Central Bank Of

India

By sunidhi bihani

XI C , 1114C
 Introduction
Central Bank of India is a central public sector
undertaking. It is under the ownership of the Ministry of
Finance , Government of India it is based in Mumbai the
financial capital of India and capital city of state of
Maharashtra .
Customer service : 1800221911

Stock price : 19.85 ruppees

Headquarters : Mumbai

Number of employees : 32,335 (2021)

Parent : Ministry of finance , Government of india

Founders : Sorabji Pochkhanawala ,Pherozeshah Mehta

 History
The central Bank of India was established on 21 December
1911 by Sir sorabji pochkhanwala with so F hmm idea
how Ferozeshah Mehta as chairman and claims to have
been the first commercial Indian bank completely owned
and managed by Indians.

EARLY 20TH CENTURY

My 1918 central Bank of India had established a branch in

Hyderabad a branch in nearby secunderabad followed in 1925.

in 1923 it acquired the data industrial bank in the wake of the failure
of the alliance Bank of shimla the data bank established in 1917 in
had opened a branch in Madras in 1920 that became the central Bank
of India .Central Bank of India was instrumental in the creation of the
first Indian exchange bank the central exchange Bank of India which
opened in London in 1936. however Barclays Bank acquired central
exchange Bank of India in 1938.Although before World War Two
central Bank of India established a branch in Rangoon the branches
operations concentrated on business between Burma and India and
especially money transmission via telegraphic transfer profits derived
primarily from foreign exchange and margins. Bank also lent against
land, produce, and other assets, mostly to Indian businesses.
POST WORLD WAR II

In 1963, the revolutionary government in Burma

nationalized central Bank of India's operations there which
became people's bank #1.

In 1969 the Indian government nationalized the bank on

19th July together with 13 others.

Central Bank of India was one of the first banks in India to

issue credit cards in the year 1980 in collaboration with
MasterCard.

108th foundation day central Bank of India launched its first

step towards robotic banking, a robot named “megha”.

CBI is one of twelve public sector banks in India that was

recapitalized in 2009 .

As on 31 march 2021 , the bank has a network of 4608

branches , 3644 ATMs , ten satellite offices and one extensin
counter .it has a pan India presence covering all 28 states
,seven out of eight union territories and 574 district
headquarters out of all districts in India .
 Controversies
In the 1980s the managers of the London branches of central
Bank of India, Punjab National Bank, and Union Bank of
India were caught in a fraud in which they made dubious
loans to the Bangladeshi jute trader Rajender Singh Sethia.
The regulatory authorities in England and India forced all
three Indian banks to close their London branches.

The challenges are even greater if wage pressures

breakthrough before inflation start to moderate. In addition
there are trade-offs stemming from public and private debt
levels that are very high and central bank balance sheets
have really been as large as now.
 Activities of central
bank
• Monetary policy : by setting the official interest rate .

• Financial stability : acting as government’s bankers and as

the banker’s bank

• Reserve management : managing a country’s foreign

exchange and gold reserves and government bonds.

• Banking supervision : regulating and supervising the

banking industry.
• Payments system :managing or supervising means of
payments and inter banking clearing systems.

• Coins and notes issuance ;

other functions of central banks may include Economic Research,

statistical collection, supervision of deposit guarantee schemes,
advised to government and Financial Policy
 Currency issuance
at the most basic level monetary policy involves
establishing what form of currency the country may have,
whether a flat currency gold backed currency ( disallowed
for countries in the International Monetary ), currency board
or a currency union. When a country has its own national
currency, this involves the issue of some form of
standardized currency, which is essentially a form of
promissory note : “MONEY “. Under certain circumstances
historically, this was often a promise to exchange the money
for precious metals in some fixed amount. Now when many
currencies are flat money, the” promise to pay” consist of the
promise to accept that currency to pay for taxes .

A central bank may use another countries currency either

directly in a currency union, or indirectly on a currency
board. In the latter case exemplified by the Bulgarian
National Bank Hong Kong and latvla (until2014), the local
currency is backed at a fixed rate by the central banks
holdings of a currency. Similar to commercial banks, central
banks hold assets (governments bonds , foreign exchange of
gold , and other financial assets ) and incur liabilities
(currency outstanding ).

Central banks create money by issuing bank notes and

loaning them to the government in exchange for interest
bearing assets such as government bonds when central
banks decide to increase the money supply by an amount
which is greater than the amount their national governments
decide to borrow, the central banks may purchase private
bonds or assets denominated in foreign currencies.

The European Central Bank remit its interest in country

central banks of the member countries of the European
Union. the US Federal Reserve remits most of its profits
to the US treasury. This income, arrived from the power
to issue currency, is referred to as seigniorage alma and
usually belongs to the national government. Deep state
sanctioned power to create currency is called the right of
insurance. Throughout history there have been
disagreements over this power since whoever controls
the creation of currency controls the segniorage income.
The expression monetary policy may also refer more
narrowly to the interest rate targets and other active
measures undertaken by the Monetary Authority.
 Goals of central
banks
Price stability

The primary role of central banks is usually to maintain

price stability, as defined with a specific level of
inflation, inflation is defined either as the devaluation of
a currency or equivalently the rise of prices relative to
currency for stock most central banks currently have an
inflation target close to 2%.

then the inflation lowers real wages, keynesians view

inflation as the solution to involuntary unemployment.
However unanticipated inflation leads to lender losses as
the real interest rate will be lower then expected. Thus,
Keynesian monetary policy aims for a steady rate of
inflation a publication from the Austrian school, the case
against the Fed argues that the efforts of the central
banks to control installation have been
counterproductive ‘
High employment

Frictional unemployment is the time period between

jobs when a worker is searching for or transitioning from
one job to another. Unemployment beyond frictional
unemployment is classified as unintended employment.

For example, structural employment is a form of

unemployment resulting from a mismatch between
demand in the labor market and the skills and locations
of the workers seeking employment macroeconomic
policy generally aims to reduce unintended
employment.

Keeney labeled any jobs that would be created by a rise

in wage goods as involuntary unemployment. men are
involuntary unemployment employed if, in the event of a
small rise in the price of wage goods relatively to the
money wage, both the aggregate supply of labor willing
to work for the current money wage and the aggregate
demand for it at that wage would be greater than the
existing volume of employment.
Economic growth

Economic growth can be enhanced by investment and

capital, such as more or better machinery. A low interest
rate implies that firms can borrow money to invest in
their capital stock and pay less interest for it. Lowering
the interest is therefore consider to encourage economic
growth and is often used to alleviate signs of low
economic growth.

On the other hand, raising the interest rate is often used

in times of high economic growth as a Contra cyclical
device to keep the economy from overheating and avoid
market bubbles .

Further goals of monetary policy are stability of interest

rates comma of the financial market ,and of the foreign
exchange market.

Goals frequently cannot be separated from each other

and often conflict. Costs much therefore he carefully
weighed before policy implementation.
Climate change

In the aftermath of the Paris agreement on climate change ,

a debate is now underway on whether central banks should
also pursue environmental goals as part of their activities .

In 2017, eight central banks have from the network for

greening the financial system to evaluate the way in which
central banks can use their regulatory and monetary policy
tools to support climate change mitigation.

today more than 70 central banks are part of the NGFS.

in January 2020 do you mean central bank has announced it

will consider climate considerations when reviewing its
monetary policy framework.

Proponent of “green monetary policy” are proposing that

central banks include climate related criteria in their
collateral eligibility frameworks when conducting acid
purchases and also in their refinancing operations but critics
such as Jens Weidmann arguing it is not central banks role
to conduct climate policy.

China is among the most advanced central banks when it

comes to green monetary policy. It has given green bonds
preferential status to lower their yield and uses window
policy to direct green lending.
What’s dragging the stock of Central Bank of India
down?

The stock price of Central Bank of India trading at Rs 63.50

has fallen by 36% in the last one year. It has under-
performed the benchmark BSE Bankex that increased by 6%
in the same period. The sluggish trend is on account of the
bank’s poor show in the past few quarters. It is among the
few mid-tier banks that have not been able to improve its
asset quality amidst falling margins.
The bank’s performance in the June 2012 quarter was not so
encouraging either. Its profit before provisi ..

While the advances for the bank grew at 22.4%, the growth
in CASA deposits was only 7% due to decline of 14.6% in
Current account deposits. The overall deposits of the bank
also grew by merely 6% due to the banks’ decision to reduce
the proportion of bulk deposits. Bulk deposits and
Certificates of Deposits (CDs) comprise 31.3% of total
deposits for Central Bank, which is way beyond the
benchmark 15% prescribed by the Finance Ministry.
Concerns on Asset quality
The asset quality of the bank deteriorated with its net NPA
ratio rising by 235 basis points from June 2011 to June
2012. The bank has high exposure to distressed sectors like
power and infrastructure and reported slippages of Rs 1,448
Crore and restructured loans of Rs 2,674 Crore, out of which
Rs 2,400 Crore pertained to discoms. The total outstanding
restructured book of Rs 20, 686 Crore -13.4% of the total
advances - is the highest in the ..
These are the weekly gainers of the asset of
central bank of India .
 Statistics
What is statistics?
Statistics helps in the study of market structure and understand the
different economic problems. After a better understanding of the
economic problems, statistics also help in solving those issues by
formulating appropriate economic policies
How reserve bank of India faced
demonetization ?

On November 8, 2016, the Government of India announced

the demonetization of all Rs 500 and Rs 1,000 banknotes of
the Mahatma Gandhi Series. Now that a year has passed
since that momentous decision, let’s see how it was planned
and executed, contrary to criticisms that the Reserve Bank of
India was underprepared.

Planning
When do we call an exercise a ‘planned’ one? When it
includes a detailed analysis of the idea, its definition, scope
and its elaboration, legality thereof, merits and demerits of
the proposal, alternatives and options to the idea, clear
timelines and managing after-effects of the programme.

The demonetisation programme did have all these elements.

When demonetisation commenced, not much information
was available to people beyond the core group.
Implementation
The implementation of the programme was as per the plans
agreed on. The currency management wings of the Reserve
Bank and the banking system were geared up for long hours
on weekdays and to work on holidays. Additional manpower
was deployed, including contracting retired personnel. The
presses also enhanced their labour force; worked on long
shifts and on holidays as well.

Direct touch points for cash delivery were trebled in number.

“Effect of demonetization on reserve bank of India “

After the demonetization period . The central Bank of India
was in this state : in the year 2015 to 16 the banknotes in
circulation was of 17,97,00,000 in 2016 to 2017 the
banknotes in circulation was of 13,01,00,000 in 2017 to
2018 the banknotes in circulation was of 18 crore and.03
lakhs in year 2018 to 2019 the banknotes is accumulation
were off 21 crore and 1,00,000 in year 2019 to 2020 the
circulation of banknotes was of 26,19,00,000
 99.30% of demonetised money back in the system,
says RBI report

MUMBAI: As much as 99.3 per cent of the junked Rs 500 and

Rs 1,000 notes have returned to the banking system, the RBI
said today, indicating that just a miniscule percentage of
currency was left out of the system after the government's
unprecedented note ban aimed at curbing black money and
corruption.

The Reserve Bank of India (RBI), which has taken an awfully

long time to count the currency that was returned in the
limited period window provided by the government to
exchange or deposit the demonetised currency, said in its
Annual Report for 2017-18 that the exercise is finally over.

Of the Rs 15.41 lakh crore worth Rs 500 and Rs 1,000 notes

in circulation on November 8, 2016, when the note ban was
announced, notes worth Rs 15.31 lakh crore have been
returned.

This meant just Rs 10,720 crore of the junked currency did

not return to the banking system.
After the note ban, old junked notes, called specified bank
notes (SBNs), were allowed to be deposited in banks with
unusual deposits coming under income tax scrutiny.

The "humungous task of processing and verification of

specified bank notes (SBNs) was successfully achieved," it
said.

The SBNs received were verified, counted and processed in

the sophisticated high speed .

A collateral damage as a result of rise in printing and other

cost was dividend RBI pays to the government.

The government replaced old Rs 500 notes with new ones,

but no replacement for Rs 1,000 notes have been made.
Instead, a new Rs 2,000 notes were introduced post note
ban.

Post-demonetisation, RBI spent Rs 7,965 crore in 2016-17

on printing new Rs 500 and Rs 2,000 and other
denomination notes, more than double the Rs 3,421 crore
spent in the previous year.
 Frauds faced by
central bank of India

In financial year 2022, the central bank of India

also known as reserve of India (RBI) reported a
total of around 9103 bank fraud cases across
India
 Case study – I
Hyderabad : The Special Judge for CBI cases, Hyderabad has
sentenced 12 accused to Rigorous Imprisonment-ranging up
to five years and a combined fine of Rs.11 lakh in a bank
fraud case.According to a release issued by the Central
Bureau of Investigation, the details of those sentenced
include K. Raja Rao, the then Branch Manager, Central Bank
of India, Bollaram Branch, to undergo five years Rigorous
Imprisonment with fine of Rs. 2.25 lakh.The others
sentenced include private persons – Sridhar to undergo
three years Rigorous Imprisonment with fine of Rs. 75,000,
K. Rani to undergo three years Rigorous Imprisonment with
fine of Rs. 75,000, Vislawat Kumar to undergo three years
Rigorous Imprisonment with fine of Rs. 75,000, V.Susheel
Sudhakar to undergo three years Rigorous Imprisonment
with fine of Rs. 75,000, H. Raja Shekar Reddy to undergo
three years Rigorous Imprisonment with fine of Rs. 75,000,
N. Rambabu to undergo three years Rigorous Imprisonment
with fine of Rs.75,000, Venkat Appayya to undergo three
years Rigorous Imprisonment with fine of Rs.75,000, D. Anil
Kumar to undergo three years Rigorous Imprisonment with
fine of Rs.75,000, D.M.K. Naidu to undergo three Rigorous
Imprisonment with fine of Rs.1,25,000, B.Rama Krishna
Prasad to undergo three years Rigorous Imprisonment with
fine of Rs. 50,000 and V. Yadagiri to undergo three years
Rigorous Imprisonment with fine of Rs.1,00,000.
The CBI had registered a case on in 2004 against Raja Rao,
formerly Branch Manager, Central Bank of India, Bollaram
branch and others on the allegations that the Branch
Manager entered into conspiracy with other individual
borrowers (private persons) in the matter of fraudulent
sanction and disbursement of housing loans during
February-April 2002 to the tune of Rs. 98,43,706 without
verifying the authenticity & eligibility of the borrowers. An
alleged loss to the tune of Rs. 98,43,706 was caused to
bank.

After investigation, CBI filed thee charge sheets on in July

2006 against the accused. The Trial Court found the accused
guilty and accordingly convicted them.
 Case study – II
The CBI has registered two separate cases of bank frauds
worth nearly Rs 2,150 crore and conducted searches at the
premises of the accused individuals and entities at 10
locations in Maharashtra and Gujarat.

On a complaint from State Bank of India (SBI) against a

Mumbai-based private company Ushdev International Ltd
and its directors Suman Vijay Gupta and Prateek Vijay Gupta
besides unknown public servants and unknown others on
the allegations of causing loss of Rs1438.45 crore to SBI and
four other consortium member banks, the CBI registered a
case against them and conducted searches at their premises.

“It was alleged that the said private/borrower

company(engaged in trading of ferrous & non-ferrous metal)
and its Promoter Directors along with unknown entities had
caused loss to State Bank of India and consortium member
banks (Central Bank of India, Indian Overseas Bank, Oriental
Bank of Commerce(now PNB and Bank of Maharashtra)
allegedly by diverting/siphoning off funds, showing sales to
overseas dormant entities, manipulating books of accounts,
etc.,” the CBI said in a statement.

It was also alleged that the accused misappropriated bank

funds by giving advances to the entities which had not
carried out business during the last five to nine years and
provided loans and advances to its related parties.

An alleged loss of Rs.1438.45 crore was caused to SBI and

four other consortium member banks. “Searches were
conducted at three places at the premises of the accused at
Mumbai and Pune (Maharashtra) which led to recovery of
incriminating documents/articles,” the agency said. The
other case was registered against a private company Anil
Ltd., Ahmedabad, six company directors Amol Shripal Sheth,
Kamalbhai R Sheth, Anish Kasturbhai Shah, Indira J Parikh
Dipal Palkhiwala, Anurag Kothawala, Shashin A Desai and
unknown private persons and public servants.

This case was registered on a complaint from Bank of India

on the allegations of bank fraud of Rs 710.85 crores to the
consortium of banks comprising of Bank of India (as the lead
bank), IDBI, SBI, PNB and Shamrao Vithal Cooperative Bank
Ltd. as well as to IFCI Ltd., the CBI said.

It was stated that the said private company was engaged in

the business activity of production of an entire range of
unmodified starch, modified starch from basic maize starch
and downstream products like Liquid Glucose, Dextrose
Monohydrate, Anhydrous Dextrose and Sorbitol. Searches
were conducted at seven locations, including Ahmedabad
and Pune at the premises of the accused which led to
recovery of several incriminating documents, articles, some
property documents and Rs 38 lakh in cash.
What is the punishment for bank fraud in India?

Counterfeiting of bank notes or currency notes under

Section 489 A of the Indian Penal Code, 1860, can cost the
offender with an imprisonment for life, or with
imprisonment of either description for a term which may
extend to ten years, and shall also be liable to fine.

What amount of fraud cases are reported to CBI?

The BSFC is a specialised unit of the Central Bureau of
Investigation (CBI) to probe big-ticket bank fraud cases. The
cases of more than Rs 50 crore should be lodged with the
Joint Director (Policy), CBI, the central bank order said.

Which is the biggest financial frauds in India?

₹22,842 Crores were defrauded over 5 years. ABG Shipyard

took loans from a consortium of banks (28 banks), which
was led by ICICI Bank, IDBI Bank, and later SBI Bank in
2001..
 Bibliography
All the above information is taken from
▪ www.google.com
▪ www.youtube.com
▪ https://www.bankofindia.co.in
▪ https://economictimes.indiatimes.com
▪ https://www.rbi.org.in
▪ https://www.business-standard.com
▪ https://timesofindia.com
▪ https://wikipedia.com
▪ https://byjus.com
▪ https://investopedia.com

!!THANK YOU!!

-SUNIDHI BIHANI