Automated teller machine growth

The total number of automated teller machines (ATM's) installed in India by various banks as of end June 2012 was 99,218.The new private sector banks in India have the most ATMs, followed by off-site ATMs belonging to SBI and its subsidiaries and then by nationalized banks and foreign banks, while on-site is highest for the nationalized banks of India.

Branches and ATMs of Scheduled Commercial Banks as of end December, 2014
Bank type	Number of branches	On-site ATMs	Off-site ATMs	Total ATMs
Nationalised banks	33,627	38,606	22,265	60,871
State Bank of India	13,661	28,926	22,827	51,753
Old private sector banks	4,511	4,761	4,624	9,385
New private sector banks	1,685	12,546	26,839	39,385
Foreign banks	242	295	854	1,149
TOTAL	53,726	85,134	77,409	1,62,543

current affairs

Current affairs

       Reserve Bank of India granted ‘in-principle’ approval to 11 applicants to start payments banks. The Committee of the Central Board (CCB) of RBI has selected 11 entities among the 41 applicant who has the reach and the technological and financial strength to provide service to the customers and promote government’s initiative of financial inclusion across the country.

The selected applicants are:

• ·                Reliance Industries
• ·               Airtel M Commerce Services
• ·             Tech Mahindra
• ·            Vodafone m-pesa
• ·           Aditya Birla Nuvo
• ·           Department of Posts
• ·          Cholamandalam Distribution Services
• ·           Fino PayTech
• ·           PayTm
• ·           National Securities Depository Ltd (NSDL)
• ·            Sun Pharma.

As per RBI notification for Payment Banks:

• ·              RBI has given ‘in principle’ approval to these 11 applicants to set payment banks is valid for 18 month period.
• ·               The payments banks will be able to take deposits and remittances, internet banking and other specified services but cannot undertake lending services.
• ·              Their holding are restricted to a maximum balance of Rs 1 lakh per individual customer.
• ·              They can issue ATM/debit cards but not credit cards and can also issue other prepaid payment instruments.
• ·             They can distribute non-risk sharing simple financial products like mutual funds and insurance products. Non resident Indians will not be allowed to open accounts in payment banks.
• ·                Finance Minister had directed RBI to create a framework for licensing payment banks so as to meet government’s financial inclusion target. It is mandatory for payment banks to hold minimum capital of Rs. 100 crore.
• ·                  FDI of 74 per cent is allowed in payment bank. Selection:
• ·                   The applicants were detailed inspected by an External Advisory Committee (EAC) under the Chairmanship of Dr. Nachiket Mor the Director, Central Board of the Reserve Bank of India.
• 
  

Cooperative banking 

Cooperative banking is retail and commercial banking organized on cooperative basis. Cooperative take deposits and lend money in most parts of the world.

Cooperative banking, as discussed here, includes retail banking carried out by credit, mutual savings banks, building societies and cooperatives, as well as commercial banking services provided by mutual organizations (such as cooperative) to cooperative businesses.

Credit unions

Credit unions have the purpose of promoting thrift, providing credit at reasonable rates, and providing other financial services to its members.^[1] Its members are usually required to share a common bond, such as locality, employer, religion or profession, and credit unions are usually funded entirely by member deposits, and avoid outside borrowing. They are typically (though not exclusively) the smaller form of cooperative banking institution. In some countries they are restricted to providing only unsecured personal loans, whereas in others, they can provide business loans to farmers, and mortgages.

Cooperative banks

Larger institutions are often called cooperative banks. Some are tightly integrated federations of credit unions, though those member credit unions may not subscribe to all nine of the strict principles of the World Council of Credit Unions.

Like credit unions, cooperative banks are owned by their customers and follow the cooperative principle of one person, one vote. Unlike credit unions, however, cooperative banks are often regulated under both banking and cooperative legislation. They provide services such as savings and loans to non-members as well as to members and some participate in the wholesale markets for bonds, money and even equities. Many cooperative banks are traded on public stock markets, with the result that they are partly owned by non-members. Member control is diluted by these outside stakes, so they may be regarded as semi-cooperative.

Cooperative banking systems are also usually more integrated than credit union systems. Local branches of cooperative banks select their own boards of directors and manage their own operations, but most strategic decisions require approval from a central office. Credit unions usually retain strategic decision-making at a local level, though they share back-office functions, such as access to the global payments system, by federating.

Some cooperative banks are criticized for diluting their cooperative principles. Principles 2-4 of the "Statement on the Co-operative Identity" can be interpreted to require that members must control both the governance systems and capital of their cooperatives. A cooperative bank that raises capital on public stock markets creates a second class of shareholders who compete with the members for control. In some circumstances, the members may lose control. This effectively means that the bank ceases to be a cooperative. Accepting deposits from non-members may also lead to a dilution of member control.

Land development banks

The special banks providing Long Term Loans are called Land Development Banks, in the short, LDB. The history of LDB is quite old. The first LDB was started at Jhang in Punjab in 1920. This bank is also bassed on Co-operative. The main objective of the LDBs are to promote the development of land, agriculture and increase the agricultural production. The LDBs provide long-term finance to members directly through their branches.

Building societies

Building societies exist in Britain, Ireland and several Commonwealth countries. They are similar to credit unions in organization, though few enforce a common bond. However, rather than promoting thrift and offering unsecured and business loans, their purpose is to provide home mortgages for members. Borrowers and depositors are society members, setting policy and appointing directors on a one-member, one-vote basis. Building societies often provide other retail banking services, such as current accounts, credit cards and personal loans. In the United Kingdom, regulations permit up to half of their lending to be funded by debt to non-members, allowing societies to access wholesale bond and money markets to fund mortgages. The world's largest building society is Britain's Nationwide Building Society.

advantages and disadvantage of internet banking

Advantages of the internet banking:
24*7 access to your account:  The conventional banking system will allow you to operate your personal day only on the week days and during the banking hours. However the internet banking will give you the privilege of the 24*7 operations and access to your account. You can perform all your banking related stuff from your own place and at your convenient time.

Transaction made easy: Sometime you may have to make some payment on the schedule dates else you have to pay the penalty for it. In case of the traditional banking system, you have to put a reminder for all the future transaction and payments. However in real practice it is very difficult to memories al the future transaction. The internet banking will give you the freedom from it. The system will automatically remind you for all your future transaction. In addition to that if you will opt for the standing instruction option, the system will take care of the future transaction.

Settlement of transaction in no time: The internet banking has been developed with an aim to make it user friendly and the attempt has succeeded also. If you are making any financial transaction through the internet banking, the transaction will be settled in no time and you will receive your transaction status immediately.

Disadvantages of the internet banking: 

Legal issue: All the internet banking transactions are settled by the users only as well as the authorization also. In case of any financial disturbance, it requires an authentication from the banking staff.           In case of the internet banking the authorization can’t be obtained from the banking personal and it will invite the legal complaints.

Lack of human touch: Banking is all together a service industry. A service industry always has an upper hand, when there is a customer care with human touch.  In case of the traditional banking system the banking staff will assist you in case of any difficulties. However the internet banking lacks this option. The user will not have a direct contact with the customer contact personal. Though there will be an option to talk over the phone to talk to the customer care personal, you don’t have the guarantee that you are talking to the best person available there.

The security aspects: All internet banking service providers are leaving no stone unturned to make their service a fool proof one. Still there exists a threat to the internet banking. To make your internet banking account a secure one, just follow the guidelines issued by the bank and  do not share your login details with anyone.

BANKING SYSTEM

The banking system in India is significantly different from other countries.

1. Reserve Bank of India:

Reserve Bank of India is the Central Bank of our country. It was established on 1^st April 1935 under the RBI Act of 1934. It holds the apex position in the banking structure. RBI performs various developmental and promotional functions.

It has given wide powers to supervise and control the banking structure. It occupies the pivotal position in the monetary and banking structure of the country. In many countries central bank is known by different names.

For example, Federal Reserve Bank of U.S.A, Bank of England in U.K. and Reserve Bank of India in India. Central bank is known as a banker’s bank. They have the authority to formulate and implement monetary and credit policies. It is owned by the government of a country and has the monopoly power of issuing notes.

2. Commercial Banks:

Commercial bank is an institution that accepts deposit, makes business loans and offer related services to various like accepting deposits and lending loans and advances to general customers and business man.

These institutions run to make profit. They cater to the financial requirements of industries and various sectors like agriculture, rural development, etc. it is a profit making institution owned by government or private of both.

Commercial bank includes public sector, private sector, foreign banks and regional rural banks:

a. Public sector banks:

It includes SBI, seven (7) associate banks and nineteen (19) nationalized banks. Altogether there are 27 public sector banks. The public sector accounts for 90 percent of total banking business in India and State Bank of India is the largest commercial bank in terms of volume of all commercial banks.

b. Private sector banks:

Private sector banks are those whose equity is held by private shareholders. For example, ICICI, HDFC etc. Private sector bank plays a major role in the development of Indian banking industry.

c. Foreign Banks:

Foreign banks are those banks, which have their head offices abroad. CITI bank, HSBC, Standard Chartered etc. are the examples of foreign bank in India.

d. Regional Rural Bank (RRB):

These are state sponsored regional rural oriented banks. They provide credit for agricultural and rural development. The main objective of RRB is to develop rural economy. Their borrowers include small and marginal farmers, agricultural laborers, artisans etc. NABARD holds the apex position in the agricultural and rural development.

3. Co-operative Bank:

Co-operative bank was set up by passing a co-operative act in 1904. They are organized and managed on the principal of co-operation and mutual help. The main objective of co-operative bank is to provide rural credit.

The cooperative banks in India play an important role even today in rural co-operative financing. The enactment of Co-operative Credit Societies Act, 1904, however, gave the real impetus to the movement. The Cooperative Credit Societies Act, 1904 was amended in 1912, with a view to broad basing it to enable organization of non-credit societies.

Three tier structures exist in the cooperative banking:

i. State cooperative bank at the apex level.

ii. Central cooperative banks at the district level.

iii. Primary cooperative banks and the base or local level.

4. Scheduled and Non-Scheduled banks:

A bank is said to be a scheduled bank when it has a paid up capital and reserves as per the prescription of RBI and included in the second schedule of RBI Act 1934. Non-scheduled bank are those commercial banks, which are not included in the second schedule of RBI Act 1934.

5. Development banks and other financial institutions:

A development bank is a financial institution, which provides a long term funds to the industries for development purpose. This organization includes banks like IDBI, ICICI, and IFCI etc. State level institutions like SFC’s SIDC’s etc. It also includes investment institutions like UTI, LIC, and GIC etc.