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INDIAN BANKING: CURRENT SCENARIO & CHALLENGES.

INDIAN BANKING: CURRENT SCENARIO & CHALLENGES. www.studygalaxy.com. Content. Define Indian Banking Current Scenario of Indian banking Current Challenges Application of BASEL II (risk management). Technological intensity of banking. Enhancing governance

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INDIAN BANKING: CURRENT SCENARIO & CHALLENGES.

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  1. INDIAN BANKING: CURRENT SCENARIO & CHALLENGES. www.studygalaxy.com

  2. Content • Define Indian Banking • Current Scenario of Indian banking • Current Challenges • Application of BASEL II (risk management). • Technological intensity of banking. • Enhancing governance • Managing Monetary Policy in a Globalizing Environment. • Preventing asset price bubbles • Financial Stability • Conclusion.

  3. Banking • In general term, the business activity of accepting and safeguarding money owned by other individuals and entities, and then lending out this money in order to earn a profit. • Banking Regulation Act, 1949, define banking as the acceptance of deposits of money from the public for the purpose of lending or investment

  4. Current Scenario No. Of banks: • Scheduled Commercial Banks. • Regional Rural Banks • Other scheduled commercial Banks • Non-Scheduled Commercial Banks cont….

  5. Current scenario • Money supply growth for 2010-11 is placed at 17.0 per cent. • Deposits of commercial banks growing by 18.0 per cent. • Investment ceiling in banking sector • FII. • NRIs/PIOs

  6. Current Challenges for Indian banking

  7. BASEL II Application • Initially published in June 2004 • Objectives of basel ii are • Ensuring that capital allocation more risk sensitive; • Separating operational risk from credit risk, and quantifying both; • Attempting to align economic and regulatory capital more closely to reduce the scope for regulatory arbitrage.

  8. Technological intensity of banking. This is one area where Indian banking to show concern for following reasons • Dominance on foreign banks • For making banking transaction fast • For developing mobile banking

  9. Enhancing governance The recent irregularities involving accounting firms in the U.S have made a new challenge for Indian banking sector that is enhancing governance in Indian banking sector. Steps for this purpose • BASEL II • Ceiling of investment for FIIs & FDI • RBI role for maintain control

  10. Managing Monetary Policy in a Globalizing Environment Global crisis requires global response Global factors will impact on central bank policy decisions Extent of challenge depends on the breadth of central bank’s mandate

  11. Preventing asset price bubbles Greenspan orthodoxy on asset bubbles Crisis has dented the credibility of Greenspan orthodoxy Monetary or regulatory action to prevent asset price bubbles?

  12. Financial Stability How does one define financial stability? Should central bank mandate include financial stability? Should financial stability be an exclusive or shared responsibility? Do central banks have the necessary instruments? Does responsibility for financial stability encroach on the independence of central banks?

  13. Conclusion Although Indian banking is on good condition because of its good regulation system but still there are some areas where Indian banking faces problems these five challenges which I discuss is given by our RBI governor in a summit which occurred in feb. of this year. These are some challengs for indian banking system for making our banking system more stable.

  14. THANKS

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