Banking Awareness for Upcoming Bankers (Introduction)

Hey Guys!

Now it's a time of competition and there is no sites or any book which provides the BANKING AWARENESS notes in one platform.



Here we discuss only those which is essential for banking exam.

Let's start our first session if you like it then share it & continues follow it.

चलिए शुरू करते है ।

What is BANK?

It is the financial institution which deposits & grant loans under Banking Regulation Act 1949.

Note- Second and Fourth Saturday Holidays of bank was declared under Negotiable Instrument Act 1881.

History

First Established Bank- BANK OF HINDUSTAN by East India Company.
First Commercial Bank- ALLAHABAD BANK (1865).

Before Independence Bank was divided into 2 categories

• Swadeshi Bank- Established by Indian which gives loans to only rich peoples in urban areas for doing export in USA.
• Firangi Bank- Established by Foreigners which invest their money on Stock Market.

These two banks focused on Rich Peoples and Profit of their own. But there was no rules and regulation regarding Rate Of Interest etc. Anybody can open their bank in India cause there was no rules and regulation.

Now there was a entry of HILTON YOUNG COMMISSION (1926) also known as Royal Commission. They noticed that these banks work for their own benefits but not for the country and there is no guidance or rules regulation. They advised that to form such a committee which gives instruction to these banks.

But this advice was neglected which results into USA DEPRESSION 1929-30 by collapsing of banking.

After that Government realized that HILTON YOUNG COMMISSION was right.

Now they were willing to established RBI.

RESERVE BANK OF INDIA

• 1934 - Starting Phase of RBI or RBI ACT passed
• 1 APRIL 1935- Establishment of RBI in Calcutta
• 1937- Head Office Shifted to Bombay

Initial Phase RBI started with 5 Crore Rupees only.

• Still ownership was under Privatization which results into personal profit.
• Government had decided to transfer the ownership of RBI..
• 1 January 1948 was the starting phase of Nationalization of RBI.
• 1949 - RBI was Nationalized with 100% Government Share.

Nationalization- Firstly Act was passed then maximum share owned by government. After Nationalization whole share was owned by Government.

Banks was under regulation which aimed to the growth of Economy.

There was a requirement of  Nationalization of Banks.

At initial phase there was a total 20 Nationalized banks, one bank i.e. New Bank Of India Merge with Punjab National Bank so total 19 Banks was nationalized.

Reason for Nationalization

1. Regional Disparity Removal- Openings of banks in urban as well as rural areas.
2. Enhancement of Agriculture- Focus on Agriculture.

So more banks more burden more activities.

Now some banks are specialized in agriculture and some are in business so to regulate these banks RBI categorized the bank according to their specialization.

1. Development Bank - Focus only on development such as NABARD, NHB, EXIM, SIDBI.
   Development bank don't deals with public it only deals with bank which deals with public.
2. Commercial Bank -  It deals with public for business purpose.
3. Co-Operative Bank - For helping peoples.
4. Foreign Bank - Bank which is operated from out of India but branches are presented in India like Citibank, HSBC Bank etc.

To be continued.........................

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