Book Title: Fundamentals of Banking
Author(s): Dr Swapna and V Sakunthala
Summary:
This book provides a comprehensive overview of the foundational concepts and functions of the banking system, especially in the Indian context. It is designed for students and beginners in banking and finance.
Key Topics Covered:
1. Meaning and Origin of the Word 'Bank'
Derived from the Italian word “Banca” meaning bench.
Refers to early moneylenders who operated from benches.
2. Evolution of Banking in India
Started with indigenous banking practices.
Milestones include the establishment of Bank of Hindustan (1770), Presidency Banks, and the formation of Reserve Bank of India (1935).
Nationalization of banks in 1969 and 1980 marked significant changes.
3. Types of Banks
Commercial Banks
Cooperative Banks
Development Banks
Regional Rural Banks
Foreign Banks
Small Finance and Payments Banks
4. Banking System and Structure in India
Central Bank (RBI) at the apex.
Scheduled and Non-Scheduled Banks.
Public, Private, and Cooperative sectors.
5. Commercial Banks: Meaning & Functions
Accepting deposits, granting loans, remittance facilities, credit creation, etc.
6. Credit Creation
Process by which banks multiply deposits through lending.
Essential for economic development.
7. Unit Banking vs Branch Banking
Unit Banking: Operates from a single location.
Branch Banking: Operates from multiple branches.
8. Central Banking and RBI
RBI as the central bank of India.
Functions: issuing currency, monetary policy, lender of last resort, etc.
9. Credit Control Mechanisms
Quantitative Controls: Bank rate, CRR, SLR, Open Market Operations.
Qualitative Controls: Moral suasion, selective credit control.
10. History of Reserve Bank of India
Established in 1935, nationalized in 1949.
Regulator of the Indian financial system.
11. Specialized Banking Types
Investment Banking: Assists in raising capital, mergers, IPOs.
Indigenous Banking: Traditional banking by moneylenders, shroffs.
12. Innovations in Banking
Core banking, internet and mobile banking, UPI, payment gateways.
13. Banker-Customer Relationship
General Relationship: Debtor-Creditor, Agent-Principal.
Special Relationship: Obligation to honor cheques, maintain secrecy, etc.
14. Types of Customers
Individuals, joint accounts, firms, companies, trusts, etc.
15. Know Your Customer (KYC) Norms
Regulatory compliance to verify identity, prevent money laundering.
16. Collecting Banker – Duties & Responsibilities
Ensures proper collection of cheques and other instruments.
17. Holder for Value vs Holder in Due Course
Legal positions related to negotiable instruments.
18. Statutory Protection to Collecting Banker
Provided if collection is in good faith and without negligence.
19. Paying Banker – Responsibilities
Must honor valid cheques, verify signature and funds, etc.
20. Payment Gateways
Digital infrastructure for processing online payments.
Conclusion:
This book gives a detailed insight into the core concepts, regulatory framework, and operational dynamics of banking. It is especially useful for commerce students, banking aspirants, and anyone looking to understand the Indian banking system.
Comments
Post a Comment