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Download Bharati Pathak's Indian Financial System pdf for RBI GRADE B is a comprehensive book that offers insight into the complex amalgamation of various institutions, markets, regulations and laws, analysts, transactions, claims, and liabilities. SBI Clerk Books and Study. ppti.info Page 2. ppti.info Page 3. https://rbigradeb. com/. Page 4. ppti.info Page 5. ppti.info Page 6. File: \\\project1\Pearson\Bharati Pathak-Indian Financial System 3e\ MAIN\A01\ppti.info

Indian Financial System Bharti Pathak Pdf

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BY BHARATI V. PATHAK. DOWNLOAD EBOOK: THE INDIAN FINANCIAL SYSTEM: MARKETS,. INSTITUTIONS AND SERVICES BY BHARATI V. PATHAK PDF. The Indian Financial System is a complex amalgamation of various institutions, markets, regulations and laws, analysts, transactions, claims and liabilities. The Indian Financial System: Markets, Institutions and Services, 5/e is a comprehensive text that encompasses new developments in the financial system and.

In this period, expansion took place in the following manner. Growth in the number of branches of the bank. More attention was given to the development of the rural segment of the economy.

The neglected industrial segment also given sufficient attention. In , due to such crash, public lost their confidence in the banking system and so that RBI gave two schemes to stabilize the banking system. In terms of The Banking Companies Act , RBI got powers of control over the bank activities of particular group of persons, as well as to regulate loan, advances and guarantees given by bank.

The co-op. Foreign exchange trade and transactions increased by the Indian banks in these years. The business houses that had control over such banks they channelized major deposits in their own companies because of their own benefit. They were ignoring the area of government focus like agriculture, small scale industries etc. So, the need of nationalization of banks was raised. Banking framework was designed to achieve social orientation. To identify, the credit demand of various sectors of economy and to determine their priorities, The National Credit Council was setup in During December, to June government of India adopted the policy of social control of banks.

Their aim for this was an equitable and purposeful distribution of credit to needed sectors.

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But, due to some reasons, government not satisfied with this social control over banks to achieve such social goals. So, government realized that to fulfill the social objectives, social ownership is a better rather than social control. So, government decided to have ownership with the banks in the form of nationalization. Negligence of needy sectors by the business houses.

Less spread the banking habit in rural and semi-urban areas. The reach of banking services to rural areas and neglected sections. Control of big business houses over commercial banks which results in concentration of wealth and economic power. And, a step of milestone was taken and major process of Nationalization was carried out by the then Prime Minister of India, Late Mrs. Indira Gandhi. On bank nationalization the then Prime Minister Late Mrs. Indira Gandhi stated in her broadcast address of July 19, that…..

Removal of control by a few. Provision of adequate credit for agriculture and small industry and export. Giving a professional bent to management. Encouragement of a new class of entrepreneurs. The provision of adequate training as well as terms of service for bank staff.

To give service to agriculture sector to promote agriculture production and rural development. To give credit and other facilities to small entrepreneurs. Ending the control of big business houses. To create development professional management atmosphere in banking sector. Widening banks branch network in rural and semi-urban area. Mobilization of saving through bank deposits. Re-orientation of credit flows. Steps to achieve objectives To, achieve these objectives, several steps have been taken like……..

Banks were required to open offices in rural and semi-urban areas to increase branch network rather than urban areas. To achieve overall monetary and credit policy, banks required to formulate a credit plan as a whole each year.

The Indian Financial System by Bharti Pathak

Credit Authorization Scheme was introduced. Lending rate structure was built up in such a manner that large borrowers paid higher rates of interest and certain sectors paid lower rates of interest.

Regional Rural Banks were setup as separate institutions in the mid seventies, to meet the credit needs of the weak section more effectively.

To ensure that credit given by banks were used in development plan; the district credit plans and annual action plan were formulated. The Central Bank of India. The Bank of India Ltd. The Punjab National Bank Ltd. The Bank of Baroda Ltd.

The United Commercial Bank Ltd. The Canara Bank Ltd. The United Bank of India Ltd.

The Dena Bank Ltd. The Syndicate Bank Ltd. The Union Bank of India Ltd. The Allahabad Bank Ltd. The Bank of Maharashtra Ltd. The Indian Overseas Bank Ltd. The Indian bank 36 Each bank was having deposits of more than Rs. This was a revolution in the Indian banking system. The nationalization is a shift from class banking to mass banking.

This in turn resulted in a significant growth in the geographical coverage of banks. The manufacturing sector also grew during the s in protected environment. The next wave saw the nationalization of 6 more commercial banks in On 15th April , 6 more banks were nationalized with deposits of over Rs.

These banks are…. The Andhra Bank Ltd. The Corporation Bank Ltd. The New Bank of India Ltd. The Oriental Bank of Commerce Ltd. The Punjab and Sind Bank Ltd.

The Vijya Bank Ltd. Since then the number of scheduled commercial banks increased fourfold and the number of bank branches increased eight fold. They are the backbone of the country. Without improvement of their day to day life, the country cannot march ahead.

So it can be said that the progress of the villages is the progress of the country. The two significant aspects of nationalization were rapid branch expansion and channeling credit according to priorities. In the wake of nationalization the growth and development of the Indian banking system was phenomenal.

By the end of the second decade of nationalization, Indian banking was relatively sophisticated, 37 with a wide network of branches, huge deposit resources and extensive credit operations.

So, it is found out that the nationalization of banks was a bold and major economic step in the evolution of public sector banking. Here, 85 serious policies were developed by the banking industry. Some of them are …. Increase in the number of branches. Improvement in the ratio of housing loan. Improvement in the customer services. Increase the bank deposits and advances given to the customer.

Improvement in the market money condition. Increase banking profitable aspect. Improvement in bank service and product line. Provide sufficient training to the staff of the bank.

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Improvement in customer satisfaction criteria. The first phase of banking sector reforms came up with the main objective to improve the operational efficiency of the banks and also improvement in the performance of the banks.

Though, competition also rose with Liberalization, Privatization and Globalization. These new thoughts were able to compete with the use of technology but Public Sector Banks suffered, because of they were not using the technology largely due to the opposition from trade unions and high initial costs of installation.

The need for a policy shift had become evident much earlier, as many countries in East Asia achieved high growth and poverty reduction through policies which emphasized greater export orientation and encouragement of the private sector.

India took some steps in this direction in the s, but it was not until that the Government signaled a systematic shift to a more open economy with greater reliance upon market forces. However, the Government lacking initiative did not carry out reform measures earnestly. In , the country was caught into a deep economic crisis. The Government at this juncture, decided to introduce comprehensive economic reforms. The banking sector reforms were part of this package. The decade of ninety is known for its liberal policies adopted by the Government of India and a series of reforms in financial sector.

During this period, the country witnessed banks with new motives like…Local Area Banks. In this period, banks also have started to adopt new technology and diversification of business as an important strategy for survival. Many new private sector banks came into existence and many new foreign banks came to India.

Out of these, improvement in the policy framework has been undertaken by reducing the reserve requirement, changing the administered structure of lending rates, enlarging the scope of priority sector lending and linking the lending rates with the size of advances. Efforts have been made for improvement in the institutional framework has been sought through recapitalization, infusing, competition and strengthening of supervisory system.

Government appointed a committee in the financial system under the Chairmanship of Mr. Narsimham in August, They delivered their reports within 3 months. These reports are landmark documents and have influenced greatly the banking sector reforms during the past few years. Abolition of directed credit programme: In practice, however, the directed credit not only undermined the profitability of the banks but also failed to promote efficiency and equity.

The effects of directed credit on equity are not encouraging. So, the committee noted that the case for directed credit under existing conditions is quite weak.

So committee recommended a phasing out of the directed credit programme. Some credit support was recommended in the medium term to the priority sector, which have been redefined. Interest rate deregulation: The existing interest rate system in India at that time was very complex. This reduced its ability to promote effective use of credit.

A system of concessional interest rates was developed in this country. This committee observed that this system had become too complex and needed some kind of rationalization. So in beginning the system of multiple concessional interest rates was adopted due to genuine social concern.


But, the NARSIMHAM Committee ignored social concerned and argued that the system of directed credit programmes based on too many concessional interest rates has acquired too many distortions and thus it would be desirable to phase out concessional interest rates. For the same reasons the rate of interest on saving deposits with banks should be positive in real terms.

For them to do so, rates will have to be allowed broadly to be determined by market forces. Loan recovery The recommendation was that Government should take steps to ensure recovery of bank dues by creating some special recovery tribunals and provide for quick recovery process.

Restructuring the banks The recommendation was to create large banks to restructure the banks and those banks would become international in character, national banks with wide branch network throughout the country and engaged in universal banking, local banks in specific regions and rural banks for rural areas.

This revised system should be market driven and based on profitability consideration and brought about through a process of mergers and acquisition. Income recognition The recommendation in this regard was that no income should be recognized in the accounts in respect of Non-Performing Assets.

An asset would be considered Non-Performing if interest on such asset not received up to more than days at the balance sheet date. They are given a period of 3 years, to move forward for the norms. Transparency The committee recommended the modification of the format of bank balance sheet and profit and loss account so that it discloses more information.

And such provision should be created in this regard. Tackling doubtful debts The creation of Asset Reconstruction Fund ARF to take over bad debt of the bank on discount and bank balance sheet should be made clean. The ARF should provided such special powers for recovery and its capital should subscribed by public sector bank and financial institution.

Entry of private banks The indication of no further nationalization of banks, will remove the existing disincentives of banks.

Equal treatment should be given to public sector and private sector banks.

Restrictions should be removed for the private sector banks to being set up. Foreign banks Recommendation is that foreign banks be allowed to open offices in India either as branches or subsidiaries. Branch licensing Individual commercial banks should allow such authorities to operate or close their branch. RBI should be the primary agency for the regulation of the banking system. Supervision of banks Supervision should be based on evolving prudential norms and regulations rather than over regulated and over administered.

Banks are given freedom to set their own interest rates. RBI implemented the recommendation on capital adequacy norms. As per the guidelines of RBI banks classified their loan assets based on recovery record. Format of the bank balance sheet and profit and loss account was modified by the RBI and Government. The Government passed an Act during August, for creation of recovery tribunals for loan accounts, and established eight such tribunals also.

No steps have been taken in regard to creation of Asset Reconstruction Fund.

Liberalization of the branch licensing. Merger of strong banks with weak one. Inspite of the growth and improvement of the banking industry especially in terms of branch expansion, deposit mobilization etc. Due to such hurdles, the Government of India appointed the second Committee under the Chairmanship of same person Mr. NARSIMHAM in , to review the progress of first phase of banking reforms and further to give suggestion to make improvement and strengthen the banking system by which, to put it into international competition.

The competition was arising in each industry mainly due to the global changes in the world economy. The committee reviewed the performance of the banks in the first phase of the reforms and as regard submitted its report with some new recommendations, which are as under…..

Large banks should not be merged with weaker banks. The reform in the banking sector has been receiving major emphasis. Asset and liabilities of banks have grown consistently at a high rate. The financial performance of the banks also improved is reflected in their increased profitability. Another development has been the sharp reduction in non-performing loans. By restructuring of the workforce they cut down the staff cost and increased business per employee.

Public sector banks are in the process of reducing their excessive manpower, excessive NPA, excessive governmental equity etc. Though, the public sector banks are facing many challenges these days, like adoption of new technology, increasing level of NPa, falling revenues, massive workforce, credit risk, market risk, global competition etc.

They have implemented multiple new functions. However, the private sector banks are good in modern technology, infrastructure, customer orientation etc. Due to the economic and corporate sectors slowdown, banks are focusing more on retail segment these days. Many of them have entered in new vista of insurance and many other are on the way to.

Hence, current phase has changed the way of banking as it was earlier. It has done a lot and still a lot to do in future.

It was established in April with a share capital of Rs. The share capital was divided into shares of Rs. In the beginning, the government held shares of nominal value of Rs. She has been teaching finance to graduate level students at the School of Commerce, Gujarat University for over 20 years. She is also a visiting faculty at business schools like L. Institute of Business Administration and B. School of Management. She has undertaken such pioneering work as designing the Post-Graduate Diploma in Financial Markets and Insurance program, which is a self-financed evening program, at Gujarat University.

Many of her research papers have been published in Indian journals of repute. She has also been invited to speak at various national and state level seminars. Read More. Not Enabled. Customers who viewed this item also viewed.

Indian Financial System. The Indian Financial System: Markets, Institutions and Services Old Edition. Indian Financial Systems. Satya Pal Sharma.

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Paperback Verified Purchase. A lot of facts are not presented in chronological order. And it gets quite annoying. Easy to understand. Had browsed through this book on Google Books and then decided to purchase it. Worth the money.Improvement in the market money condition.

Chapter TQM Banking sector plays a vital role in an economy. Top Charts. Removal of control by a few.

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