BANKING SYSTEM IN INDIA

Presented by
LOHITH.D
&
NAGARJUN

MBA

1st

Semester

ILAM
Bangalore Campus

Contents
Introduction
Old banking system
New banking system
Conclusion
References

INTRODUCTION
A bank is a financial institution and a financial
intermediary that accepts deposits and channels those
deposits into lending activities, either directly or
through capital market. A bank connects customers
with capital deficits to customers with capital
surpluses.

OLD BANKING SYSTEM

PHASE 1

Early phase from 1786 to 1969 of

Indian banks.
PHASE 2

Nationalization of Indian Banks and

up to 1991 prior to Indian banking
sector Reforms.
PHASE 3
New phase of Indian Banking
system with the advent of Indian
Financial & Banking Sector Reforms
after 1991.

FUNCTIONING OF OLD BANKS

ACCEPTING DEPOSITS
ISSUAL OF DEMAND

DRAFTS
GRANTING LOANS &
ADVANCES
UNDERTAKING SAFE
CUSTODY OF
VALUABLES,IMPORTANT
DOCUMENTS &
SECURITIES BY
PROVIDING SAFE
DEPOSIT VAULTS OR
LOCKERS

 DOCUMENTATION IS

MAINTAINED THROUGH
LEDGERS ONLY.
MINIMUM BALANCE FOR
OPENING AN ACCOUNT
WAS MORE DURING THIS
PERIOD.
CREDITS WERE GRANTED
AT VERY HIGH RATE OF
INTEREST.
TOKEN SYSTEM FOR
WITHDRAWAL OF CASH
FROM THE ACCOUNT.

DISADVANTAGES
POSSIBILITY OF HUMAN ERRORS .
TIME CONSTRAINT.
CUSTOMER RELATIONSHIP WAS LIMITED.
OVER DRAFT WAS NOT AVAILABLE.
PROCESSING FEES WAS CHARGED FOR ALL

THE TRANSACTIONS .
PASSING OF CHEQUES WAS DELAYED.
LIMITED USE OF TECHNOLOGY.

New Banking System

WHY TECHNOLOGY IN BANKS ?
TO TRANSFORM FINANCIAL SERVICES INDUSTRY IN THE NET-WORKED

WORLD:
-INCREASED OPERATION EFFICIENCY,PROFITABILITY & PRODUCTIVITY
- SUPERIOR CUSTOMER SERVICE
- PROVIDE SERVICES / PRODUCTS ACROSS A
RANGE OF CHANNELS
- TO BE FUTURISTIC AND HAVE TIME VALUE IN ALL ITS
DEALINGS
WITH CUSTOMERS
-IMPROVED MANAGEMENT/ACCOUNTABILITY
-BETTER CROSS SELLING ABILITY
-MINIMAL TRANSACTION COST
-IMPROVED FINANCIAL ANALYSIS CAPABILITIES.

Business
process ReEngineering

Human
Resource
empowerment

Planning
for
Disasters

Pre-requisites for
Technology

Focus aspects of New Banking Systems

CORE BANKING

SOLUTIONS(CBS)
Pooling data at central
server
CUSTOMER

RELATIONSHIP
MANAGEMENT(CRM)

Focus aspects of New Banking Systems

ELECTRONIC FUND TRANSFER(EFT)
ELECTRONIC CLEARING SYSTEM(ECS)
ANY BRANCH BANKING
RISK MANAGEMENT
ATMS
CARD MANAGEMENT
MOBILE BANKING

BEWARE OF :
HACKING
PHISHING
PHARMING
SKIMING
TROJAN

CONCLUSION
The reforms to the old Banking system with
the advent of technology has bought in a
dramatic change in its functioning and has
increased customer relationship.

REFERENCES
Technology in Indian Banking[Commercial

Banking].
Traditional Banking System in India.
Trend & progress of Banking in India, RBI
2006
Google search.
www.antiphishing.com