The
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theme is that individual banks need to identify their core competencies, as they will differ
from one bank to another. This is the necessary starting point in strategic planning
exercises. The above are likely to remain the core competencies of banking firms, even if in
some areas they have become less powerful. While the core competencies may be
permanent and enduring, how banks exploit them changes over time and, at any point in
time, is influenced by a combination of:
• Current technology;
• Regulation;
• The power of entry barriers;
• Competition; and
• The strategic objectives of potential new competitors.
The successful development of corporate strategy is ultimately a question of defining
comparative advantages, and developing alternative ways of exploiting such advantages.
Thus, while banks may continue to have information advantages with respect to their
customers, this does not necessarily mean they are only to be exploited in the form of
making loans and/or holding loans on the balance sheet. Information advantages can be
exploited in many other ways such as servicing the capital market. While banks may lose
market share in some of their traditional markets, they will gain and develop other business
and use their core competencies in different ways.
They should retain powerful core competencies and these can be exploited in new
ways and in different markets, thus limiting the extent of any secular decline. However, this
may require a radical review of what business banks are in, and how core competencies can
be exploited for competitive advantage. It may also require a restructuring of the banking
firm.
These might be the reasons why banks have transformed into UNIVERSAL BANKS
upto a large extent.
CONCLUSION
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The principle of "Universal Banking" is a desirable goal and some progress has already
been made by permitting banks to diversify into investments and long-term financing and
the DFIs to lend for working capital, etc. However, banks have certain special
characteristics and as such any dilution of RBI's prudential and supervisory norms for
conduct of banking business would be inadvisable. Further, any conglomerate, in which a
bank is present, should be subject to a consolidated approach to supervision and
regulation.
These are the factors which forces a bank to be a UNIVERSAL BANK.
• current technology;
• regulation;
• changing needs of customers;
• competition; and
• the strategic objectives of potential new competitors
Today the technology needs and demands of the people demand from a bank the solution to all of their problems under one roof. That is why banking is emerging into UNIVERSAL BANKING.
SIGNIFICANCE OF THE
STUDY97
This study shows what UNIVERSAL BANKING is.
This reveals that banks have started providing customized products to meet the
consumer needs and stand above others in cut-throat competition.
The various strategies adopted by different banks, their investment patterns,
their loans strategies make them UNIVERSAL in nature.
It shows that in even banking its not all about selling the product, Its all about
selling yourself.
It shows the factors which are responsible for convergence of banking into
UNIVERSAL BANKING.
By this study one can analyze that diversification of customer needs,
competition, various liberal policies are the forces behind a bank changed into
a UNIVERSAL BANK.
BIBLIOGRAPHY
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www.google.com , SEARCH ENGINE
www.altavista.com , SEARCH ENGINE
INDIA TODAY
BUSINESS TODAY
ECONOMIC TIMES
WEB SITES OF DIFFERENT BANKS
RESEARCH METHODOLOGY By C.R.KOTHARI
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