PRESENTATION

ON BANKING
FOR
BUSINESS STUDIES PROJECT
OF
DELHI PUBLIC SCHOOL
BY
RISHIKA DAS NIRAJ TOSNIWAL

RISHI SETHIA RASHIKA SINGH

ROHIT MAHESHWARI
CHIRAGDEEP BASUMATARY
 s.no Topic name Slide no.
1 Introduction 3
2 History of banking 4-12
3 History of banking in India 13-17
4 Banking regulations 18
5 Banking codes and standards 19
6 Banking companies in India 20-21
7 Functions of banks 22-26
8 Types of banks 27-28
9 Importance of banks to (businessmen, 29-30
consumers)
10 Terminologies used 31-32
11 Anecdotes and interesting cases of 33-34
Banking
12 Films of fraud acts with banking 35
companies
13 Analysis of questionnaires 36-43
14 Careers in banking 44
2
15 Globalization in the banking industry 45-48
16 Conclusion 49
 INTRODUCTION
Banking is an industry that manages credit, cash, and other financial
transactions.
In India, a banking company is responsible for transacting all
the business transactions including withdrawal of cheques,
payments, investments, etc.
Banks also help to mobilize the savings of an individual,
making funds accessible to businesses and help them to start a new
venture. Banks help to mobilize the savings of an individual, making
funds accessible to businesses
3
 HISTORY OF BANKING IN
INDIA
• Introduction
• Ancient Origins: Barter system to the need for a medium of
exchange
• Emergence of Early Banking Practices
• Ancient Banking
• Mesopotamia and Ancient Egypt: Temples as early banking
institutions
• Greece and Rome: Development of banking practices, including
moneylenders
4
 • Medieval Banking
PRESENTATION TITLE
• Italian Renaissance: Birth of modern banking in Florence
• The Medici Family: Pioneers in banking and financial services
• The Age of Exploration
• Rise of European Banking: Expansion of trade and exploration
• Development of Bills of Exchange and Banking Houses
• The Birth of Central Banking
• Sweden's Riksbank (1668): The world's first central bank
• Bank of England (1694): The beginning of central banking in England
• Formation of the Federal Reserve in the U.S. (1913)
• 19th Century Banking
• Industrial Revolution: Growth in banking and financial services
5
• Expansion of Banking Networks
 • 20th Century and Beyond
PRESENTATION TITLE
• Global Financial Crises: The Great Depression, 2008 Financial Crisis
• Technological Advances: Introduction of electronic banking and ATMs
• Modern Banking Trends
• Digital Transformation: Online banking, mobile banking
• FinTech Revolution: Emergence of innovative financial technologies
• Regulatory Changes
• Formation of Central Banks worldwide
• Adoption of Basel Accords for international banking standards
• Conclusion
• Evolution from ancient barter systems to modern digital banking
• Ongoing changes and advancements in the banking industry

6
 CURRENT PERIOD IN INDIA
PRESENTATION TITLE

• By 2013, the Indian Banking Industry employed 1,175,149 employees and

had a total of 109,811 branches in India and 171 branches abroad.
• Indian Banks manages an aggregate of ₹67,504.54 billion(US$850 billion)
and bank credit of ₹52,604.54 billion(US$660 billion).
• The net profit of the banks operating in India was ₹1,027.51 billion(US$13
billion) against a turnover of ₹9,148.59 billion(US$110 billion) for the
financial year 2012-13.

7
 RECORD KEEPING
PRESENTATION TITLE

• Ancient civilizations used clay tablets for basic record-keeping.

• Egyptians employed papyrus scrolls for administrative purposes.
• Greeks introduced parchment for more durable records.
• Romans advanced record-keeping with codices and wax tablets.
• Middle Ages saw the rise of paper-based documentation.
• Renaissance brought innovations in bookkeeping and double-entry
accounting.
• 19th century witnessed the advent of filing systems and official archives.
• 20th century marked the shift to electronic and digital record-keeping.
• Today, advanced technologies streamline record management for efficiency
8
and accessibility.
 EARLIEST FORMS OF
PRESENTATION TITLE

• INDIA :
BANKING
• Ancient India had informal banking systems called 'Shroffs' or money
changers.
• Temples and royal treasuries served as early repositories for valuables.
• Indigenous bankers, known as 'Sarraf' or 'Shroff,' facilitated moneylending
and currency exchange.
• Some ancient Indian dynasties issued early forms of coins for trade and
transactions.
• Sanskrit inscriptions mention 'Usury Prohibition Acts,' indicating early
financial regulations.
9
• Traditional hundis (promissory notes) facilitated trade and credit.
• Overall, early banking in India was decentralized, with localized practices
evolving over time.
 • CHINA :
PRESENTATION TITLE
• Ancient China had 'jiaochao,' or exchange certificates, used for trade during
the Tang Dynasty (618–907 AD).
• During the Song Dynasty (960–1279 AD), 'jiaochao' evolved into
government-issued paper money.
• The Chinese also developed 'feiqian,' or flying money, as a form of
promissory note for long-distance trade.
• By the Ming Dynasty (1368–1644 AD), banks called 'qianzhuang' emerged,
specializing in money exchange and deposit services.
• 'Jiaochao' and other early banking practices laid the foundation for China's
later financial innovations.
• EGYPT :
• Ancient Egypt witnessed the emergence of early banking around 2000 BCE.
• The 'Nileometer' was used to assess taxes, contributing to financial record-
10 keeping.
 • Trade networks along the Nile facilitated financial transactions and currency
exchange.
• The ancient Egyptian banking system laid the groundwork for subsequent
financial practices in the region.
• GREECE :
• Ancient Greece featured early banking practices around the 6th century BCE.
• Moneylenders and individuals engaged in financial transactions and currency
exchange.
• Athenian bankers, known as 'trapezitai,' facilitated loans and financial
transactions.
• The concept of credit emerged, with individuals relying on trust for financial
dealings.
• Greek banking laid the foundation for later developments in finance and trade.

11
PRESENTATION TITLE
• ROME :
• Ancient Rome's banking practices evolved during the Republican and Imperial
eras.
• Roman temples also played a role in banking, serving as places for safekeeping
of valuables and deposits.
• Early Roman banking involved moneylenders, known as 'argentarii,' who
conducted financial transactions and provided loans.
• Money-changing tables, known as 'mensarii,' facilitated currency exchange in
marketplaces.
• The concept of promissory notes, called 'codices,' emerged for financial
transactions.
• Roman banking practices influenced later European financial systems.

12
 GROWTH OF BANKING IN INDIA OF
SCHEDULED COMMERCIAL BANKS

credit deposit ratio

80%

70%
number of branches 60%

number of branches 50%

40%

30%
1,09,811
82,897
94,091 20%
70,373 74,653
10%

0%
2005 2007 2009 2011 2013 2005 2007 2009 2011 2013
 BANKING REGULATION
• Regulatory Authority: Reserve Bank of India (RBI)
• Enabling Legislation: Banking Regulation Act, 1949
• RBI's Role
• Formulates and implements monetary policy
• Issues guidelines for banks
• Supervises and regulates banking operations
• Key Legislation
• Banking Regulation Act, 1949
• Provides framework for licensing, management, and operations

14
 • Prudential Norms
• Capital Adequacy Requirements
PRESENTATION TITLE

• Asset Classification and Provisioning Norms

• Priority Sector Lending (PSL)
• Mandates allocation of a percentage of lending to priority sectors
• Promotes inclusive economic growth
• Know Your Customer (KYC)
• Strict norms to prevent money laundering
• Identity and address proofs required for account opening
• Foreign Direct Investment (FDI)
• RBI regulates entry and operations of foreign banks
• Guidelines for FDI in private banks

15
 BANKING CODES AND
STANDARDS
• Emphasis on Ethical Banking Practices
• Codes and Standards for Customer Protection
• Banking Codes
• Code of Bank's Commitment to Customers:
• Ensures fair banking practices
• Transparency and disclosure commitments
• Code of Banks' Commitment to Micro and Small Enterprises:
• Addresses the needs of small businesses
• Encourages responsible lending
• Customer Protection Standards
• Fair Practices Code:
16
• Prescribes fair treatment of customers
• Ensures transparency in transactions
PRESENTATION TITLE • Code of Conduct for Non-Residents:
• Guidelines for banking services for non-resident customers
• Electronic Banking
• Code of Banks' Commitment to Electronic Banking:
• Ensures secure online transactions
• Customer awareness and education
• Code of Conduct for Non-Residents:
• Guidelines for banking services for non-resident customers
• Electronic Banking
• Code of Banks' Commitment to Electronic Banking:
• Ensures secure online transactions
• Customer awareness and education

17
 BANKING COMPANIES IN INDIA
Public sector banks :
Bank name Establishmen Headquarters No. of
t branches
Bank of Baroda 1908 Vadodara, Gujarat 9,693
Bank of India 1906 Mumbai, Maharashtra 5,152
Bank of Maharashtra 1935 Pune, Maharashtra 2,022
Canara bank 1906 Bengaluru, Karnataka 9,677
Central bank of India 1911 Mumbai, Maharashtra 4,608
Indian bank 1907 Chennai, Tamil Nadu 5,787
Indian overseas bank 1937 Chennai, Tamil Nadu 3,217
Punjab and Sind bank 1908 New Delhi 1,526
Punjab national bank 1894 New Delhi 10,769
State bank of India 1955 Mumbai, Maharashtra 22,129
18
Union bank of India 1919 Mumbai, Maharashtra 9,315
 Private sector banks :

Bank name Establishme Headquarters No. of branches

nt
Axis bank 1993 Mumbai, Maharashtra 4,594
Bandhan bank 2015 Kolkata, West Bengal 1,147
City union bank 1904 Kumbakonam, Tamil Nadu 702
Dhanlaxmi bank 1927 Thrissur, Kerala 245
HDFC bank 1994 Mumbai, Maharashtra 7,860
Federal bank 1931 Kochi, Kerala 1,272
ICICI bank 1994 Mumbai, Maharashtra 5,266
IndusInd bank 1994 Mumbai, Maharashtra 2,015
Yes bank 2004 Mumbai, Maharashtra 1,070
IDFC first bank 2015 Mumbai, Maharashtra 707
Kotak Mahindra bank 2003 Mumbai, Maharashtra 1,604
South Indian bank 1929 Thrissur, Kerala 935
19
Nainital bank 1922 Nainital, Uttarakhand 160
Karnataka bank 1924 Mangalore, Karnataka 913
 FUNCTIONS OF BANKS.
There are 2 types of functions of banks:
1. Primary functions
2. Secondary functions

Primary functions : 1) accepting deposits 2)granting of loans and advances

3. Accepting deposits :
A very basic yet important function of all the commercial
banks is mobilizing public funds, providing safe custody of savings and
interest on the savings to depositors. Bank accepts different types of deposits
from the public such as:
• Savings deposit : It encourages saving habits among the public. It is suitable
20 for salary and wage earners. The rate of interest is low. There is no restriction
on the number and amount of withdrawals.
 • Fixed deposits : Money is deposited for a fixed tenure. No withdrawal money
during this period is allowed. In case depositors withdraw before maturity,
banks levy a penalty for premature withdrawal. As a lump of sum amount is
paid at one time for a specific period, the rate of interest is high
• Current deposits : They are opened by businessmen. The account holders get
an overdraft facility on this account. These deposits act as a short term loan to
meet urgent needs. Bank charges a high-interest rate.
• Recurring deposits : A certain sum of money is deposited in the bank at a
regular interval. Money can be withdrawn only after the expiry of a certain
period. A higher rate of interest is paid on recurring deposits.

2. Granting loans and advances : The deposits accepted from the public are
utilised by the banks to advance loans to the businesses and individuals to meet
their uncertainties. Bank charges a higher rate of interest on loans and advances
than what it pays on deposits. Bank offers the following types of loans and
21 advances:
 • Bank overdraft : This facility is for current account holders. It allows holders
to withdraw money anytime more than available in bank balance but up to the
provided limit.
• Cash credit : A short term loan facility given up to a specific limit fixed in
advance. Cash credit is given to any type of account holders and also to those
who do not have an account with a bank. Interest is charged on the amount
withdrawn in excess of the limit.
• Loans : Banks lend money to the customer for short term or medium periods
of say 1 to 5 years against tangible assets. Nowadays, banks do lend money
for the long term. Bank charges interest on the actual amount of loan whether
withdrawn or not. The interest rate is lower than overdrafts and cash credits
facilities.
• Discounting the Bill of Exchange: It is a type of short term loan, where the
seller discounts the bill from the bank for some fees. The bill amount is paid
to the drawer(seller) on behalf of the drawee (buyer) by deducting usual
discount charges.
22
 Secondary functions : 1) Agency functions 2) Utility functions
1. Agency functions :
Banks are the agents for their customers, hence it has to perform various agency
functions as mentioned below:
• Transfer of Funds : Transferring of funds from one branch/place to another.
• Periodic Collections : Collecting dividend, salary, pension, and similar
periodic collections on the clients’ behalf.
• Periodic Payments : Making periodic payments of rents, electricity bills etc on
behalf of the client.
• Collection of Cheques : The bank collects the money of the cheques through
the clearing section of its customers.
• Portfolio Management : It undertakes the activity to purchase and sell the
shares and debentures of the clients and debits or credits the account.
• Other Agency Functions : Under this, bank act as a representative of its clients
23 for other institutions. It acts as an executor, trustee, administrators, advisers,
etc. of the client.
 2. Utility Functions of Bank
• Issuing letters of credit, traveller’s cheque, etc.
• Undertaking safe custody of valuables, important documents, and securities
by providing safe deposit vaults or lockers.
• Providing customers with facilities of foreign exchange dealings
• Underwriting of shares and debentures
• Dealing in foreign exchanges
• Social Welfare programmes
• Project reports
• Standing guarantee on behalf of its customers, etc.

24
 TYPES OF BANKS
Banks can be classified into various types. Given below are the bank types in
India :
1.Commercial Banks: Offer a range of financial services to the public and
businesses.
2.Public Sector Banks: Government-owned banks, e.g., State Bank of India.
3.Private Sector Banks: Privately-owned banks, e.g., HDFC Bank, ICICI
Bank.
4.Cooperative Banks: Serve specific communities or groups, emphasizing
local development.
5.Regional Rural Banks (RRBs): Aim to uplift rural economies through
banking services.
6.Development Banks: Facilitate industrial and economic development, e.g.,
NABARD.
25
7.Foreign Banks: Operate in India but are headquartered in other countries.
PRESENTATION TITLE 8.Small Finance Banks: Focus on financial inclusion, serving small businesses
and low-income groups.
9.Payment Banks: Provide limited banking services, mainly digital and
payment-related.
10. NBFCs (Non-Banking Financial Companies): Provide financial services
but don't hold a banking license.

26
 IMPORTANCE OF BANKS TO
BUSINESSMEN.
• Financing : Bank provides loans and credit to help businesses with capital
• Safety and liquidity : Banks offer a safer place to store funds and easy access
to liquidity, making it convenient for business to manage their cash flow.
• International transactions : Banks facilitate international trade by providing
services like foreign exchange, letters of credit etc.
• Risk management : Banks offer services like insurance and hedging to help
businesses manage financial risks .
• Financial advisory : Many banks have specialized business advisors who can
provide financial and investment guidance.
• Record keeping : Banks maintain detailed investigation records which can be
crucial for businesses accounting and auditing needs.

27
 IMPORTANCE OF BANKS TO
• Safekeeping of money :CONSUMERS.
Banks offer a secure place to store our money,
protecting it from theft and loss.
• Quick access to funds : With direct deposit, we can receive our paycheck
quickly and easily without having to visit a bank branch.
• Convenient transactions : Banks offer a range of services that make financial
transactions easier, such as online banking, mobile banking, and ATMs.
• Insurance protection : Banks offer insurance products that can help protect
your liquid assets from unexpected events such as theft, fire, or natural
disasters.
• Debit and credit card services : Banks offer debit and credit cards that make it
easy to make purchases and manage your finances.
28
• Interest on deposits : Banks pay interest on deposits, allowing you to earn
money on your savings.
 TERMINOLOGIES USED.
• Repo rate : repo rate is an interest rate set by the central bank. Its is the rate at
which the central bank lends money to commercial banks for short term
needs.
• Reverse repo rate : It is the rate at which central bank borrows money from
commercial banks for a short term.
• Cash receive ratio : CRR is the amt. of cash banks need to hold on to without
being allowed to invest or lend it for interest. It is the amt. of capital a bank
has.
• Statutory liquidity ratio : It is the main percentage of deposits that a
commercial bank has to maintain in the form of liquid cash, gold or other
securities
• Automated clearing house : the electronic network used to transfer money
between accounts at different institutions.
29
• Credit card : a card that allows to spend up to a specific limit. Interest on the
bal. is asserted at the end of the monthly term
 • Debit card : A debit card draws the money from checking amt, in contrast to a
credit card where we are borrowing the money and have to pay it back later.
• Capital Gain : It refers to the net profit earned by an investor by selling capital
assets like a house, land, or property at a price that is more than its original
purchase price.
• Certificate of Deposit : It’s a document issued by banks or credit unions
against term deposits opened with them for a fixed tenure with fixed interest
rates.
• Certificate of Release : It’s a certificate issued by a bank or lender mentioning
that a loan has been fully paid and all debts cleared by the borrower.
• Forged Cheque : It’s a cheque on which the drawer or account holder’s
signature is fake.
• IMPS : It stands for immediate payment service that enables you to transfer
funds immediately from one bank account to another bank account opened
with a different bank. It’s an immediate interbank electronic fund transfer
30 facility by using which you can do immediate third-party fund transfers.
 ANECDOTES AND INTERESTING
CASES OF BANKING
- In 2011, investigative agency CBI revealed that executives of certain banks
such as the Bank of Maharashtra, Oriental Bank of Commerce and IDBI created
almost 10,000 fictitious accounts, and an amount of Rs 1.5 billion or Rs 1,500
crore worth loans was transferred.
- Three years later in 2014, Mumbai Police filed nine FIRs against a number of
public sector related to a fixed deposit fraud to the tune of Rs 7 billion
or Rs 700 crore. Apart from that, Bipin Vohra, a Kolkata-based industrialist
allegedly defrauded the Central Bank of India by receiving a loan of Rs 14
billion using forged documents.
- Besides, another scam that was unfolded in 2014 was the bribe-for-loan scam
involving ex-chairman and MD of Syndicate Bank SK Jain for involvement
in sanctioning Rs 80 billion or Rs 8,000 crore.
31
 - In 2015, employees of various banks were involved in a foreign exchange
scam involving a phony Hong Kong corporation. They had defrauded the
systems to move out Rs 60 billion.
- One of the biggest banking frauds of 2016 is the one involving Syndicate
Bank, where almost 380 accounts were opened by four people, who defrauded
the bank of Rs 10 billion using fake cheques.
- Last but not the least in 2018, the fresh bank fraud to the tune of Rs 11,450
crore involving diamond merchant Nirav Modi. It has come to light that the
company, in connivance with retired employees of PNB, got at least 150 Letter
of Undertakings, allowing Nirav Modi Group to defraud the bank and many
other banks who gave loans to him. An Indian Express report says that
in addition to the Rs 11,450 crore, Modi also defrauded 17 other banks
of Rs 3,000 crore. In this case, however, fake LoUs were recycled by the
diamond jewelry group and illegally issued to other banks for borrowing
money. Nirav Modi, his family and partners have fled the country and an
exclusive report by TIMES NOW reveals that he is currently in the United
32 States.
 FILMS DEPICTING PEOPLE COMMITTING
FRAUDULENT ACTS WITH BANKING
COMPANIES
1.Catch Me If You Can (2002): This movie is based on the life of Frank
Abagnale, who posed as a Pan Am pilot, a doctor, and a legal prosecutor while
cashing fraudulent checks worth millions of dollars.
2.The Accountant (2016): This movie follows the story of Christian Wolff, an
accountant who works for criminal organizations and uses his skills to
uncover financial discrepancies in their books
3.Phir Hera Pheri (2006): This movie is about three men who get involved in a
scheme to earn quick money but end up being scammed themselves
4.Bank Chor (2017): This movie is about a group of robbers who plan to loot a
bank but end up getting trapped inside with hostages.
5.Badmaash Company (2010): This movie follows the story of four friends
33 who start a company and use it as a front to conduct illegal activities.
 ANALYSIS FOR THE GIVEN
QUESTIONNAIRE
Banks preferred by customers.
45%

40%

35%

30%

25% in which bank do you have your bank account?

20% 40%
15% 30%
10%

5% 12%
4% 2% 2% 4% 2% 2% 2%
0%
HDFC ICICI SBI PNB Indian Canara ujjivan uco bank of axis
overseas bank baroda

34
 Type of account handled by customers

6%
10%

4%
Saving deposit
Current deposit
Recurring deposit
58% Fixed deposit
22% Multiple option deposit

35
 Facility preferred by consumers

Cash credit
18%

Overdraft Loan
16% 52%

Bank draft
14%

36
 COMPETITIVE INTEREST RATE
PROVIDED BY BANKS ACC. TO
90.00%
CUSTOMERS.
80.00%

70.00%

60.00%

50.00%

40.00%

30.00%

20.00%

10.00%

0.00%
37 HDFC ICICI SBI

YES NO
 The most preferred product or service consumers look
forward to avail from bank
0.45

0.4

0.35

0.3

0.25

0.2

0.15

0.1

0.05

38 0
Home loan Term deposit Investment Insurance
 Transactional method preferred by consumers
eStatements
4%
ATM cards
12%

Telephone banking
10% Online banking
46%

Mobile banking
28%

39
 Factors influencing the choice of consumers for
choosing the banking institution.

6%
22%
16% Interest rates on savings A/c
Low fees and charges
Convenient branch locations
Personal recommendations
others

22%
34%

40
 Most important financial goal right now for
consumers.

16%

10%

58%
16%

41 Saving for a major purchase Building an emergency fund Paying off debt Others
 Investmen
t banker

Loan Accounta
officer nt

Careers in
banking

Banking Bank
associate teller

Financial
analyst
42
 GLOBALIZATION IN THE INDIAN
ECONOMY.
Globalization in India can be traced back to the liberalization of the economy in
the 1990s, along with all the demands of IMF and World Bank included tariff
and subsidies reduction and several other trade liberation measures and
considerable steps to be taken to enable foreign investors and financial
institutions like banks to create a market share in India.
The entry of private banks
In the 1990s new policies for licensing private banks were issued which only
allowed 8 private banks to function and after India’s commitments under WTO.
The foreign banks were allowed to open 12 branches a year, the share of private
bank’s deposits of the total deposits was 4% and it increased to 18% in 2010.
Increase competition
Reduction in entry barriers in the banking sector led to an increase in the
43
number of participants like several new private banks and foreign banks which
led to an increase in efficiency and competition in the market.
 Indian banks become global
Liberalisation has not only provided access to the foreign banks to Indian
market but also provided Indian banks access to foreign banks and an
opportunity to expand their organisation. By 2020 there are in total 136
branches of indian banks at overseas centers with both Bank of Baroda and
State Bank of India having 36 i.e. the highest number of branches. SBI has
branches in 19 countries including Singapore (highest number of branches,6)
the United States of America, South Korea, Belgium, Bangladesh etc. Bank of
Baroda has a considerable overseas presence in 14 countries including the
United States of America, United Arab Emirates, United Kingdom, Singapore,
Thailand, Malaysia, China, Australia etc. It also has subsidiaries in 8 foreign
countries.
Impact on Public Sector banks
Indian Public Sector Banks (PBS) went through sizable changes like
independence in conducting its operations, and the compulsory priority sector
lending was reduced. This enabled the PSBs to look for more commercial
44
viability in their operations The Banking Companies Act 1970/80 amendment
enabled the PSBs to raise funds from the capital market by way of securities or
 Improvement of the banking sector
The entry of well established foreign banks and private banks established by
huge corporates raised the level of services provided to the customers and
forced the existing banks to raise their services to the same level as well.
Introduction of IBC
A recent and one of the largest reforms in the banking sector is the introduction
of Insolvency and Bankruptcy Code, 2016. The legislation particularly deals
with corporate insolvency and one of its major objectives was to provide ease
and faster exit for the businesses. Globalization only allows the investors to
invest internationally but the choice of where to invest resides on the investors
themselves. As a result, there is a competition among the countries to make
their markets the best option for the investors. Therefore, there was a clear need
to simplify and consolidate the insolvency and bankruptcy law particularly for
body corporates to increase foreign investment. The code was proved useful in
inviting new investments in the market and increasing India’s international
45 position in the World Bank’s Ease in Doing Business, in 2015 the ranking was
142nd and within five years of functioning of the Code the country is on 63rd
position.
 The decrease in MSME lending
The impact of globalization was unsettling on the MSME sector of the country
due to their lack of resources and smaller scale of operations it was difficult to
compete with the global players. MSMEs are not only important in a country
for the creation of employment and domestic production but also for the
banking sector as a considerable portion of lending used to be facilitated to
MSMEs, however that has reduced. According to the RBI Report on MSMEs,
the demand for credit by MSMEs is estimated to be 37 trillion and the overall
supply is 14.5 trillion thus there is an estimated gap of 20-25 trillion.

To sum up it can be stated globalization has aided the development of the Indian
banking sector and increased the efficiency and profitability in a manifold
manner, by providing more autonomy and less government regulation in the
sector. However the same is not devoid of challenges which are to be faced by
increased competition and disparity in the scale of operations.
46
 CONCLUSION
In Conclusion, banking holds a crucial role in our day-to-day life.
We must be responsible citizens to the banking system. The banking
system acts as a crucial base for the financial system as well as the
entire economic system of the country. It provides a base to the
market and the companies. Banking has reduced problems like
geographical barriers, lack of infrastructure, cost, difficulty in
obtaining loans and time consumption.
Therefore, we can say that it is the source of channeling the
finance by the people of the country.

47
48