What is bank
Bank is a financial institute. Their primary objective is making profit.They collect deposit from the public and lend money to business firms, traders ,farmers and consumers. For the purpose of consumption and investment to make profit and they give other related services.
Characteristic/ feature of the bank
๐Dealing in money
๐Accepting of deposit
๐Giving advance
๐Payment and withdrawal
๐Agency and utility services
๐Profit and service orientation
Relation between banker and customer
Relationship as debtor and creditor :-
on the opening of an account, the banker assume the position of debtor. A depositor remain a creditor of his banker so long as his account carries credit balance.
Relationship between the banker and customer is reversed as soon as the customer account is overdrawn. Banker become a creditor of the customer who has taken a loan from the banker and continue in the capacity fails the loan of re paid.
Banker as a trustee:-
ordinary a banker is a debtor of the his customer. But in certain circumstances, he act as trustee also. If the customer deposit security, documents and other value with the banker for safe custody. Then the banker act as a trustee and the customer is beneficiary
Banker as an agent:-
banker act as an agent of his customer and perform a number of agency function for the convenience of his customer for example he buy or sell securities on the behalf of customers , collect cheque on his behalf and make payment of various due of his customer.
Relationship of advisor and client:-
when a customer invest in security the banker act as advisor and the advice can be given official or unofficial while giving the advice the banker has to take maximum care and caution here the banker is an advisor and the customer is a client.
Relationship of lessor and lessee:- similarly when a customer hires safe deposit locker from Bank, the relation between the bank and the customer is lessor or lassee. The bank is the lessor (licensor) and the hires safe deposit locker the lessee ( licensse)
Origin of banking sector
The banking system is the heart of all economic activity of the country and small change in its regulation affect the entire economy
History of the banking sector reform
The banking System in India can be categorised in two phases
1. Pre Independence phase (1786-1947)
2. post independence phase (1947 – till date)
Pre independence phase
๐Modern banking in India started back to 1786 with the establishment of general Bank of India
๐Three Presidency bank bank of Bengal, bank of Bombay and Bank of Madras establishment under character of British East India company
๐In 1935 the presidency Bank merge together and form a new bank name Imperial Bank of India
๐In 1955 the Imperial Bank of India was nationalized and name the State Bank of India
๐ first Indian owner Allahabad Bank was set up in 1865 in Allahabad
๐ Many more commercial banks such as Punjab National Bank Canara Bank Indian Bank Central Bank of India Bank of Baroda was established between 1894 and 1913 under Indian ownership
๐ central bank of the India RBI established in 1935 on the Recommendation of Hilton young commission
๐At the time the banking system was only cover the Urban population rural and Agriculture sector was totally neglected
Post independence 1947 to till
๐ the time of the Independence the entire banking sector was under the private ownership.the rural population of the country had to dependent on small money lenders for their requirement. to solve this issue and better development of the economy the Government of the India nationalized the RBI in 1949
๐In 1969 the Government of India nationalized 14 major banks whose National deposit were more than 50 crores
Nationalised banks
Allahabad Bank
Punjab National Bank
Bank of Baroda
Indian Bank
Canara Bank
Bank of Maharashtra
Central Bank of India
Union Bank of India
Dena Bank
Indian overseas Bank
Syndicate Bank
United Bank
UCO Bank
Bank of India
Reasons behind the banking sector reform in India
The Indian economy witnessed a Series difficulties like a uncertain Political situation ,fiscal imbalance, double-digit influence and the balance of payment crisis
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