Overview and History of the Banking Industry in India

Overview of the Industry:


In India, banking contains a detailed and extended history of about 200 years. After the first bank of the country i.e. Bank of Bengal was launched, the industry’s foundation can be traced back to 1786. However in 1969, by following the nationalization of banks the industry has changed significantly and quickly. Therefore, a vast growth and several positive changes were experienced by the public sector banks. In order to explore the opportunities of new business, the economic reforms and liberalization permitted the banks to do this and from mere lending and borrowing it has not just remain forced to produce revenues. Hence, to get improved with time continuously, the scenario of Indian banking was offered with a significant facelift. But, in the country till today, the nationalized banks are persisted to be the largest lenders, in spite of the foreign banks voyage. This is mainly because of the diffusion of networks and the banks size. The system of Indian banking can be categorized as specialized banking institutions, private banks and nationalized banks.

With banking units of about 30, the industry is divided extremely contributing to approximately 60% of advances and 50% of deposits. In the financial sector of India, one of the leading monitoring bodies is the Reverse Bank of India. It acts as a centralized body in the system, so as to examine the limitations and inconsistencies. Through the estimation of industry it has been specified that, beyond 274 commercial banks that are working in the country, 51 are in the private sector and 223 are in the public sector. 24 foreign banks have been incorporated by these private sector banks, where these foreign banks had started their processes here. From the division of nationalized banks group, the institutions of specialized banking include rural banks, cooperatives, etc.  


In the present job market, one of the most beneficial options that are considered is the banking sector. An arrangement in Forex or Treasury is being regarded to be accurate on the top of the industry and hence this is pursued as a result of the careers in retail banking, investment banking and private banking. In the industry of banking, one can work in different areas which includes banking officer, loan officer, personal loan officer, home loan agent, mortgage loan underwriter, accountant, customer service executive, recurring deposit account, probationary officer, assessor, home loan officer, loan manager, loan processing officer, and sales executive and product marketing between others.       

Fewer significant jobs in the Financial Services basically comprise of a person called stockbroker who sells and buys securities for some commission on behalf of institutions and individuals. Some brokers work for institutions whereas the others desire to put into practice through individual clients. Those brokers who often work for the investors of an institution are named as security traders.

Most of them wish to work as securities analysts, advisors and dealers. Since the security analysts are estimated to include capital market’s sound knowledge, they provide advice to the companies regarding the shares floatation. For the Financial service sector, the investment analysts are regarded as the backbone. They evaluate different statistical information, compare financial results, profitability projections, examine the whole industry depending on the foundation of information available, study the company’s financial reports, and at last terminate to the result. Same like investment analysts, the equity analysts perform jobs and make calculations and also investigates the equity markets. 


In private banks, the boundary for foreign direct investment has been improved to 74% from 49%. Moreover, in private banks for foreign institutional investment the limit is only up to 49%. Within the banking sector and other fragments of financial sector like non banking finance companies, capital markets, mutual funds, venture capitalists, post offices, and etc, a challenging environment has been produced by globalization and liberalization. To their offerings the markets and research has declared the accumulation of “Indian Retail Banking” in 2006. In the Country, the credit growth has been predefined continuously by Indian Retail Banking. To handle Rs. 3,538 billion, the credit growth has been enormously increasing to 44.4% in the year 2005-06.

In spite of, growth in risk weight by means of RBI, there was an additional increase for real estate and housing loans in August, 2005. During the year 2005-06, among the entire retail loans housing that represents more than 52% will develop a strong rate of about 44.35%. To plan future strategies and to recognize the competition and market the Indian banks are being helped, by coming out through an industry approach on Indian Retail Banking. In India the segments of retail banking market has been analyzed, and along with challenges and issues the key trends were also obtained. In the strategies of retail banking space and among itself, 21 major players were being reported. The growth of finance market is decreasing due to the out breakable measures of Reserve Bank of India (RBI).  

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