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| − | |colspan="0"|<div style="font-size:100%">
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| − | This article has been sourced from an authoritative, official <br/>publication. Therefore, it has been ‘locked’ and will never be <br/> thrown open to readers to edit or comment on.<br/>
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| − |
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| − | After the formal launch of their online archival encyclopædia, <br/> readers who wish to update or add further details can do so on <br/> a ‘Part II’ of this article. </div>
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| − | |}
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| − | [[Category:India|B]]
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| − | [[Category:Economy-Industry-Resources |B]]
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| − | [[Category:Government|B]]
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| − | [[Category:Name|Alphabet]]
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| − |
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| − | ==The source of this article==
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| − | ''' INDIA 2012 '''
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| − |
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| − | A REFERENCE ANNUAL
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| − |
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| − | '' Compiled by ''
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| − |
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| − | RESEARCH, REFERENCE AND TRAINING DIVISION
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| − |
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| − | PUBLICATIONS DIVISION
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| − |
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| − | MINISTRY OF INFORMATION AND BROADCASTING
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| − |
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| − | GOVERNMENT OF INDIA
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| − |
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| − | =Banking :India=
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| − |
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| − | The first bank of limited liability managed by Indians was Oudh Commercial Bank
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| − | founded in 1881. Subsequently, Punjab National Bank was established in 1894.
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| − | Swadeshi movement, which began in 1906, encouraged the formation of a number
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| − | of commercial banks. Banking crisis during 1913 -1917 and failure of 588 banks in
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| − | various parts of the country during the decade ended 1949 underlined the need for
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| − | regulating and controlling commercial banks. The Banking Companies Act was
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| − | passed in February 1949, which was subsequently amended to read as Banking
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| − | Regulation Act, 1949. This Act provided the legal framework for regulation of the
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| − | banking system in India.
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| − |
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| − | The largest bank - Imperial Bank of India - was nationalised in 1955 and
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| − | renamed as State Bank of India, followed by formation of its 7 Associate Banks in
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| − | 1959. With a view to bringing commercial banks into the mainstream of economic
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| − | development with definite social obligations and objectives, the Government of
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| − | India issued an ordinance on 19 July 1969 acquiring ownership and control of
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| − | 14 major banks in the country. Six more commercial banks were nationalised from
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| − | 15 April 1980.
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| − |
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| − | As certain rigidities and weaknesses were found to have developed in the
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| − | banking system during the late eighties, the Government of India felt that these had
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| − | to be addressed to enable the financial system to play its role in ushering in a more
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| − | efficient and competitive economy. Accordingly, a high-level Committee on the
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| − | Financial System (CFS) was set up on 14 August 1991 to examine all aspects relating
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| − | to the structure, organization, functions and procedures of the financial systems.
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| − | Based on the recommendations of the Committee (Chairman: Shri M.Narasimham),
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| − | a comprehensive reform of the banking system was introduced in 1992-93.
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| − |
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| − | To review the record of implementation of financial system reforms
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| − | recommended in 1991 by the Committee on Financial System and chart the path of
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| − | reforms in the years ahead, a high-level Committee on Banking Sector Reforms,
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| − | under the Chairmanship of Shri M.Narasimham was constituted by the Government
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| − | of India in December 1997. The Committee submitted its report in April 1998. Some
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| − | of the recommendations of the Committee, on prudential norms, Capital Adequacy
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| − | Ratio, classification of Government guaranteed advances, provisioning requirements
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| − | on standard advances and more disclosures in the Balance Sheets of banks were
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| − | accepted and implemented.
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| − |
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| − | Recent major initiatives undertaken for strengthening
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| − | the financial sector in pursuance to the recommendations of the above Committee
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| − | relate to guidelines to banks on Asset-Liability Management and integrated risk
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| − | management systems, compliance with Accounting Standards, consolidated
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| − | accounting and supervision, fine-tuning of prudential norms for income recognition,
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| − | asset classification and provisioning for NPAs, etc. The guidelines on setting-up of
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| − | Off-shore Banking Units in Special Economic Zones, Fair Practices Code for Lenders,
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| − | Corporate Governance, Anti-Money Laundering measures, Know Your Customer
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| − | (KYC) norms, Corporate Debt Restructuring (CDR) derivatives, guidance notes on
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| − | Credit Risk, Market Risk, Operational Risk, etc., are other important developments
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| − | introduced in the banking sector in recent years. RBI has also issued revised
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| − | guidelines on migration to Basel II Framework on Capital Adequency.
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| − |
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| − | The
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| − | Securitization and Reconstruction of Financial Assets and Enforcement of Security
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| − | Interest Act, 2002 has facilitated NPA management by banks more effectively.
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| − | In 1993, in recognition of the need to introduce greater competition, new private
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| − | sector banks were allowed to be set up. Licenses were issued to 10 banks which had
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| − | satisfied the necessary regulatory requirements. Subsequently in 2001, fresh guidlines
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| − | for setting up new private sector were issued and two banks were issued license
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| − | under those guidelines.
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| − |
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| − | A draft comprehensive policy framework for ownership and governance in
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| − | private sector banks was put in the public domain on 2 July 2004 for discussion and
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| − | feedback. After taking into consideration the feedback received from all concerned
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| − | and in consultation with Government of India, RBI issued detailed Guidelines on
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| − | ownership and governance in private sector banks on 28 February 2005. The
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| − | underlying principles of the guidelines inter alia are to ensure that the all banks in
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| − | the private sector have a networth of Rs 300 crore, ultimate ownership and control of
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| − | private sector banks is well diversified, important shareholders (i.e., shareholding
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| − | of 5 per cent and above) conform to the ‘fit and proper’ criteria. The directors and
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| − | the CEO who manage the affairs of the bank should also satisfy the ‘fit and proper’
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| − | criteria.
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| − |
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| − | The guidelines also provide for restrictions on cross holding of 5 per cent
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| − | above by one bank/Financial Institution (FI) in another bank/FI and observance of
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| − | sound corporate governance principles.
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| − |
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| − | On a review of corporate governance practices in Banks in 2007, RBI advised
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| − | banks in private sector to ensure that their Memorandum and Articles of Association
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| − | conform to the above mentioned stipulations. Banks in private sector were also
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| − | advised to split the posts of Chairman/MD/CEO and have a part time Chairman
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| − | of the Board of Directors and a separate Chief Executive Officer/Managing Director
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| − | who would be responsible for day-to-day management/activities of the bank.
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| − | Reserve Bank of India issued guidelines on May 11, 2005 for merger/
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| − | amalgamation of private sector banks for consolidation in the banking sector. The
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| − | guidelines are application where the merger takes place between two banking
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| − | companies or between a banking company and a non-banking financial company.
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| − | ==RESERVE BANK OF INDIA==
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| − | The Reserve Bank of India (RBI) was established under the Reserve Bank of India
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| − | Act, 1934 on 1 April 1935 and nationalised on 1 January 1949. The Bank is the sole
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| − | authority for issue of currency in India other than one-rupee coins and subsidiary
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| − | coins. As the agent of the Central Government, the Reserve Bank undertakes
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| − | distribution of one-rupee coin as well as small coins issued by the Government of
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| − | India. It acts as banker to the Central Government, and State Governments by virtue
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| − | of agreements entered into with them. It also handles the borrowing programme of
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| − | the Central and State Governments.
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| − |
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| − | It formulates and administers monetary policy
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| − | with a view to ensuring price stability while promoting growth in the real sector
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| − | through proper deployment of credit. It plays an important role in maintaining and
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| − | managing the country's foreign exchange reserves and ensures orderly conditions
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| − | in the foreign exchange market. It also acts as an agent of the Government of the
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| − | India in respect of India’s membership of International Monetary Fund. It regulates
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| − | and supervises commercial banks, Urban Co-operative Banks, Non-banking
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| − | Financial Companies (NBFCs) and select All India Financial Institutions. It also
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| − | performs a variety of developmental and promotional functions. Recently, it has
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| − | taken a lot of measures / initiatives in promoting financial stability, financial
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| − | inclusion and financial literacy in the country as a whole. The RBI celebrated its
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| − | Platinum Jubilee in the year 2009-10 and initiated its outrearch programme to make
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| − | its presence felt in a more effective and broad-based manner amongst the members
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| − | of the general public.
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| − | ==Composition of Banking System==
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| − | The Indian banking system consists of commercial banks both in public and private
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| − | sector, Regional Rural Banks (RRBs) and cooperative banks. As on June 30, 2009,
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| − | Commercial Banking system in India consisted of 171 Scheduled Commercial Banks
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| − | out of which 113 were in public sector, including 86 RRBs. The remaining 27 banks,
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| − | other than RRBs, in the public sector consist of 19 nationalized banks, 7 banks in SBI
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| − | group and IDBI Bank Ltd. Public sector banks (excluding RRBs) accounted for about
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| − | 76.6 per cent of the deposits of all scheduled commercial banks.
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| − |
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| − | Amongst the public sector banks, the nationalised banks (including IDBI Ltd.)
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| − | group is the biggest unit with 33,095 offices, deposits aggregating Rs 19,93,305 crore
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| − | and advances of Rs 14,17,121 crore as on 30th June 2009. The State Bank of India
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| − | group (SBI and its six Associates) with 16,260 offices, deposit aggregating Rs 10,07,042
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| − | crore and advances Rs 7,39,606 crore was the second largest.
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| − |
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| − | Nationalised banks as a group, accounted for more than one-half (50.9 per
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| − | cent) of the aggregate deposits, while State Bank of India and its Associates accounted
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| − | for 23.4 per cent. The shares of other Scheduled Commercial Banks, Foreign Banks
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| − | and Regional Rural Banks in aggregate deposits was 17.1 per cent, 5.5 per cent and
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| − | 3.0 per cent, respectively. As regards gross bank credit, Nationalized Banks held the
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| − | highest share of 50.6 per cent in the total bank credit followed by the SBI Group at
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| − | 23.8 per cent and other Scheduled Commercial Banks at 17.8 per cent. Foreign banks
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| − | and Regional Rural Banks had relatively lower shares in the total bank credit at 5.3
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| − | per cent and 2.5 per cent, respectively. Some important indicators in regard to
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| − | progress of commercial banking in India since 2000 are given in the Table that follows:
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| − |
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| − | [[File: economys1.PNG ||frame|500px]]
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| − | [[File: economys2.PNG ||frame|500px]]
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| − |
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| − | ==Indian Banks' Operations Abroad==
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| − | Indian banks continued to expand their presence overseas. Twenty two Indian banks
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| − | (16 from public sector and 6 from private sector) operated a network of 232 offices.
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| − | (148 branches 22 subsidiaries, 7 joint venture banks and 55 representative offices)
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| − | abroad in 52 countries at end June 2010. The details are given in the table given
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| − | below:
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| − |
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| − | [[File: economyss3.PNG ||frame|500px]]
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| − |
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| − | [[File: economyss4.PNG ||frame|500px]]
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| − |
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| − | ==Deposit Mobilisation and Development==
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| − | There has been a substantial increase in the deposits of Scheduled Commercial
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| − | Banks in the post-nationalisation period. At the end of June 1969, deposits of these
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| − | banks aggregated to only Rs 4,646 crore. As on 31st March 2009, this amount has
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| − | increased to Rs 39.21,981 crore. Deposit amount with Public Sector Banks was Rs
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| − | 3,871 crore in June 1969. As on 31st March 2009, this amount stood at Rs 28,84,457
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| − | crore.
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| − |
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| − | Deposite mobilized by the Banks are utilized for : (i) loans and advances;
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| − | (ii) investments in government and other approved securities in fulfillment of the
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| − | liquidity stipulations; and (iii) investment in commercial paper, shares, debentures,
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| − | etc. up to a stipulated ceiling. There has been a significant increase in the investments
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| − | of banks in governments and other approved securities from Rs 1,361 crore in June
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| − | 1969 to Rs 11,66410 crore as at the end of March 2009 (last reporting Friday). The
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| − | Bank credit of scheduled Commercial Banks have grown from Rs 3,599 crore in June
| |
| − | 1969 to Rs 27,75,549 crore as at the end of March 2009.
| |
| − | ==Banking Ombudsman Scheme==
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| − | Banking Ombudsman Scheme is in operation since 1995. The Scheme works under
| |
| − | the control and supervision of Reserve Bank of India (RBI). Banking Ombudsman
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| − | is an independent body with legal powers to settle disputes quickly and
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| − | inexpensively. RBI has appointed 15 Banking Ombudsman all over the country.
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| − |
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| − | The system is designated to ensure, in normal course, satisfactory resolution of
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| − | complaints as early as possible. Any customer whose grivance has not been resolved
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| − | by banks to his satisfaction can approach Banking Ombudsman. The Banking
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| − | Ombudsman Scheme 2006 has been further amended by RBI in consultation with
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| − | Government of India on 3rd February, 2009. The coverage of the Scheme has been
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| − | widened to include new grounds of complaints. The grounds of complaint broadly
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| − | covered under Banking Ombudsman Scheme are:-
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| − |
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| − | 1. Credit Card complaints;
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| − |
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| − | 2. Pension Complaints;
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| − |
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| − | 3. Complaints relating to failure in providing the promised facilities, including
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| − | through the direct selling agents;
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| − |
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| − | 4. Complaints relating to nonadherence to fair practices code as adopted by
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| − | individuals banks;
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| − |
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| − | 5. Non-payment or inordinate delay in the payment or collection of cheques,
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| − | drafts, bills etc.;
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| − |
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| − | 6. Non-Payment or delay in payment of inward remittances.
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| − |
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| − | 7. Failure to issue or delay in issue of drafts, pay orders or bankers' cheques;
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| − |
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| − | 8. Non-adherence to prescribed working hours.
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| − |
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| − | 9. Complaints from Non-Resident Indians having accounts in India in relation
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| − | to their remittances from abroad, deposits and other bank-related matters;
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| − |
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| − | 10. Levying of charges without adequate prior notice to the customer.
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| − |
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| − | 11. Non-observance of Reserve Bank guidelines on engagement of recovery
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| − | agents by banks; and
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| − |
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| − | 12. Any other matter relating to the violation of the directives issued by the
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| − | Reserve Bank in relation to banking or other services.
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| − |
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| − | During the financial year 2008-09 total number of 75009 complaints, relating
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| − | to the above matters, were handled by various Banking Ombudsman offices. This
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| − | includes pending complaints from previous period. The Banking Ombudsman have
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| − | disposed off 65576 complaints during the same period.
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| − | ==Advances to Priority Sector==
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| − | Extension of credit to small borrowers in the hitherto neglected sectors of the
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| − | economy has been one of the key tasks assigned to the public sector banks in the
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| − | post-nationalisation period. To achieve this objective, banks have drawn up schemes
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| − | to extend credit to small borrowers in sectors such as agriculture, micro and small
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| − | enterprises (manufacturing and services) retail trade and micro credit which
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| − | traditionally had very little share in the credit extended by banks.
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| − |
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| − | The scope and extent of priority sector had undergone several changes with
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| − | several new areas and sectors being brought within the purview of this sector. While
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| − | there had been demands to include new areas, such as infrastructure, within the
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| − | ambit of priority sector, views had also been expressed that the focus on the needy
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| − | sectors of economy and weaker sections of the society would be completely lost
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| − | because of such inclusions. In this background, an Internal Working Group was set
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| − | up in Reserve Bank (Chairman Shri C.S. Murthy) to examine the need for continuance
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| − | of priority sector lending prescriptions, review the existing policy on priority sector
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| − | lending including the segments constituting the priority sector, targets and subtargets
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| − | etc. and to recommend changes, if any, required in this regard.
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| − |
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| − | Based on the draft Technical Paper submitted by the Internal Working Group
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| − | on Priority Sector Lending in September 2005, the guidelines on lending to priority
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| − | sector were revised with effect from April 30, 2007. The revised guidelines on lending
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| − | the priority sector envisages to ensure adequate flow of bank credit to those sectors
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| − | of the society/economy that impact large segments of the population, the weaker
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| − | sections, and to enterprises. The broad categories of advances under priority sector
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| − | now include agriculture, micro and small enterprises sector, microcredit, education
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| − | and housing.
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| − |
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| − | The priority sector lending targets of 40 per cent and 32 per cent as also other
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| − | sub-targets have been retained for the domestic and foreign banks respectively.
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| − |
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| − | Regional Rural Banks have a target of 60 per cent of their outstanding advances for
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| − | priority sector lending. However, these are now calculated as a percentage of
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| − | Adjusted Net Bank Credit (ANBC) (Net Bank Credit plus investments made by
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| − | banks in non-SLR bonds held in HTM category) or credit equivalent amount of Off-
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| − | Balance Sheet Exposures (OBE), whichever is higher, as on March 31 of the preceding
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| − | accounting year, instead of as a percentage of net bank credit as earlier. The
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| − | Progress of Commercial Banking at a glance is given in the Table that follows :
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| − |
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| − | [[File: economys5.PNG ||frame|500px]]
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| − |
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| − | [[File: economys6.PNG ||frame|500px]]
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| − |
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| − |
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| − | outstanding FCNR (B) and NRNR deposits balances would no longer be deducted
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| − | for computation of ANBC for priority sector lending purposes. The revised
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| − | guidelines also take into account the revised definition of small and micro exterprises
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| − | contained in the Micro, Small and Medium Enterprises Development Act, 2006.
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| − | Thus, the services sector has been included in the definition of micro, small and
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| − | medium-enterpprises.
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| − |
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| − | In order to improve the credit delivery to priority sector, including agriculture
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| − | and micro and small enterprises (both manufacturing and services), the following
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| − | policy initiatives were taken recently:
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| − |
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| − | l Commercial banks/sponsor banks of RRBs were allowed to classify, in their
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| − | Books, loans granted to RRBs for co-lending to the agriculture and allied
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| − | activities sectors, as indirect finance to agriculture;
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| − |
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| − | l Bank were advised that loans granted to housing finance companies (HFCs)
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| − | for onlending to individuals for purchase/construction of a dwelling unit
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| − | per family, could be classified as housing loans under priority sector,
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| − | provided the loans granted by the HFCs did not exceed Rs 20 lakh per dwelling
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| − | unit. The maximum amount of loans granted by banks to HFCs that would
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| − | be eligible for classification as housing loans under priority sector in the
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| − | books of banks, however, could not exceed 5.0 per cent of the individual
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| − | bank's total priority sector lending on an ongoing basis.
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| − |
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| − | The above special
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| − | dispensation is applicable for loans granted by banks to HFCs up to March
| |
| − | 31, 2010. Such loans granted till March 31, 2010 will continue to be classified
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| − | under priority sector till they are repaid. It has been further advised that
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| − | banks should link the tenor of the loans granted by them to HFCs in line
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| − | with the average protfolio maturity of housing loans, up to Rs 20 lakh, granted
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| − | by the HFCs to the individual borrowers. If the tenors of such loans granted
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| − | by banks to HFCs is not co-terminus with the on-lending of HFCs, these
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| − | loans would not be eligible for classification under priority sector;
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| − |
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| − | l Banks have been advised to categorize loans granted for agricultural and
| |
| − | allied activities, irrespective of whether the borrowing entity is engaged in
| |
| − | export or otherwise. under priority sector lending as direct advances to
| |
| − | agriculture sector;
| |
| − |
| |
| − | l Loans granted by commercial banks to micro and small enterprises (MSE)
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| − | (manufacturing and services) are eligible for classification under priority
| |
| − | sector, provided such enterprises satisfy the definition of MSC sector as
| |
| − | contained in MSMED Act, 2006, irrespective of whether the borrowing entity
| |
| − | is engaged in export or otherwise.
| |
| − |
| |
| − | l All Scheduled Commercial Banks were advised that loans granted by banks
| |
| − | for Retail Trade (i.e. advances granted to retail traders dealing in essential
| |
| − | commodities (fair price shops), consumer co-operative stores, and advances
| |
| − | granted to private retail traders with credit limits not exceeding Rs 20 lakh)
| |
| − | would henceforth be part of the Small (Service) Enterprises.
| |
| − |
| |
| − | l All Scheduled Commercial Banks, including RRBs, were advised that banks
| |
| − | may waive margin/security requirements for agricultural loans from the
| |
| − | existing level of Rs 50,000/- to Rs 1,00,000.
| |
| − |
| |
| − | l Regional Rural Banks (RRBs) have been allowed to sell loan assets held by
| |
| − | them under priority sector categories in excess of the prescribed priority
| |
| − | sector lending target of 60 per cent. RRBs can also issue Inter-Bank
| |
| − | Participation Certificates (IBPCs) of tenor of 180 days on risk sharing basis
| |
| − | to scheduled commercial banks against their priority sector advances in
| |
| − | excess of 60 per cent of their outstanding advances.
| |
| − |
| |
| − | l In November 2009, banks were advised to draw up a roadmap by March
| |
| − | 2010 to provide banking services through a banking outlet in every village
| |
| − | having a population of over 2,000 which will result in extending financial
| |
| − | inclusion to more than one lakh villages. Such banking services may not
| |
| − | necessarily be extended through a brick and mortar branch but can be
| |
| − | provided through any of the various forms of ICT-based models, including
| |
| − | through Business Correspondents (BCs).
| |
| − |
| |
| − | l In January 2010, all domestic commercial banks- public and private sector
| |
| − | were advised to draw up specific Board approved Financial Inclusion Plans
| |
| − | (FIP) by March 2010, incorporating some basic minimum qualitative features,
| |
| − | and quantitative indicators with a view to rolling them out over the next
| |
| − | three years. Banks have been advised that the top managements need to
| |
| − | emphasize financial inclusion and make it an integral part of their business
| |
| − | plans. Accordingly, banks have prepared their FIPs for the period 2010-13
| |
| − | and submitted to the Reserve Bank. The FIPs are being monitored by the
| |
| − | Reserve Bank on a regular basis.
| |
| − |
| |
| − | Amount outstanding under priority sector lending by public sector banks
| |
| − | during the period June 1969 to March 2010 (provisional) increased from Rs 441
| |
| − | crore to Rs 8,64,564.29 crore and accounted for 41.7 per cent of Adjusted Net Bank
| |
| − | Credit (ANBC) or credit equivalent of off-balance sheet exposures, whichever is
| |
| − | higher, as on the last reporting Friday of March 2010.
| |
| − |
| |
| − | ==Credit Flow to Weaker Scections==
| |
| − | With a view to augment credit flow to small and poor borrowers, commercial banks
| |
| − | were advised by the Reserve Bank of India to provide at least 10 per cent of their net
| |
| − | bank credit or 25 per cent of their priority sector advances to weaker sections
| |
| − | comprising small and marginal farmers, landless labourers, tenant farmers and
| |
| − | share croppers, artisans, village and cotton industries where individual credit limits
| |
| − | do not exceed Rs 50000, beneficiaries of Government sponsored schemes such as the
| |
| − | Swarna Jayanti Gram Swarozgar Yojana (SGSY) for rural poverty, Swarna Jayanti
| |
| − | Shahari Rozgar Yojana (SJSRY) and the Scheme of Rehabilitation of Manual
| |
| − | Scavengers (SRMS), beneficiaries of the Differential Rate of Interest (DRI) scheme
| |
| − | Scheduled Castes and Scheduled Tribes; advances to Self-Help Groups and loans
| |
| − | to distressed poor to prepay their debt to informal sector, against appropriate
| |
| − | collateral or group security.
| |
| − |
| |
| − | Loans granted under above sub-heads to persons from
| |
| − | minority communities would also comprise of loans given to weaker sections. As
| |
| − | on the last reporting Friday of March 2010 (provisional), the amount of outstanding
| |
| − | advances extended by public sector banks to the weaker sections under the priority
| |
| − | sector amounted to Rs 2,12,214.83 crore and accounted for 10.2 per cent of their net
| |
| − | bank credit.
| |
| − | ==Credit Flow to Agriculture==
| |
| − | Banks were initially given a target of extending 15 per cent of the total advances as
| |
| − | direct finance to the agriculture sector to be achieved by March 1985. This target
| |
| − | was subsequently raised to 18 per cent, to be achieved by March 1990. In terms of
| |
| − | the guidelines issued by the Reserve Bank of India in October 1993, both direct and
| |
| − | indirect advances for agriculture are taken together for assessing the target of 18
| |
| − | per cent, with the condition that for the purpose of computing their performance in
| |
| − | lending to agriculture, lending under the "indirect" category in excess of 4.5 percent
| |
| − | of net bank credit would not be rackoned in computing performance under the
| |
| − | sub-target of 18 percent, so as to ensure that the focus of banks on direct lending to
| |
| − | agriculture is not diluted. However, all agricultural advances under the categories
| |
| − | 'Direct' and Indirect' will be reckoned in computing performance under the overall
| |
| − | priority sector target of 40 percent of the net bank credit.
| |
| − |
| |
| − | The Union Finance Minister announced certain measures on 18 June 2004,
| |
| − | which, inter-alia, included a target for doubling of flow of credit to agriculture and
| |
| − | allied activities within a period of three years commencing from 2004-05, over the
| |
| − | amount disbursed during the year 2003-04. This goal was achieved in two years.
| |
| − | [[File: economys7.PNG ||frame|500px]]
| |
| − |
| |
| − |
| |
| − |
| |
| − | People belonging to the Scheduled Castes and Scheduled Tribes have been
| |
| − | recognised as the most vulnerable sections. Banks have been asked to make special
| |
| − | efforts to assist them with adequate credit to enable them to undertake selfemployment
| |
| − | ventures for acquiring income generating capital assets so as to improve
| |
| − | their standard of living. At the end of March 2010, the total outstanding loan extended
| |
| − | to scheduled castes/ scheduled tribes by public sector banks under priority sector
| |
| − | lending was Rs 50,720.00 crore in 86.75 lakh borrowal accounts.
| |
| − |
| |
| − | ==Differential Rate of Interest Scheme (DRI)==
| |
| − | Under the DRI Scheme, introduced in 1972, Public Sector Banks are required to
| |
| − | fulfil the target of lending of at least one per cent of the advances as at the end of the
| |
| − | previous year to the weakest of the weaker sections of the society at an interest rate
| |
| − | of four per cent per annum. The scheme covers poor borrowers having a family
| |
| − | income of not more than Rs18,000 in rural areas and Rs 24,000 in urban and semiurban
| |
| − | areas and not having more than 2.5 acres of un-irrigated or one acre of irrigated
| |
| − | land. They are given credit support of Rs 15,000 as term loan and working capital
| |
| − | loan for productive ventures.
| |
| − |
| |
| − | In addition to the term loan SC/ST beneficiaries
| |
| − | satisfying the income and land holding criteria under the Scheme can also avail of
| |
| − | housing loan upto Rs 20,000/- per beneficiary. The public sector banks have an
| |
| − | outstanding of DRI credit amounting to Rs 752.07 crore as at the end of March 2010.
| |
| − | Swarnjayanti Gram Swarojgar Yojana (SGSY)
| |
| − |
| |
| − | The Union Ministry of Rural Development launched a restructured poverty
| |
| − | alleviation programme, Swarnjayanti Gram Swarozgar Yojana (SGSY) with effect
| |
| − | from 1 April 1999, which replaced IRDP and its allied schemes, viz., Training of
| |
| − | Rural Youth for self Employment (TRYSEM), Development of Women and Children
| |
| − | in Rural Areas (DWCRA), Supply of improved Tool kits to Rural Artisans (SITRA),
| |
| − | Ganga Kalyan Yojana (GKY) and Million Wells Scheme (MWS).
| |
| − |
| |
| − | The scheme aims at establishing a large number of micro enterprises in the
| |
| − | rural areas of the country. The objective of the scheme is to bring every assisted BPL
| |
| − | family, above the poverty line in three years by providing them income generating
| |
| − | assets through a mix of bank credit and government subsidy.
| |
| − |
| |
| − | SGSY is a holistic poverty alleviation scheme covering all aspects of self
| |
| − | employment such as organisation of poor into self help groups, training, credit,
| |
| − | technology, infrastructure and marketing. The scheme is funded on 75:25 basis by
| |
| − | central and the respective State Governments and is implemented by DRDAs
| |
| − | through Panchayat Samitis. Major share of assistance is for 4-5 key activities
| |
| − | identified at the block level.
| |
| − |
| |
| − | Financial year 2008-09 was the tenth year of implementation of the scheme.
| |
| − |
| |
| − | Total number of 13,72,238 swarozgaris have received bank credit amounting to
| |
| − | Rs 1,282.75 crore and Government Subsidy amounting to Rs 416.69 crore under SGSY
| |
| − | as at the end of March 2009. Of the Swarozgaris assisted, 4,36,541 (31.80 per cent)
| |
| − | belonged to Scheduled Castes and Scheduled Tribes (SC/ST), while 6,47,228 (47.16
| |
| − | per cent) were women and 9,881 (0.72 per cent) were physically handicapped.
| |
| − | ==Swarna Jayanti Shahari Rozgar Yojana (SJSRY)==
| |
| − | The SJSRY Scheme is in operation since 1.12.1997 in all urban and semi-urban towns
| |
| − | of India. The programme is applicable to all the cities and towns on a whole town
| |
| − | basis. The target population under SJSRY is the urban poor, those living below the
| |
| − | poverty lines as defined by the Planning Commission from time to time. Under the
| |
| − | scheme, women are to be assisted to the extent of not less than 30 per cent. Differentlyabled
| |
| − | at 3 per cent and SC/STs at least to the extent of the proportion of their strength
| |
| − | in the local population. The scheme is funded on a 75:25 basis by the Central and
| |
| − | the respective State Government.
| |
| − |
| |
| − | The scheme has five components as under:
| |
| − |
| |
| − | (i) Urban Self Employment Programme (USEP)
| |
| − |
| |
| − | (ii) Urban Women Self-help Programme (UWSP)
| |
| − |
| |
| − | (iii) Skill Training for Employment promotion amongst Urban Poor (STEP-UP)
| |
| − |
| |
| − | (iv) Urban Wage Employment Programme (UWEP)
| |
| − |
| |
| − | (v) Urban Community Development Network (UCDN).
| |
| − |
| |
| − | During the year 2008-09, (up to March 2009), disbursements amounting to
| |
| − | Rs 282.25 crore were made in 73,837 cases (out of 1,33,668 applications received). Of
| |
| − | the above, Rs 72.29 crore was disbursed to 20,399 SC/STs, Rs 63.70 crore were disbursed
| |
| − | to 16,676 women and Rs 3.29 crore were disbursed to 792 disabled persons.
| |
| − |
| |
| − | ==Self Help Groups (SHGs)==
| |
| − | The SHG-Bank Linkage Programme was started in the year 1992 as a flagship
| |
| − | programme by NABARD and ably supported by RBI through policy support. The
| |
| − | programme envisages organization of the rural poor into Self-Help Groups (SHGs)
| |
| − | building their capacities to manage their own finances and then negotiating bank
| |
| − | credit on commercial terms. The poor are encouraged to voluntarily come together
| |
| − | to save small thrift regularly and extend micro-loans among themselves. Once the
| |
| − | group attains required maturity of handing larger resources, the bank credit follows.
| |
| − | After phases of (i) pilot testing during 1992 to 1995 (ii) mainstreaming during
| |
| − | 1996 to 1998 and (iii) expansion from 1998 onwards, the SHG-Bank Linkage
| |
| − | programme has now assumed the shape of a movement in the country. The
| |
| − | programme has been well supported by a large number of NGOs and several
| |
| − | Government organisations. The phenomenal outreach of the programme has enabled
| |
| − | an estimated 86 million poor households to gain access to microfinance.
| |
| − | ==PROGRESS IN 2008-09==
| |
| − | ===Small Industries Development Bank of India (SIDBI) ===
| |
| − | The Small Industries Development Bank of India (SIDBI) was established as the
| |
| − | principal financial institution for promotion, financing and development of
| |
| − | industries in the small scale sector. SIDBI started its operations from April 02, 1990
| |
| − | and is engaged in providing assistance to Micro, Small and Medium Enterprises
| |
| − | (MSMEs) in the country. directly and through other institutions like State Financial Corporations, Commercial
| |
| − | Banks, State Industrial Development Corporations, etc. The financial assistance
| |
| − | sanctioned and disbursed by SIDBI during FY 2009-10 aggregated to Rs 421 crore
| |
| − | during FY 2009-10.
| |
| − |
| |
| − | [[File: economys8.PNG ||frame|500px]]
| |
| − |
| |
| − | [[File: economys9.PNG ||frame|500px]]
| |
| − |
| |
| − | ==HOUSING FINANCE==
| |
| − | ===National Housing Bank (NHB)===
| |
| − | The National Housing Bank (NHB), the apex institution of housing finance in India,
| |
| − | was set up as wholly owned subsidiary of the Reserve Bank of India. The NHB
| |
| − | started its operations from July, 1988. The authorized paid-up capital of NHB stood
| |
| − | at Rs 450 crore and the reserves were Rs 1972 crore as on June 30, 2009. The Bank had
| |
| − | made a profit of Rs 236 crores in the year 2008-09 (July-June). The total loan sanctions
| |
| − | were Rs 15737.30 crores and the disbursements were Rs 10899 crores. A special liquidity
| |
| − | package of Rs 4000 crores was provided to HFCs for financing housing loans to the
| |
| − | customers. A fund know as Rural Housing Fund has been established in NHB. The
| |
| − | contribution to the fund for the year amounting to Rs 1760 crores was made by the
| |
| − | Banks which fell short of their priority sector lending obligations.
| |
| − |
| |
| − | Total refinance extended by NHB to all housing institutions including HFCs,
| |
| − | commercial banks and co-operative sector institutions stood at Rs 16208 crore as on
| |
| − | 20 June 2009. NHB minitors the performance of the Golden Jubilee Rural Housing
| |
| − | Finance Scheme being implemented through Scheduled Commercial Banks, HFCs
| |
| − | and co-operative sector institutions. Against a target of 3.50 lakh dwelling units set
| |
| − | by Government of India for the year 2009-10, 3,87,546 units were financed during
| |
| − | the period. In addition to that, National Housing Bank has introduced a Reverse
| |
| − | Mortgage product for senior citizens, under which a senior citizen, who is the owner
| |
| − | of a house can avail a monthly stream of increase against the mortgage of his/her
| |
| − | house, while remaining the owner and occupying the house throughout his/her
| |
| − | lifetime, without repayment or servicing of the loan.
| |
| − |
| |
| − | ==Export-Import Bank of India (EXIM Bank)==
| |
| − | Export-Import Bank of India (EXIM Bank) was established for financing, facilitating
| |
| − | and promoting foreign trade in India. During the year 2009-10, EXIM Bank received
| |
| − | share capital of Rs 300 crore from Government of India. As on 31 March 2010 EXIM
| |
| − | Bank's paid up capital was Rs 1700 crore. During the year ended 31 March 2010,
| |
| − | EXIM Bank sanctioned loans of Rs 38,843 crore while disbursements amounted to
| |
| − | Rs 33,249 crore. Profit after tax of the EXIM Bank for the year 2009-10 amounted to
| |
| − | Rs 513 crore. The broad range of products includes deferred credit arrangements for
| |
| − | exporters, equity and loan support for overseas investments and finance for
| |
| − | technology imports, and RandD Expenditure.
| |
| − |
| |
| − | ==India Infrastructure Finance Company Ltd. (IIFCL)==
| |
| − | IIFCL, a wholly owned Government of India company, was set up on 5 January
| |
| − | 2006 and commenced operations from April, 2006. The company provides long
| |
| − | term debt to commercially viable infrastructure projects as per the Scheme for
| |
| − | Financing Viable Infrastructure Projects through IIFCL (SIFTI). The authorized
| |
| − | capital of the company is Rs. 2000 crore and the paid-up capital as on 31.3.2010 was
| |
| − | Rs 1800 crore. Since commencement of operations in April, 2006 till March, 2010 the
| |
| − | Company has sanctioned Rs 24,378 crore in 139 projects in sectors like Roads, Power,
| |
| − | Airport, ports and urban infrastructure.
| |
| − |
| |
| − | ==National Bank for Agriculture and Rural Development (NABARD)==
| |
| − | National Bank for Agriculture and Rural Development (NABARD) came into
| |
| − | existence on 12 July, 1982. NABARD was established for providing credit for
| |
| − | promotion of agriculture, small-scale industries, cottage and village industries,
| |
| − | handicrafts and other allied economic activities in rural areas with a view to
| |
| − | promoting integrated rural development and securing prosperity of rural areas.
| |
| − |
| |
| − | The paid-up capital of NABARD stood at Rs 2000 crore as on 31 March 2010. The
| |
| − | profit after tax amounted to Rs 1558 crore during the year 2009-10 as against Rs 1390
| |
| − | crore during the year 2008-09.
| |
| − |
| |
| − | Since 1995-96, NABARD has been providing finance to the State Governments
| |
| − | for rural infrastructure projects under Rural Infrastructure Development Fund
| |
| − | (RIDF). Total sanctions by NABARD under RIDF (RIDF-I to RIDF-XV), as on 31
| |
| − | March 2010, aggregate to Rs 1,03,718.00 crore while the comulative disbursements
| |
| − | stand at Rs 68,439.74 crore. This fund is meeting the financing needs of the State
| |
| − | Governments for 31 approved activities, important among which include projects
| |
| − | covering irrigation, rural roads and bridges, health and education, soil conservation,
| |
| − | drinking water schemes, etc.
| |
| − |
| |
| − | In 2006-07, a separate window of Bharat Nirman for construction of Rural
| |
| − | Roads under PMGSY was started. Total sanctions by NABARD to National Rural
| |
| − | Road Development Agency (NRRDA) under RIDF as on 31 March 2010, aggregate
| |
| − | to Rs 18,500 crore and the entire amount has been released to NRRDA.
| |
| − |
| |
| − | ==Regional Rural Banks (RRBs)==
| |
| − | Regional Rural Banks (RRBs) were set up to take banking services to the doorsteps
| |
| − | of rural masses especially in remote rural areas with no access to banking services.
| |
| − | These banks were originally intended to provide institutional credit to the weaker
| |
| − | sections of the society called ‘target groups’. The (RRBs) were conceived as
| |
| − | institutions that combine the local feel and familiarity with rural problems, which
| |
| − | the co-operatives possess, and the degree of business organisation as well as the
| |
| − | ability to mobilise deposits, which the commercial banks possess. The RRBs were
| |
| − | also intended to mobilise and channelise rural savings for supporting productive
| |
| − | activities in the rural areas.
| |
| − |
| |
| − | However, with effect from April 1997, the concept of
| |
| − | priority sector lending was made applicable to RRBs. The interest rates on term
| |
| − | deposits offered and interest rates on loans charged by RRBs have also been freed.
| |
| − | RRBs which comply with certain prescribed conditions are also permitted to open
| |
| − | and maintain non-resident accounts in rupees. With a view to consolidating and
| |
| − | strengthening RRBs, the Government of India initiated, in September 2005, the
| |
| − | process of amalgamation of RRBs, in a phased manner.
| |
| − |
| |
| − | Accordingly as on 31st March,
| |
| − | 2010 the total number of RRBs stood at 82 (46 amalgamated and 36 standalone)
| |
| − | including one new RRB viz. Puduval Bhathiar Grama Bank established in
| |
| − | Puducherry on 26th March, 2008. Further, as part of the financial strengthening of
| |
| − | RRBs, recapitalization of 27 RRBs having negative networth as on 31st March, 2007
| |
| − | was initiated in 2007-08. As on 31st March, 2010, these 27 RRBs have been
| |
| − | recapitalized with total funding support of Rs 1795.97 crore by Government of India,
| |
| − | State Governments and sponsor banks.
| |
| − |
| |
| − | The credit outstanding of all the 196 RRBs stood at Rs 60,159.74 crore as at the
| |
| − | end of March 2009 and deposit of Rs 105568.13 crore had been mobilized by the
| |
| − | RRBs by that date.
| |
| − | =See also=
| |
| − | And the list is growing…
| |
| − |
| |
| − | [[The Reserve Bank of India ]]
| |
| − |
| |
| − | [[Bank of Baroda ]]
| |
| − |
| |
| − | [[Bank of India ]]
| |
| − |
| |
| − | [[Bank robberies: India ]]
| |
| − |
| |
| − | [[Banking and the law: India]]
| |
| − |
| |
| − | [[Banking, India: II (government data)]]
| |
| − |
| |
| − | [[Banking, India: I]]
| |
| − |
| |
| − | [[Banks in India]]
| |
| − |
| |
| − | [[Indian Bank ]]
| |
| − |
| |
| − | [[Indian money in foreign banks ]]
| |
| − |
| |
| − | [[Investment Banking: India ]]
| |
| − |
| |
| − | [[Punjab National Bank ]]
| |
| − |
| |
| − | [[World Bank and South Asia ]]
| |
| − |
| |
| − | [[Raghuram Rajan]]
| |
