Banking in India

Structure of the organised banking sector in India. Number of banks are in brackets.

Banking in India in the modern sense originated in the last decades of the 18th century. The first
banks were Bank of Hindustan (1770-1829) and The General Bank of India, established 1786 and
since defunct.
The largest bank, and the oldest still in existence, is the State Bank of India, which originated in
the Bank of Calcutta in June 1806, which almost immediately became the Bank of Bengal. This was
one of the three presidency banks, the other two being the Bank of Bombay and the Bank of
Madras, all three of which were established under charters from the British East India Company. The
three banks merged in 1921 to form theImperial Bank of India, which, upon India's independence,
became the State Bank of India in 1955. For many years the presidency banks acted as quasicentral banks, as did their successors, until the Reserve Bank of India was established in 1935.
In 1969 the Indian government nationalised all the major banks that it did not already own and these
have remained under government ownership. They are run under a structure known as 'profitmaking public sector undertaking' (PSU) and are allowed to compete and operate as commercial
banks. The Indian banking sector is made up of four types of banks, as well as the PSUs and the

state banks, they have been joined since the 1990s by new private commercial banks and a number
of foreign banks.
Generally banking in India was fairly mature in terms of supply, product range and reach-even
though reach in rural India and to the poor still remains a challenge. The government has developed
initiatives to address this through the State Bank of India expanding its branch network and through
the National Bank for Agriculture and Rural Development with things like microfinance. This also
included the 2014 plan by the then prime minister to bring bank accounts to the estimated 40% of
the population that were still unbanked.[1]
Contents
[hide]

1 History
o

1.1 Colonial era

1.2 Post-Independence

1.3 Nationalization in the 1960s

1.4 Liberalization in the 1990s

2 Current period

3 Adoption of banking technology

o

3.1 Expansion of banking infrastructure

4 Further reading

5 See also

6 References

7 External links

History[edit]
In ancient India there is evidence of loans from the Vedic period (beginning 1750 BC).[2][3] Later
during the Maurya dynasty (321 to 185 BC), an instrument calledadesha was in use, which was an

order on a banker desiring him to pay the money of the note to a third person, which corresponds to
the definition of a bill of exchange as we understand it today. During the Buddhist period, there was
considerable use of these instruments. Merchants in large towns gave letters of credit to one
another.[4]

Colonial era[edit]
During the period of British rule merchants established the Union Bank of Calcutta in 1829, first as a
private joint stock association, then partnership. Its proprietors were the owners of the earlier
Commercial Bank and the Calcutta Bank, who by mutual consent created Union Bank to replace
these two banks. In 1840 it established an agency at Singapore, and closed the one at Mirzapore
that it had opened in the previous year. Also in 1840 the Bank revealed that it had been the subject
of a fraud by the bank's accountant. Union Bank was incorporated in 1845 but failed in 1848, having
been insolvent for some time and having used new money from depositors to pay its dividends. [5]
The Allahabad Bank, established in 1865 and still functioning today, is the oldest Joint Stock bank in
India, it was not the first though. That honour belongs to the Bank of Upper India, which was
established in 1863, and which survived until 1913, when it failed, with some of its assets and
liabilities being transferred to theAlliance Bank of Simla.
Foreign banks too started to appear, particularly in Calcutta, in the 1860s. The Comptoir d'Escompte
de Paris opened a branch in Calcutta in 1860, and another inBombay in 1862; branches
in Madras and Pondicherry, then a French possession, followed. HSBC established itself
in Bengal in 1869. Calcutta was the most active trading port in India, mainly due to the trade of
the British Empire, and so became a banking centre.
The first entirely Indian joint stock bank was the Oudh Commercial Bank, established in 1881
in Faizabad. It failed in 1958. The next was the Punjab National Bank, established in Lahore in 1894,
which has survived to the present and is now one of the largest banks in India.
Around the turn of the 20th Century, the Indian economy was passing through a relative period of
stability. Around five decades had elapsed since the Indian Mutiny, and the social, industrial and
other infrastructure had improved. Indians had established small banks, most of which served
particular ethnic and religious communities.
The presidency banks dominated banking in India but there were also some exchange banks and a
number of Indian joint stock banks. All these banks operated in different segments of the economy.
The exchange banks, mostly owned by Europeans, concentrated on financing foreign trade. Indian
joint stock banks were generally under capitalised and lacked the experience and maturity to
compete with the presidency and exchange banks. This segmentation let Lord Curzon to
observe, "In respect of banking it seems we are behind the times. We are like some old fashioned
sailing ship, divided by solid wooden bulkheads into separate and cumbersome compartments."
The period between 1906 and 1911, saw the establishment of banks inspired by
the Swadeshi movement. The Swadeshi movement inspired local businessmen and political figures
to found banks of and for the Indian community. A number of banks established then have survived

to the present such as Bank of India, Corporation Bank, Indian Bank, Bank of Baroda, Canara
Bank and Central Bank of India.
The fervour of Swadeshi movement lead to establishing of many private banks in Dakshina
Kannada and Udupi district which were unified earlier and known by the name South
Canara ( South Kanara ) district. Four nationalised banks started in this district and also a leading
private sector bank. Hence undivided Dakshina Kannada district is known as "Cradle of Indian
Banking".
During the First World War (19141918) through the end of the Second World War (19391945),
and two years thereafter until the independence of India were challenging for Indian banking. The
years of the First World War were turbulent, and it took its toll with banks simply collapsing despite
the Indian economy gaining indirect boost due to war-related economic activities. At least 94 banks
in India failed between 1913 and 1918 as indicated in the following table:

Years

Number of banks
that failed

Authorised Capital
( Lakhs)

Paid-up Capital
( Lakhs)

1913

12

274

35

1914

42

710

109

1915

11

56

1916

13

231

1917

76

25

1918

209

Post-Independence[edit]
The partition of India in 1947 adversely impacted the economies of Punjab and West Bengal,
paralysing banking activities for months. India's independence marked the end of a regime of
the Laissez-faire for the Indian banking. The Government of India initiated measures to play an
active role in the economic life of the nation, and the Industrial Policy Resolution adopted by the
government in 1948 envisaged a mixed economy. This resulted into greater involvement of the state
in different segments of the economy including banking and finance. The major steps to regulate
banking included:

The Reserve Bank of India, India's central banking authority, was established in April 1935,
but was nationalised on 1 January 1949 under the terms of the Reserve Bank of India (Transfer
to Public Ownership) Act, 1948 (RBI, 2005b).[6]

In 1949, the Banking Regulation Act was enacted which empowered the Reserve Bank of
India (RBI) "to regulate, control, and inspect the banks in India".

The Banking Regulation Act also provided that no new bank or branch of an existing bank
could be opened without a license from the RBI, and no two banks could have common
directors.

Nationalization in the 1960s[edit]

Despite the provisions, control and regulations of the Reserve Bank of India, banks in India except
the State Bank of India (SBI), continued to be owned and operated by private persons. By the
1960s, the Indian banking industry had become an important tool to facilitate the development of
the Indian economy. At the same time, it had emerged as a large employer, and a debate had
ensued about the nationalization of the banking industry. Indira Gandhi, the then Prime Minister of
India, expressed the intention of the Government of India in the annual conference of the All India
Congress Meeting in a paper entitled "Stray thoughts on Bank Nationalization."[7] The meeting
received the paper with enthusiasm.
Thereafter, her move was swift and sudden. The Government of India issued an ordinance ('Banking
Companies (Acquisition and Transfer of Undertakings) Ordinance, 1969') and nationalised the 14
largest commercial banks with effect from the midnight of 19 July 1969. These banks contained 85
percent of bank deposits in the country.[7] Jayaprakash Narayan, a national leader of India, described
the step as a "masterstroke of political sagacity." Within two weeks of the issue of the ordinance,
the Parliament passed the Banking Companies (Acquisition and Transfer of Undertaking) Bill, and it
received the presidential approval on 9 August 1969.
A second dose of nationalisation of 6 more commercial banks followed in 1980. The stated reason
for the nationalisation was to give the government more control of credit delivery. With the second
dose of nationalisation, the Government of India controlled around 91% of the banking business of
India. Later on, in the year 1993, the government merged New Bank of India with Punjab National
Bank.[8] It was the only merger between nationalised banks and resulted in the reduction of the
number of nationalised banks from 20 to 19. After this, until the 1990s, the nationalised banks grew
at a pace of around 4%, closer to the average growth rate of the Indian economy.

Liberalization in the 1990s[edit]

In the early 1990s, the then government embarked on a policy of liberalization, licensing a small
number of private banks. These came to be known as New Generation tech-savvy banks, and
included Global Trust Bank (the first of such new generation banks to be set up), which later
amalgamated with Oriental Bank of Commerce, UTI Bank (since renamed Axis Bank), ICICI

Bank and HDFC Bank. This move, along with the rapid growth in the economy of India, revitalised
the banking sector in India, which has seen rapid growth with strong contribution from all the three
sectors of banks, namely, government banks, private banks and foreign banks.
The next stage for the Indian banking has been set up with the proposed relaxation in the norms for
foreign direct investment, where all foreign investors in banks may be given voting rights which could
exceed the present cap of 10% at present. It has gone up to 74% with some restrictions.
The new policy shook the Banking sector in India completely. Bankers, till this time, were used to the
464 method (borrow at 4%; lend at 6%; go home at 4) of functioning. The new wave ushered in a
modern outlook and tech-savvy methods of working for traditional banks. All this led to the retail
boom in India. People demanded more from their banks and received more.

Current period[edit]
All banks which are included in the Second Schedule to the Reserve Bank of India Act, 1934 are
Scheduled Banks. These banks comprise Scheduled Commercial Banks and Scheduled Cooperative Banks. Scheduled Commercial Banks in India are categorised into five different groups
according to their ownership and/or nature of operation. These bank groups are:

State Bank of India and its Associates

Nationalised Banks

Private Sector Banks

Foreign Banks

Regional Rural Banks.

In the bank group-wise classification, IDBI Bank Ltd. is included in Nationalised Banks. Scheduled
Co-operative Banks consist of Scheduled State Co-operative Banks and Scheduled Urban
Cooperative Banks.

Growth of Banking in India of Scheduled Commercial Banks [9]

In
di
ca
to
rs

31 March of

2005

2006

2007

2008

2009

2010

2011

2012

Num
ber
of
Com
merc
ial
Bank
s

284

218

178

169

166

163

163

Num
ber
of
Bran
ches

70,373

72,072

74,653

78,787

82,897

88,203

94,019

16

16

15

15

15

14

13

Popul
ation
per
Bank
s (in

2013

169

151

102,37
109,811
7

13

12

thousa
nds)

67504.
Aggr
17002 21090 26119 31969 38341 44928 52078 59091
egat
54
billion(U billion(U billion(U billion(U billion(U billion(U billion(U billion(U
e
billion(U
S$280 S$340 S$420 S$520 S$620 S$730 S$840 b S$960
Depo
S$1.1 tr
billion) billion) billion) billion) billion) billion)
illion) billion)
sits
illion)

Bank
Credi

11004

15071

19312

23619

27755

32448

39421

46119

52605

Growth of Banking in India of Scheduled Commercial Banks [9]

In
di
ca
to
rs

Depo
sit as
perc
enta
ge
toGN
P (at

31 March of

2005

2006

2007

2008

2009

2010

2011

2012

2013

billion(U billion(U billion(U billion(U billion(U billion(U billion(U billion(U billion(U

S$180 S$240 S$310 S$380 S$450 S$530 S$640 b S$750 S$850 b
billion) billion) billion) billion) billion) billion)
illion) billion)
illion)

62%

64%

69%

73%

77%

78%

78%

78%

79%

factor
cost)

Per
Capit 16281( 19130( 23382( 28610( 33919( 39107( 45505( 50183( 56380(
a
US$260 US$310 US$380 US$460 US$550 US$630 US$740 US$810 US$910
Depo
)
)
)
)
)
)
)
)
)
sit

Per
Capit 10752( 13869( 17541( 21218( 24617( 28431( 34187( 38874( 44028(
a
US$170 US$220 US$280 US$340 US$400 US$460 US$550 US$630 US$710
Credi
)
)
)
)
)
)
)
)
)
t

Credi
t
Depo
sit
Ratio

63%

70%

74%

75%

74%

74%

76%

79%

79%

By 2010, banking in India was generally fairly mature in terms of supply, product range and reacheven though reach in rural India still remains a challenge for the private sector and foreign banks. In
terms of quality of assets and capital adequacy, Indian banks are considered to have clean, strong
and transparent balance sheets relative to other banks in comparable economies in its region. The
Reserve Bank of India is an autonomous body, with minimal pressure from the government.
With the growth in the Indian economy expected to be strong for quite some time-especially in its
services sector-the demand for banking services, especially retail banking, mortgages and
investment services are expected to be strong. One may also expect M&As, takeovers, and asset
sales.
In March 2006, the Reserve Bank of India allowed Warburg Pincus to increase its stake in Kotak
Mahindra Bank (a private sector bank) to 10%. This is the first time an investor has been allowed to
hold more than 5% in a private sector bank since the RBI announced norms in 2005 that any stake
exceeding 5% in the private sector banks would need to be vetted by them.
In recent years critics have charged that the non-government owned banks are too aggressive in
their loan recovery efforts in connexion with housing, vehicle and personal loans. There are press
reports that the banks' loan recovery efforts have driven defaulting borrowers to suicide. [10][11][12]
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 and manages an aggregate deposit of 67504.54
billion (US$1.1 trillion or 840 billion) and bank credit of 52604.59 billion (US$850 billion or
650 billion). The net profit of the banks operating in India was 1027.51 billion (US$17 billion or
13 billion) against a turnover of 9148.59 billion (US$150 billion or 110 billion) for the financial
year 2012-13.[9]

Adoption of banking technology[edit]

The IT[clarification needed] revolution has had a great impact on the Indian banking system. The use of
computers has led to the introduction of online banking in India. The use of computers in the banking
sector in India has increased many fold after the economic liberalisation of 1991 as the country's
banking sector has been exposed to the world's market. Indian banks were finding it difficult to
compete with the international banks in terms of customer service, without the use of information
technology.
The RBI set up a number of committees to define and co-ordinate banking technology. These have
included:

In 1984 was formed the Committee on Mechanisation in the Banking Industry (1984)
[13]

whose chairman was Dr. C Rangarajan, Deputy Governor, Reserve Bank of India. The major

recommendations of this committee were introducing MICR technology in all the banks in the
metropolises in India.[14] This provided for the use of standardized cheque forms and encoders.

In 1988, the RBI set up the Committee on Computerisation in Banks (1988) [15] headed by Dr.
C Rangarajan. It emphasized that settlement operation must be computerized in the clearing
houses of RBI in Bhubaneshwar, Guwahati, Jaipur, Patna and Thiruvananthapuram. It further
stated that there should be National Clearing of intercity cheques at Kolkata, Mumbai, Delhi, Chennai and MICR should be made operational. It also
focused on computerisation of branches and increasing connectivity among branches through
computers. It also suggested modalities for implementing on-line banking. The committee
submitted its reports in 1989 and computerisation began from 1993 with the settlement between
IBA and bank employees' associations.[16]

In 1994, the Committee on Technology Issues relating to Payment systems, Cheque

Clearing and Securities Settlement in the Banking Industry (1994)[17] was set up under Chairman
W S Saraf. It emphasized Electronic Funds Transfer (EFT) system, with the BANKNET
communications network as its carrier. It also said that MICR clearing should be set up in all
branches of all those banks with more than 100 branches.

In 1995, the Committee for proposing Legislation on Electronic Funds Transfer and other
Electronic Payments (1995)[18] again emphasized EFT system.[16]

The total number of automated teller machines (ATMs) installed in India by various banks as of end
June 2012 is 99,218.[19] The new private sector banks in India have the most ATMs, followed by offsite ATMs belonging to SBI and its subsidiaries and then by nationalised banks and foreign banks,
while on-site is highest for the nationalised banks of India. [16]

Branches and ATMs of Scheduled Commercial Banks as of end March

2005[16]

Bank type

Number of
branches

On-site
ATMs

Off-site
ATMs

Total
ATMs

Nationalised banks

33,627

38,606

22,265

60,871

State Bank of India

13,661

28,926

22,827

51,753

Branches and ATMs of Scheduled Commercial Banks as of end March

2005[16]

Bank type

Number of
branches

On-site
ATMs

Off-site
ATMs

Total
ATMs

Old private sector

banks

4,511

4,761

4,624

9,385

New private sector

banks

1,685

12,546

26,839

39,385

242

295

854

1,149

Foreign banks

TOTAL

53,726

85,134

77,409

1,62,543

Expansion of banking infrastructure[edit]

Physical as well as virtual expansion of banking through mobile banking, internet banking, tele
banking, bio-metric and mobile ATMs is taking place [20] since last decade and has gained
momentum in last few years. As per the census of 2011, 58.7% of households are availing banking
services in the country. There are 102,343 branches of Scheduled Commercial Banks (SCBs) in the
country, out of which 37,953 (37%) bank branches are in the rural areas and 27,219 (26%) in semiurban areas, constituting 63% of the total numbers of branches in semi-urban and rural areas of the
country. However, a significant proportion of the households, especially in rural areas, are still
outside the formal fold of the banking system. To extend the reach of banking to those outside the
formal banking system, Government and Reserve Bank of India (RBI) are taking various initiatives
from time to time some of which are enumerated below:

Opening of bank branches: Government had issued detailed strategy and guidelines on
Financial Inclusion in October 2011, advising banks to open branches in all habitations of 5,000
or more population in under-banked districts and 10,000 or more population in other districts.
Out of 3,925 such identified villages/habitations, branches have been opened in 3,402
villages/habitations (including 2,121 Ultra Small Branches) by end of April, 2013.

Each household to have at least one bank account: Banks have been advised to ensure
service area bank in rural areas and banks assigned the responsibility in specific wards in urban
area to ensure that every household has at least one bank account.

Business Correspondent model: With the objective of ensuring greater financial inclusion
and increasing the outreach of the banking sector, banks were permitted by RBI in 2006 to use
the services of intermediaries in providing financial and banking services through the use of
Business Facilitators (BFs) and Business Correspondents (BCs). Business correspondents are
retail agents engaged by banks for providing banking services at locations other than a bank
branch/ATM. BCs and the BC agents (BCAs) represent the bank concerned and enable a bank
to expand its outreach and offer limited range of banking services at low cost, particularly where
setting up a brick and mortar branch is not viable. BCs as agents of the banks, thus, are an
integral part of the business strategy for achieving greater financial inclusion. Banks had been
permitted to engage individuals/entities as BC like retired bank employees, retired teachers,
retired government employees, ex-servicemen, individual owners of kirana/medical/fair price
shops, individual Public Call Office (PCO) operators, agents of Small Savings Schemes of
Government of India, insurance companies, etc. Further, since September 2010, RBI had
permitted banks to engage "for profit" companies registered under the Indian Companies Act,
1956, excluding Non-Banking Financial Companies (NBFCs), as BCs in addition to
individuals/entities permitted earlier. According to the data maintained by RBI, as in December,
2012, there were over 152,000 BCs deployed by Banks. During 2012-13, over 183.8 million
transactions valued at 165 billion (US$2.7 billion) had been undertaken by BCs till December
2012.

Swabhimaan Campaign: Under "Swabhimaan" - the Financial Inclusion Campaign launched

in February 2011, banks had provided banking facilities by March, 2012 to over 74,000
habitations having population in excess of 2000 using various models and technologies
including branchless banking through Business Correspondents Agents (BCAs). Further, in
terms of Finance Minister's Budget Speech 2012-13, the "Swabhimaan" campaign has been
extended to habitations with population of more than 1,000 in North Eastern and Hilly States and
to habitations which have crossed population of 1,600 as per census 2001. About 40,000 such
habitations have been identified to be covered under the extended "Swabhimaan" campaign.

Setting up of ultra-small branches (USBs): Considering the need for close supervision and
mentoring of the Business Correspondent Agents (BCAs) by the respective banks and to ensure
that a range of banking services are available to the residents of such villages, Ultra Small

Branches (USBs) are being set up in all villages covered through BCAs under Financial
Inclusion. A USB would comprise a small area of 100 sq ft (9.3 m2) - 200 sq ft (19 m2) where the
officer designated by the bank would be available with a laptop on pre-determined days. While
the cash services would be offered by the BCAs, the bank officer would offer other services,
undertake field verification and follow up on the banking transactions. The periodicity and
duration of visits can be progressively enhanced depending upon business potential in the area.
A total of over 50,000 USBs have been set up in the country by March 2013.

Banking facilities in Unbanked Blocks: All the 129 unbanked blocks (91 in North East States
and 38 in other States) identified in the country in July 2009, had been provided with banking
facilities by March 2012, either through Brick Mortar Branch or Business Correspondents or
Mobile van. As a next step it has been advised to cover all those blocks with BCA and Ultra
Small Branch which have so far been covered by mobile van only.

USSD Based Mobile Banking: National Payments Corporation of India (NPCI) worked upon
a "Common USSD Platform" for all banks and telcos who wish to offer the facility of Mobile
Banking using Unstructured Supplementary Service Data (USSD) based Mobile Banking. The
Department helped NPCI to get a common USSD Code *99# for all telcos. More than 20 banks
have joined the National Uniform USSD Platform (NUUP) of NPCI and the product has been
launched by NPCI with BSNL and MTNL. Other telcos are likely to join in the near future. USSD
based Mobile Banking offers basic Banking facilities like Money Transfer, Bill Payments, Balance
Enquiries, Merchant Payments etc. on a simple GSM based Mobile phone, without the need to

download application on a phone as required at present in the IMPS based Mobile Banking.
Steps taken by Reserve Bank of India (RBI) to strengthen the banking infrastructure

RBI has permitted domestic Scheduled Commercial Banks (excluding RRBs) to open
branches in tier 2 to tier 6 cities (with population up to 99,999 as per census 2001) without the
need to take permission from RBI in each case, subject to reporting.

RBI has also permitted SCBs (excluding RRBs) to open branches in rural, semi-urban and
urban centres in North Eastern States and Sikkim without having the need to take permission
from RBI in each case, subject to reporting.

Regional Rural Banks (RRBs) are also allowed to open branches in Tier 2 to Tier 6 centres
(with population up to 99,999 as per Census 2001) without the need to take permission from RBI
in each case, subject to reporting, provided they fulfill the following conditions, as per the latest
inspection report:

CRAR of at least 9%;

Net NPA less than 5%;

No default in CRR / SLR for the last year;

Net profit in the last financial year;

CBS compliant.
Domestic SCBs have been advised that while preparing their Annual Branch Expansion Plan

(ABEP), they should allocate at least 25% of the total number of branches proposed to be
opened during the year in unbanked Tier 5 and Tier 6 centres i.e. (population up to 9,999)
centres which do not have a brick and mortar structure of any SCB for customer based banking
transactions.

RRBs have also been advised to allocate at least 25% of the total number of branches
proposed to be opened during a year in unbanked rural (Tier 5 and Tier 6) Centres).

New private sector banks are required to ensure that at least 25% of their total branches are
in semi-urban and rural centres on an ongoing basis.

Further reading[edit]

The Evolution of the State Bank of India (The Era of the Imperial Bank of India, 1921
1955) (Volume III)

Banking Frontiers a monthly magazine, published by Mumbai based Glocal Infomart. Editor

See also[edit]

List of banks in India

History of banking

Common Recruitment to Indian Banks through IBPS

List of banks in India

From Wikipedia, the free encyclopedia

This is a partial list of corporations engaged in banking business within the territory of India. There
are currently nationalised banks in India.
Contents
[hide]

1 Nationalised banks / Public-sector banks

o

1.1 SBI and associate banks

2 Regional rural banks

3 Private-sector banks

4 Foreign banks operating in India

5 Foreign banks with business in India

6 Foreign banks with representative offices in India

7 Indian banks with business outside India

8 See also

9 References

10 External links

Nationalised banks / Public-sector banks[edit]

1. Allahabad Bank
2. Andhra Bank
3. Bank of India
4. Bank of Maharashtra
5. Bhartiya Mahila Bank
6. Canara Bank
7. Central Bank of India
8. Corporation Bank
9. Dena Bank
10.IDBI Bank
11. Indian Bank
12.Indian Overseas Bank
13.Oriental Bank of Commerce
14.Punjab National Bank
15.Punjab & Sind Bank
16.Syndicate Bank
17.UCO Bank
18.Bank of Baroda
19.Union Bank of India
20.United Bank of India
21.Vijaya Bank

SBI and associate banks[edit]

1. State Bank of India
2. State Bank of Bikaner & Jaipur

3. State Bank of Hyderabad

4. State Bank of Mysore
5. State Bank of Patiala
6. State Bank of Travancore
7. State Bank of Saurashtra (merged into SBI in 2008)
8. State Bank of Indore (merged into SBI in 2010)

Regional rural banks[edit]

1. Allahabad UP Gramin Bank
2. Andhra Pradesh Grameena Vikas Bank
3. Andhra Pragathi Grameena Bank
4. Arunachal Pradesh Rural Bank
5. Aryavart Gramin Bank
6. Assam Gramin Vikash Bank
7. Ballia Etawah Gramin Bank
8. Bangiya Gramin Vikash Bank
9. Baroda Gujarat Gramin Bank
10.Baroda Rajasthan Gramin Bank
11. Baroda Uttar Pradesh Gramin Bank
12.Bihar Kshetriya Gramin Bank
13.Cauvery Kalpatharu Grameena Bank
14.Chaitanya Godavari Grameena Bank
15.Chhattisgarh Gramin Bank
16.Chikmagalur-Kodagu Grameena Bank
17.Deccan Grameena Bank

18.Dena Gujarat Gramin Bank

19.Durg-Rajnandgaon Gramin Bank
20.Ellaquai Dehati Bank
21.Gurgaon Gramin Bank
22.Hadoti Kshetriya Gramin Bank
23.Haryana Gramin Bank
24.Himachal Gramin Bank
25.Jaipur Thar Gramin Bank
26.Jhabua Dhar Kshetriya Gramin Bank
27.Jharkhand Gramin Bank
28.Karnataka Vikas Grameena Bank
29.Kashi Gomti Samyut Gramin Bank
30.Kerala Gramin Bank
31.Krishna Grameena BankMerged in pragati grameena bank
32.Kshetriya Kisan Gramin Bank
33.Langpi Dehangi Rural Bank
34.Madhumalti Building Gupte Marg
35.Madhya Bharat Gramin Bank
36.Madhya Bihar Gramin Bank
37.Mahakaushal Kshetriya Gramin Bank
38.Maharashtra Gramin Bank
39.Malwa Gramin Bank
40.Manipur Rural Bank
41.Marwar Ganganagar Bikaner Gramin Bank
42.Meghalaya Rural Bank

43.Mewar Anchalik Gramin Bank

44.Mizoram Rural Bank
45.Nagaland Rural Bank
46.Uttrakhand Gramin Bank[1]
47.Narmada Malwa Gramin Bank
48.Odisha Gramya Bank
49.Pallavan Grama Bank
50.Pandyan Grama Bank
51.Parvatiya Gramin Bank
52.Paschim Banga Gramin Bank
53.Pragathi krishna Gramin Bank
54.Prathama Bank
55.Puduvai Bharathiar Grama Bank
56.Pune District Central Cooperative Bank Ltd.
57.Punjab Gramin Bank
58.Purvanchal Gramin Bank
59.Rajasthan Gramin Bank
60.Rewa-Sidhi Gramin Bank
61.Rushikulya Gramya Bank
62.Samastipur Kshetriya Gramin Bank
63.Saptagiri Grameena Bank
64.Sarva UP Gramin Bank
65.Satpura Narmada Kshetriya
66.Saurashtra Gramin Bank
67.Sharda Gramin Bank

68.Shreyas Gramin Bank

69.Surguja Kshetriya Gramin Bank
70.Sutlej Kshetriya Gramin Bank
71.Tripura Gramin Bank
72.Uttar Banga Kshetriya Gramin Bank
73.Uttar Bihar Gramin Bank
74.Vananchal Gramin Bank
75.Vidharbha Kshetriya Gramin Bank
76.Visveshvaraya Grameena Bank
77.Wainganga Krishna Gramin Bank
[2]

Private-sector banks[edit]
1. Axis Bank
2. Catholic Syrian Bank
3. City Union Bank
4. Development Credit Bank
5. Dhanlaxmi Bank
6. Federal Bank
7. HDFC Bank
8. ICICI Bank
9. IndusInd Bank
10.ING Vysya Bank
11. Karnataka Bank
12.Karur Vysya Bank
13.Kotak Mahindra Bank

14.Lakshmi Vilas Bank

15.RBL Bank
16.Nainital Bank
17.Tamilnadu Mercantile Bank
18.South Indian Bank
19.YES Bank
Shivalik bank

Foreign banks operating in India[edit]

1. Abu Dhabi Commercial Bank
2. Australia and New Zealand Bank
3. Bank Internasional Indonesia
4. Bank of America NA
5. Bank of Bahrain and Kuwait
6. Bank of Ceylon
7. Bank of Nova Scotia (Scotia Bank)
8. Bank of Tokyo Mitsubishi UFJ
9. Barclays Bank PLC
10.BNP Paribas
11. Calyon Bank
12.Chinatrust Commercial Bank
13.Citibank N.A.
14.Credit Suisse
15.Commonwealth Bank of Australia (Recently Launched Retail Services in Mumbai)
16.DBS Bank

17.DCB Bank now RHB Bank

18.Deutsche Bank AG
19.FirstRand Bank
20.HSBC
21.JPMorgan Chase Bank
22.Krung Thai Bank
23.Mashreq Bank psc
24.Mizuho Corporate Bank
25.Royal Bank of Scotland
26.Shinhan Bank
27.Socit Gnrale
28.Sonali Bank
29.Standard Chartered Bank
30.State Bank of Mauritius
31.UBS
32.Woori Bank.[3]

Foreign banks with business in India[edit]

Banks with branches in India.[4]
1. ABN AMRO Bank N.V. - Royal Bank of Scotland
2. Abu Dhabi Commercial Bank
3. American Express Bank
4. Antwerp Diamond Bank
5. Arab Bangladesh Bank
6. Bank International Indonesia

7. Bank of America
8. Bank of Bahrain and Kuwait
9. Bank of Ceylon
10.Bank of Nova Scotia
11. Bank of Tokyo Mitsubishi UFJ
12.Barclays Bank
13.BNP Paribas
14.Calyon Bank
15.Chinatrust Commercial Bank
16.Citibank
17.DBS Bank
18.Deutsche Bank
19.HSBC (Hongkong & Shanghai Banking Corporation)
20.JPMorgan Chase Bank
21.Krung Thai Bank
22.Mashreq Bank
23.Mizuho Corporate Bank
24.National Australia Bank
25.Shinhan Bank
26.Socit Gnrale
27.Sonali Bank
28.Standard Chartered Bank
29.UBS

Foreign banks with representative offices in India[edit]

American Banks

American Express

Bank of New York

Wells Fargo Bank

Northern Trust

Australian Banks

Commonwealth Bank

Westpac Banking Corporation

Austrian Banks

Raiffeisen Zentralbank
Belgian Banks

Fortis Bank

KBC Bank

Canadian Banks

Royal Bank of Canada

UAE Banks

Emirates Bank International

French Banks

Credit Industriel et Commercial

Natixis

German Banks

HypoVereinsbank

Commerzbank

Dresdner Bank

DZ Bank AG Deutsche Zentral Genossenschafts Bank

HSH Nordbank

Landesbank Baden-Wrttemberg

Irish Banks

Depfa Bank
Italian Banks

Banca Intesa

Banca di Roma

Banca Sella

Banca Popolare di Verona

Banca Popolare di Vicenza

UBI Banca

Monte dei Paschi di Siena

Sanpaolo IMI

UniCredit

Nepalese Banks

Everest Bank
Portuguese Banks

Caixa Geral de Depositos

Russian Banks

Vnesheconombank

Promsvyazbank

South African banks

First Rand Bank

South Korean Banks

Woori Bank
Spanish Banks

Caixabank

Banco de Sabadell

Banco Bilbao Vizcaya Argentaria

Sri Lankan Banks

Hatton National Bank

Swiss Banks

Credit Suisse

Zurich Cantonal Bank

Indian banks with business outside India[edit]

List of subsidiaries of Indian banks abroad as on November 30, 2007: [5]

Name of the Bank

Name of the

Andhra Bank

Dubai, Malaysia

all India bank

Hongkong

AXIS BANK Ltd.

Hongkong, Singapore, Dubai, Sri-Lanka, U

SBI (Canada) Ltd.

Toronto, Vancouver, Mississauga

SBI (Japan) Ltd.

Tokyo, Osaka

SBI (California) Ltd.

Los Angeles, Artesia, San Jose (Silicon Vall

SBI Finance Inc.

Delaware, U.S.A.

SBI International (Mauritius)

Mauritius (Off-shore Bank)

SBI (INDIA) Ltd.

Shanghai

SBI (Singapore) Ltd.

Singapore

Bank of Baroda (Uganda) Ltd.

Uganda

Bank of Baroda (Kenya) Ltd.

Kenya

Bank of Baroda (Ghana) Ltd.

Accra, Ghana

Bank of Baroda (U.K.) Nominee Ltd.

London, United Kingdom

Bank of Baroda (Hong Kong) Ltd.

Hong Kong (Converted into Restricted Lice

Bank of India (Japan) Ltd.

Tokyo, Osaka

Bank of India Finance (Kenya) Ltd.

Kenya

Canara Bank

Hongkong, United Kingdom

IOB Properties Pte Ltd.

Singapore

Bank of Baroda (Botswana) Ltd.

Gaborone, Botswana

Bank of Baroda (Guyana) Inc.

Georgetown, Guyana (South America)

ICICI Bank (U.K.) Ltd

London (U.K.)

ICICI Bank (Canada)Ltd

Toronto (Canada)

Bank of Baroda (Tanzania) Ltd.

Tanzania

Bank of Baroda (United Arab Emirate)

Dubai, Abu Dhabi, Ras Al Khaimah, Deira,

Bank of Baroda

Muscat, Oman

Bank of Baroda

Brussels, Belgium

ICICI Bank Eurasia LLC

Russia

PT Bank Indomonex

Indonesia

Indian Ocean International Bank Ltd. (IOIB)

Port Louis, Mauritius

Punjab National Bank International Limited (PNBIL)

London, United Kingdom

Bank of Baroda (Trinidad and Tobago) Limited

Trinidad & Tobago

PT Bank Swadesi Tbk

Indonesia

Bank of Baroda (Trinidad and Tobago) Limited

Trinidad & Tobago

Syndicate Bank

United Kingdom

UCO Bank

Hongkong, Singapore

1.
Small Industries Development Bank of
India
2.
3.
4.
5.

Small Industries Development Bank of India is a non-independent financial institution aimed to aid
the growth and development of micro, small and medium-scale enterprises in India. Wikipedia
CEO: Sushil Muhnot
Founded: April 2, 1990

Small Industries Development Bank of India

From Wikipedia, the free encyclopedia

Small Industries Development Bank of India is a non-independent financial institution aimed to

aid the growth and development of micro, small and medium-scale enterprises (MSME) in India. Set
up on April 2, 1990 through an act of parliament, it was incorporated initially as a wholly owned
subsidiary of Industrial Development Bank of India. Current shareholding is widely spread among
various state-owned banks, insurance companies and financial institutions. [citation needed]Beginning as a
refinancing agency to banks and state level financial institutions for their credit to small industries, it
has expanded its activities, including direct credit to the SME through 100 branches in all major
industrial clusters in India.[citation needed] Besides, it has been playing the development role in several ways
such as support to micro-finance institutions for capacity building and onlending. Recently it has
opened seven branches christened as Micro Finance branches, aimed especially at dispensing
loans up to 5 lakh.[citation needed]

It is the Principal Financial Institution for the Promotion, Financing and Development of the Micro,
Small and Medium Enterprise (MSME) sector and for Co-ordination of the functions of the
institutions engaged in similar activities.[1]
SIDBI has also floated several other entities for related activities. Credit Guarantee Fund Trust for
Micro and Small Enterprises ([2]) provides guarantees to banks for collateral-free loans extended
to SME. SIDBI Venture Capital Ltd.([3]) is a venture capital company focussed at SME. SME
Rating Agency of India Ltd. (SMERA - [4]) provides composite ratings to SME. Another entity
founded by SIDBI is ISARC - India SME Asset Reconstruction Company in 2009, as specialized
entities for NPA esolution for SME.
Contents
[hide]

1 SIDBI

2 Achievements

3 References

4 External links

SIDBI[edit]
This section is empty. You can help
by adding to it. (August 2012)

The purpose is to provide refinance facilities and short term lending to industries. [citation
needed]
Its headquarters is in Lucknow.[2] Chairman & Managing Director is Sushil Muhnot.

Achievements[edit]
SIDBI retained its position in the top 30 Development Banks of the World in the latest ranking of The
Banker, London. As per the May 2001 issue of The Banker, London, SIDBI ranked 25th both in terms
of Capital and Assets.[updation needed]
Credit Guarantee Fund Trust for Micro and Small Enterprises popularly known as CGTMSE is widely
being used by many PSU Banks and Private sector banks to fund MSME sector. During the year
2002-03 the aggregate sanction and disbursements of SIDBI amounted to 10,904 crore and 6,789
crore respectively. SIDBI has been permitted to raise finances up to 2,730 crore the year 2013
onward by the Reserve Bank of India.[3] Mission "To facilitate and strengthen credit flow to MSMEs
and address both financial and developmental gaps in the MSME eco-system" Vision To emerge
as a single window for meeting the financial and developmental needs of the MSME sector to make
it strong, vibrant and globally competitive, to position SIDBI Brand as the preferred and customer friendly institution and for enhancement of share - holder wealth and highest corporate values
through modern technology platform

IDBI Bank
From Wikipedia, the free encyclopedia

[hide]This article has multiple issues. Please help improve it or discuss thes
the talk page.
This article needs additional citations for verification.
This article relies on references to primary sources.

(August 2011)

(May 2007)

This article appears to be written like an advertisement.

IDBI Bank Limited

(August 2011)

Bank Aisa Dost Jaisa

Type

Government BANK

Traded as

BSE: 500116

Industry

Banking, Financial services

Predecesso

IDBI Limited

rs
Founded

July 1964

Headquart

Mumbai, India

ers
Key people

M.S. Raghavan (Chairman & MD)

Products

consumer banking, corporate

banking,finance and
insurance, investment banking,mortgage
loans, private banking, private
equity, wealth management, Agriculture
Loan

Revenue

282.84 billion (US$4.6 billion) (2013)[1]

[2]

Operating

54.58 billion (US$880 million) (2013)[2]

income
Net income

18.82 billion (US$300 million) (2013)[2]

Total

3.23 trillion (US$52 billion) (2013)[1][2]

assets
Employees

15,465 (March 2013)[1]

Website

www.idbi.com

IDBI Bank Limited is an Indian government-owned financial service company, formerly known as
Industrial Development Bank of India, headquartered in Mumbai, India. It was established in 1964 by
an Act of Parliament to provide credit and other financial facilities for the development of the
fledgling Indian industry.
It is currently 10th largest development bank in the world in terms of reach, with 2713 ATMs, 1513
branches, including one overseas branch at Dubai, and 1013 centers, including two overseas
centres at Singapore & Beijing.[3] IDBI Bank is on a par with nationalized banks and the SBI Group as
far as government ownership is concerned. It is one among the 26 commercial banks owned by the
Government of India.
The Bank has an aggregate balance sheet size of INR 3.2 trillion as on 31 March 2013.[4]
Contents
[hide]

1 History
o

1.1 Overview of development banking in India

1.2 Formation of Industrial Development Bank of India (IDBI)

1.3 Conversion of IDBI into a commercial bank

1.4 Acquisition of United Western Bank

2 Listings and shareholding

3 Employees

4 Awards and recognitions

5 See also

6 References

7 External links

History[edit]
Overview of development banking in India[edit]
Development Banking emerged after the Second World War and the Great Depression in 1930s.
The demand for reconstruction funds for the affected nations compelled in setting up of national
institutions for reconstruction. At the time of Independence in 1947, India had a fairly developed

banking system. The adoption of bank dominated financial development strategy was aimed at
meeting the sectoral credit needs, particularly of agriculture and industry. Towards this end,
theReserve Bank concentrated on regulating and developing mechanisms for institution building.
The commercial banking network was expanded to cater to the requirements of general banking and
for meeting the short-term working capital requirements of industry and agriculture. Specialised
development financial institutions (DFIs) such as the IDBI, NABARD, NHB and SIDBI, etc., with
majority ownership of the Reserve Bank were set up to meet the long-term financing requirements of
industry and agriculture.

Formation of Industrial Development Bank of India (IDBI) [edit]

The Industrial Development Bank of India (IDBI) was established in 1964 under an Act of Parliament
as a wholly owned subsidiary of the Reserve Bank of India. In 1976, the ownership of IDBI was
transferred to the Government of India and it was made the principal financial institution for
coordinating the activities of institutions engaged in financing, promoting and developing industry in
India. IDBI provided financial assistance, both in rupee and foreign currencies, for green-field
projects as also for expansion, modernisation and diversification purposes. In the wake of financial
sector reforms unveiled by the government since 1992, IDBI also provided indirect financial
assistance by way of refinancing of loans extended by State-level financial institutions and banks
and by way of rediscounting of bills of exchange arising out of sale of indigenous machinery on
deferred payment terms.[citation needed]
After the public issue of IDBI in July 1995, the Government shareholding in the Bank came down
from 100% to 75%.
IDBI played a pioneering role, particularly in the pre-reform era (196491), in catalyzing broad based
industrial development in India in keeping with its Government-ordained development banking
charter.[citation needed]
Some of the institutions built with the support of IDBI are the Securities and Exchange Board of
India (SEBI), National Stock Exchange of India (NSE), the National Securities Depository
Limited (NSDL), the Stock Holding Corporation of India Limited (SHCIL), the Credit Analysis &
Research Ltd, the Exim Bank (India), the Small Industries Development Bank of India (SIDBI) and
the Entrepreneurship Development Institute of India.

Conversion of IDBI into a commercial bank[edit]

A committee formed by RBI under chairmanship of S.H.Khan recommended the development
financial institution (IDBI) to diversify its activity and harmonise the role of development financing
and banking activities by getting away from the conventional distinction between commercial
banking and developmental banking. To keep up with reforms in financial sector, IDBI reshaped its
role from a development finance institution to a commercial institution. With the Industrial
Development Bank (Transfer of Undertaking and Repeal) Act, 2003, IDBI attained the status of a
limited company viz., IDBI Ltd.
Subsequently, in September 2004, the Reserve Bank of India incorporated IDBI as a 'scheduled
bank' under the RBI Act, 1934. Consequently, IDBI, formally entered the portals of banking business

as IDBI Ltd. from 1 October 2004. The commercial banking arm, IDBI BANK, was merged into IDBI
in 2005.

Acquisition of United Western Bank[edit]

In 2006, IDBI Bank acquired United Western Bank Satara in a rescue. By acquiring UWB, IDBI Bank
more than doubled the number of its branches from 195 to 425.[5][6]

Listings and shareholding[edit]

IDBI Bank's equity shares are listed on Bombay Stock Exchange and the National Stock Exchange
of India.[7][8]
As on 31 March 2014, Government of India held 76.72% shares in IDBI Bank. Over 4 lakh public
shareholders owned 8.75% of its shares. Insurance companies held approx. 12.32% of the shares
while remaining 7.21% shares were held by others.[1]

Employees[edit]
As on 31 March 2013, the bank had 15,465 employees, out of which 197 were employees
with disabilities.[1] The average age of bank employees on the same date was 33 years.[1] The bank
reported business of INR 25.64 crores per employee and net profit of INR 12.17 lakhs per employee
during the FY 2012-13.[1] The company incurred INR 1,538 crores towards employee
benefit expenses during the same financial year.[1]

Awards and recognitions[edit]

IDBI Bank was ranked #1197 in the Forbes Global 2000 in May 2013.[9]

It received the 'Overall Best Bank' and 'Best Public Sector Bank' awards in the Dun &
Bradstreet Banking Awards, 2011.[10]

In 2011, it received Banking Technology awards for best use of Business Intelligence and the
best Risk Management from Indian Banks Association. [11]

Exim Bank (Bangladesh)

From Wikipedia, the free encyclopedia

Export-Import Bank of Bangladesh

Type

Public

Traded as

DSE: EXIMBANK
CSE: EXIMBANK

Industry

Banking

Founded

August 3, 1999

Founders

Late Mr. Shahjahan Kabir

Headquarter

Dhaka, Bangladesh

s
Area served

72 branches inBangladesh(2012)[1]

Key people

Mr Nazrul Islam Mazumder

(Chairman of EXIM Bank.)

Dr. Mohammed Haider Ali Miah

(Managing Director of EXIM Bank)
[2]

Services
Revenue

Banking, Financial Services

20,476,318,100 Taka(264.05
million USD) (2013)[3]

Operating
income

Net income

8,284,131,946 Taka (106.82

million USD) (2013)[3]
3,256,947,071 Taka (41.99
million USD) (2013)[3]

Total assets

195,542,247,545 Taka(2013)[3]

Employees

1909 (2012)[1]

Website

www.eximbankbd.com

Export Import Bank of Bangladesh Limited (EXIM Bank) is one of the leading private
commercial banks inBangladesh. The Bank came into operation as a commercial bank on 3 August
1999 as per rules and regulations of Bangladesh Bank. [4] From its establishment the bank was known
as BEXIM Bank Limited.[5] But due to legal constraints, the bank was renamed as EXIM Bank, which
stood for Export Import Bank of Bangladesh Limited.
As of 2014 the bank has operations across the country with 80 branches and 45 ATM booths.[6] By
July 2004 the bank has migrated all of its conventional banking operation into Shariah based Islamic
banking.[7]

In 2010 the bank bought core banking software T-24 supplied by Swiss based IT company Temenos.
They have taken initiatives to set up a widespread network of ATM Machines throughout the country
as well as launched EXIM KISHAN, an agricultural product in line with the directive of Central Bank
for agricultural investment.
Corporate social responsibility (CSR)[8] is one of the most concerned areas of the Bank. The bank
has contributed to humanitarian activities as well as social and cultural activities including
undertaking scholarship programs. It has also came forward in beautification of Dhaka city, funding
foot over-bridges[9] at crowded points of the city and creating income generating welfare schemes.
Contents
[hide]

1 Historical Background

2 Nature of the business

3 Shariah council

4 Corporate Culture

5 Prime Operational Area

o

5.1 Foreign Exchange Department

6 Product & Services

6.1 Retail Banking

6.2 Corporate Banking

6.3 SME Banking (Small and medium enterprises)

6.4 Agri Banking

6.5 Remittance

7 Corporate social responsibilities

8 Activities of EXIM Bank Foundation

o

8.1 EXIM Bank Scholarship Program

8.2 EXIM Bank Agricultural University, Bangladesh (EBAUB)

8.3 EXIM Bank Hospital

9 Awards & Achievement

10 See also

11 External links

12 References

Historical Background[edit]
EXIM Bank Limited was established in 1999 under the leadership of the Late Mr. Shahjahan Kabir,
founder chairman who had a long dream of floating a commercial bank which would contribute to
the socio-economic development of the country. He had a long experience as a good banker. A
group of highly qualified and successful entrepreneurs joined their hands with the founding chairman
to materialize his dream. Indeed, all of them proved themselves in their respective business as most
successful star with their endeavor, intelligence, hard working and talent entrepreneurship. [10] Among
them, Mr. Nazrul Islam Mazumder became the new chairman after the founding chairman passed
away.[11] The bank starts functioning from 3 August 1999 with Mr. Alamgir Kabir, as the adviser and
Mr. Mohammad Lakiotullah as the Managing Director. Both of them have a long time experience in
the financial sector of Bangladesh. By their pragmatic decision and management directives in the
operational activities, this bank has earned a secured and distinctive position in the banking industry
in terms of performance, growth, and excellent management. The chairman of the bank, Mr Nazrul
Islam Mazumder, pleaded to the government to change the rule against commercial banks not being
allowed to have a branch outside the country. Later on in 2009, the bank made history for being the
first privately owned bank to open an exchange house in the UK.[12] The bank started its operation
with an initial authorized capital of Taka 1 billion ($12.87 million USD) and paid up capital of Taka
225 million (2.9 million USD).[13] Since then the authorized and paid up capital remained unchanged
till December 2000. Later, both were increased from time to time and their amounts stood at
Tk.16.12 billion ($207.31 million USD) and Tk.9.22 billion ($118.7 million USD) respectively on 31
December 2011.[13]

Nature of the business[edit]

EXIM bank is the first bank in Bangladesh to have converted all of its operations of conventional
banking into shariah-based banking, since July/2004.[14] They offer banking services for Muslims and
non-Muslims alike allowing the customers choice and flexibility in their savings and investments. The
bank provides all kinds of Islamic banking services, as well as regular commercial banking services
to its customers.

Shariah council[edit]
Islamic banking is guided by Islamic law which is known as Shariah principles. In particular, Islamic
law prohibits the collection and payment of interest, which is known as RIBA. Generally, Islamic law
also prohibits trading in financial risk (which is seen as a form of gambling) that are considered
unlawful, or Haraam. The Islamic capitalism were developed between the eighth and twelfth

centuries. Gold dinar was the base of monetary system of that economy. Mirza Basheer-ud-Din
Mahmood Ahmad is known as the father of modern Islamic economics. He describe it in detail in
his books, Nizame Nau, in 1942. In his book he proposed a banking system based on Mudarabah
which is known as profit and loss sharing. At the moment the largest Islamic bank in the world
is Bank Melli Iran.
The Board of directors has formed a Shariah Supervisory Board for the Bank. Their duty is to
monitor the entire Banks transactional procedures, & assuring its Shariah compliance. This board
consists of 11 members who are prominent ulemas, reputed bankers and eminent economists of the
country. Professor Moulana Muhammad Salah Uddin is the Chairman of the council. The tasks of
the Shariah supervisor in summary is replying to queries of the Banks administration, staff
members, shareholders, depositors, & customers, follow up with the Shariah auditors and provide
them with guidance, submitting reports & remarks to the Fatwa & Shariah Supervision Board and the
administration, participating in the Banks training programs, participating in the supervision over the
AlIqtisad AlIslami magazine, & handling the duty of being the General Secretary of the Board.

Corporate Culture[edit]

Hierarchy Structure of EXIM Bank

During the last two decades Corporate Culture has become an important theme in business as an
intangible concept which clearly plays a meaningful role in corporations, affecting employees and
organizational operations.[15] It is not the only determinant of business success or failure, a positive
culture can be a significant competitive advantage over organizations with which a firm competes.
EXIM Bank Limited, as an amenable bank, believe if the employees identify with the culture, the
work environment tends to be more enjoyable, which boosts morale and leads to increased levels of
teamwork, sharing of information, and openness to new ideas.

Prime Operational Area[edit]

As a full-fledged Islamic bank in Bangladesh, EXIM Bank extended all Islamic banking services
including wide range of saving and investment products, foreign exchange and ancillary services
with the support of sophisticated IT and professional management. The investment portfolio of the
bank comprises diversified areas of business and industry sectors. [16][17] The sectors
include textiles, edible oil, ready-made garments, chemicals, cement, telecommunication, steel, real
estate and other service industry including general trade finance. [18] The bank has given utmost
importance to acquire quality assets and is committed to retain good customers rough customer
relationship management and financial counseling. At the same time efforts have been made to
explore/induct new clients having good potentiality to diversify and create a well established
structured investment portfolio and to minimize overall portfolio risk.

Foreign Exchange Department[edit]

Organogram of EXIM Bank

Foreign exchange is an important department of EXIM Bank Limited, which deals with import, export
and foreign remittances. Foreign Exchange is an International Department of the Bank. It facilitates
international trade through its various modes of services. It bridges between importers and
exporters. This department mainly deals in foreign currency, thats why it is called foreign exchange
department.
This department is playing an important role in enhancing export earning, which aids economic
growth and in turn it helps for the economic development. On the other hand, it also helps to meet
those goods and service, which are most demandable and not adequate in the country.[19]

Product & Services[edit]

Retail Banking[edit]
- Deposits - Investments - Cards - Internet Banking - SMS Banking - Locker Services

Corporate Banking[edit]
- Investments - Foreign Exchange & Trade Finance - Correspondent Banking - Import Finance Export Finance

SME Banking (Small and medium enterprises)[edit]

- EXIM Uddyog[20] - EXIM Abalamban[21]

Agri Banking[edit]
- EXIM Kishan[22]

Remittance[edit]
Foreign Remittance - Exim Exchange Company (UK) Ltd. - Exim Exchange Company (Canada) Ltd.
- Exim (USA) Inc. - Exim Exchange (Australia) Pty. - SWIFT - International Operation

Corporate social responsibilities[edit]

The purpose of its banking business is, obviously, to earn profit, but the promoters and the equity
holders are aware of their commitment to the society to which they belong. A chunk of the profit is
kept aside and/or spent for socio-economic development through trustee and in patronization of art,
culture and sports of the country. In past recent years the bank has supported the poor and
meritorious students for smoothen their education. In 2007 about 80 students of different institutions
like (DU, BUET, DMC, VNC, and NDC) have taken scholarship.[23] The bank sponsored the
Beautification Project of Dhaka mega city conducted by Dhaka City Corporation. [24][25]

Activities of EXIM Bank Foundation[edit]

In recent years CSR has become a fundamental business practice and has gained much attention
from all the concerned of larger companies of Bangladesh. EXIM Bank believes that a strong CSR
program is an essential element in achieving good business practices and effective leadership. An
organization's impact on the economic, social and environmental landscape directly affects their
relationships with its stakeholders, in particular investors, employees, customers, business partners,
government and communities. The country's long -standing traditions of respect for family and social
networks and high value placed on relationships, social stability and education are well revered by
EXIM Bank. In this connection, they established EXIM Bank Foundation in the year 2006 to carry out
CSR activities in the most planned and orderly manner.

EXIM Bank Scholarship Program[edit]

EXIM Bank Scholarship Program was launched in the year 2006 with 61 poor meritorious students
selected from different reputed educational institutions of Dhaka City including Government

Laboratory High School, Viqarunnissa Noon School and College, Dhaka University, BUET, Dhaka
Medical College, etc. Till April 30, 2013, they have enrolled as many as 2100 students from around
350 reputed educational institutions across the country.[26]

EXIM Bank Agricultural University, Bangladesh (EBAUB) [edit]

The vulnerable features of Northern Bangladesh characterized by frequent river erosion, flood and
drought, social inequalities in education & health, and migration affecting livelihoods of its poor
inhabitants inspired the Bank for undertaking some initiatives for their assistance in advancement.
Till then, there has been no existence of any private agricultural university in North Bengal, even
though northern part of the country is densely populated and has enormous potential for agricultural
development. A large portion of quality students having good results in SSC and HSC cannot get
admission into public agricultural university every year. In essence, availability of admission would
enable them to pursue higher education in agriculture. EXIM Bank Supports export import initiatives
throughout the country. Thus, they have set-up EXIM Bank Agricultural University,
Bangladesh(EBAUB),[27] a private agricultural university at Chapainawabgang, Rajshahi, to be the
first of its kind in Northern Bangladesh, to create greater opportunity of diversified and demanddriven education for the prospective medium income group candidates at their doorsteps, as well as
to create an opportunity for conducting agricultural research to solve local problems.

EXIM Bank Hospital[edit]

A 5 storied building having 10,000 sft floor space at 840 Kazi Para, RokeyaSarani, Mirpur, Dhaka1216 has been hired to set up Exim Bank Hospital.[28] The decoration of this hospital is going on in
full swing. A doctor has been recruited who is working as a resident director of the hospital. Other
doctors and hospital staffs have been in the process of selection through recruitment notice already
published in the national dailies. They will be appointed as soon as the decoration of the hospital is
complete.

Awards & Achievement[edit]

ICMAB Best Corporate Award 2013[29]
International "BIZZ Award -2013"[30]
"International Diamond Prize for Excellence in Quality" award [31]
"World Finance" award 2013 - Best Islamic Bank, Bangladesh [32]

See also[edit]

Islamic banking

External links[edit]

EXIM Bank Web site

NASSA Group Web site

National Housing Bank

From Wikipedia, the free encyclopedia

National Housing Bank

Type

Public

Industry

Banking

Founded

July 8, 1988

Headquarters

New Delhi, India [1]

Products

Loans

Website

www.nhb.org.in

The National Housing Bank (NHB) is a state owned bank and regulation authority in India, created
on July 8, 1988[2]under section 6 of the National Housing Bank Act (1987). The headquarters is
in New Delhi and its total staff June 30, 2008 was 80.[3]
The institution, owned by the Reserve Bank of India, was established to promote private real estate
acquisition.[4] The NHB is regulating[5] and re-financing[6] social housing programs and other activities
like research and IT-initiatives, too.
VISION Promoting inclusive expansion with stability in housing finance market.

Notes[edit]
1.

Jump up^

What is RTGS? What is NEFT?

Ads by Google

by

Rajesh Goyal

What is RTGS ?

The full form of RTGS is "Real Time Gross Settlement". RTGS can be
defined as "as the continuous (real-time) settlement of funds
transfers individually on an order by order basis (without netting")

What do you mean by Real Time? What is the Meaning of Gross

Settlement"?

Here the words 'Real Time' refers to the process of instructions that
are executed at the time they are received, rather than at some later
time. On the other hand "Gross Settlement" means the settlement of
funds transfer instructions occurs individually (on an instruction by
instruction basis). The settlement of funds actually takes place in the
books of RBI and thus the payments are considered as final and
irrevocable.

What is NEFT ?

The full form of NEFT is "National Electronic Funds Transfer

(NEFT). The NEFT is a nation wide payment system facilitating oneto-one funds transfer. Under this system, individuals, firms and
corporates can electronically transfer funds from any bank branch to
any individual, firm or corporate having an acount with any other
bank branch in the country participating in the system.

RTGS Vs NEFT :

Thus, we can say that both RTGS and NEFT are schemes started by
RBI for the benefit of the customers which allow accounts holders in
the banks to electronically transfer the funds intra-bank. In the case
of RTGS, settlement in on 'Real Time' basis whereas in case of NEFT
the settlement in on batch basis and net basis. There are some other
rules, regulations and differences, which we will be discussing
below:-

What are the minimum and maximum amount of remittance under

RTGS and NEFT :

RTGS

NEFT

Minimum Amount :

RS 2 lakhs

No

minimum limit
Maximum Amount :

No upper ceiling

No upper ceiling

(However, maximum amount per transaction is limited to

Rs.50,000/- for cash-based remittances and remittances to Nepal.)

What are the operating hours of RTGS and NEFT ?

RBI has prescribed the following operating hours for NEFT : Presently,
NEFT operates in hourly batches - there are twelve settlements from 8 am to 7
pm on week days (Monday through Friday) and six settlements from 8 am to 1
pm on Saturdays.

RBI has prescrbed the following operating hours for RTGS : The RTGS
service window for customer's transactions is available from 9.00 hours to 16.30
hours on week days and from 9.00 hours to 13.30 hours on Saturdays for
settlement at the RBI end.

However, remember that the timings of both RTGS and NEFT at the
bank can vary depending on the customer timings of the bank
branches. Moreover, normally, banks close their own window for
accepting the transactions, about 15 minutes before the above time as
to allow them to put the transaction in the system so that it reaches by
the upper time limit at the RBI window. Thus, for each bank /
branch the above timings may sometimes vary.

What are the processing / service Charges for RTGS and NEFT
transactions :

RTGS : (a) Inward Transactions : Free, no charge to be levied;

(b) Outward Transactions: Rs 2 lakh to Rs 5 lakh - Not
exceeding Rs 30 per transaction; Above Rs 5 lakh - not exceeding Rs
55 transactions;

NEFT :

d transactions at destination bank branches (for credit to beneficiary accounts) - Free, no charges to be levied from benefi

rd transactions at originating bank branches charges applicable for the remitter

10,000 : not exceeding Rs 2.50 (+ Service Tax)

nsactions above Rs 10,000 up to Rs 1 lakh: not exceeding Rs 5 (+ Service Tax)

nsactions above Rs 1 lakh and up to Rs 2 lakhs: not exceeding Rs 15 (+ Service Tax)

nsactions above Rs 2 lakhs: not exceeding Rs 25 (+ Service Tax)

How Much Time it takes to transfer the funds through RTGS? I do

not see that transfer takes place on real time basis?

In terms of the procedure as laid down by RBI, the beneficiary

branches are expected to receive the funds on real time basis i.e. as
soon as funds are transferred by the remitting bank. However, there
are delays due to processing at the remitting and receiving bank. RBI
has allowed the beneficiary banks to credit the beneficiary's account
within two hours of receiving the funds transfer message. Thus, we
do not see the transfers on real time basis and there are some delays.
It is hoped that slowly this time will get reduced as more and bank
and branches improve their internal transfer system.

Ads by Google

RTGS Vs. NEFT

Which is a Better Method of Transferring Funds?
Inter Bank Transfer is a special service that allows an individual to transfer funds electronically to
accounts in other banks in India through the following two modes:

NEFT
RTGS

Let us understand these two methods of fund transfer in detail so that we can decide which method you
should use in what circumstance.
NEFT
The
acronym
NEFT
stands
for National
Electronic
Funds
Transfer. It is an online system for
transferring funds from one financial
institution to another within India
usually the banks). The system was
launched in November 2005, and was
set to inherit every bank that was assigned to the SEFT (Special Electronic Funds Transfer System)
clearing system. It was made mandatory by the RBI for all banks on the SEFT system to migrate to NEFT
by mid December 2005. As such, SEFT was discontinued as of January 2006. The RBI welcomed banks
that were full members of the RTGS to join the NEFT system.
RTGS
The acronym RTGS Stands For Real Time Gross Settlement. RTGS is a funds transfer system
where money is moved from one bank to another in real-time, and on gross basis. When using the
banking method, RTGS is the fastest possible way to transfer money. Real-time means that the payment
transaction isnt subject to any waiting period. The transaction will be completed as soon as the
processing is done, and gross settlement means that the money transfer is completed on a one to one
basis without clustering with another transaction. The transaction is treated as final and irrevocable as the
money transfer occurs in the books of the RBI (Reserve Bank of India). This system is maintained by the
RBI, and is available during working days for a given number of hours. Banks using RTGS need to have
Core banking to be able to initiate RTGS
Minimum/Maximum amount for RTGS/NEFT transactions under Retail Internet Banking

Type

Minimum

Maximum

RTGS

Rs. 2 Lakh

No limit

NEFT

No Limit

No limit

Minimum/Maximum amount for RTGS/NEFT transactions under Corporate Internet Banking

Type

Minimum

Maximum

RTGS

Rs. 2 Lakh

No limit

NEFT

No Limit

No limit.

Time Schedule for RTGS & NEFT services

RTGS transactions will be sent to RBI based on the following schedule:

RBI Settlement Timings for RTGS Transactions

(other than Inter Bank Transactions)
Day

Start Time

End Time

Monday to Friday

09:00 hrs

16:30 hrs

Saturday

09:00 hrs

13:30 hrs

NEFT transactions will be sent to RBI based on the following schedule:

RBI Settlement Timings

Day

Start Time

End Time

Monday to Friday

09:00 hrs

19:00 hrs

Saturday

09:00 hrs

13:00 hrs

NEFT transactions are settled in batches based on the following timings:

Settlements on weekdays at hourly intervals from 9:00 hrs to 19:00 hrs

Settlements on Saturdays at hourly intervals from 9:00 hrs to 1:00 hrs.

Please note that all the above timings are based on Indian Standard Time (IST) only
Mandatory information for RTGS & NEFT payment
The Remitter has to provide the following details:

Amount to be remitted
Account no. to be credited
Name of the beneficiary bank
Name of the beneficiary customer

Sender to receiver information, if any

IFSC code of the receiving branch.
Mobile number of the remitter.

The amount will be credited to the account basing on the account number only. As such remitter has
should be cautious on the account number while transferring the amounts in electronic mode
Difference between RTGS Vs. NEFT
The fundamental difference between RTGS and NEFT, is
that while RTGS is based on gross settlement, NEFT is
based on net-settlement. Gross settlement is where a
transaction is completed on a one-to-one basis without
bunching with other transactions. On the other hand a
Deferred Net Basis (DNS), or net-settlement means that the
transactions are completed in batches at specific times.
Here, all transfers will be held up until a specific time. RTGS
transactions are processed throughout the working hours of the system.
RTGS transactions involve large amounts of cash, basically only funds above Rs 200,000 may be
transferred using this system. For NEFT, any amount below Rs 200,000 may be transferred, and this
system is generally for smaller value transactions involving smaller amounts of money.
RTGS processes in real-time (push transfer), while NEFT processes in cycles during the given working
day. This causes a NEFT transaction that is initiated later than the last cycle to be completed the next day.
So if you want to transfer large sums of money real time RTGS is better but for small amounts where
there is not much urgency NEFT is a Better Option. Usually RTGS costs more than NEFT Transactions.

TABLE OF DIFFERENCES BETWEEN NEFT & RTGS

Criteria

NEFT

RTGS (Retail)

Settlement

Done in batches (Slower)

Real time (Faster)

Full Form

National Electronic Fund Real

Time
Transfer
Settlement

Timings on Mon Fri

8:00 am 6:30 pm

9:00 am 4:30 pm

Timings on Saturday

8:00 am 12:30 pm

9:00 am 1:30 pm

Minimum amount of money No Minimum

transfer limit

2 lacs

Maximum
amount
money transfer limit

No Limit

When does
Happen in
account

of No Limit

Gross

the Credit Happens in the hourly Real time between Banks

beneficiary batch Between Banks

Maximum Charges as per Upto 10,000 Rs. 2.5

RBI
from 10,001 1 lac Rs. 5
from 1 2 lacs Rs. 15
Above 2 lacs Rs. 25

Rs. 25-30 (Upto 2 5 lacs)

Rs. 50-55 (Above 5 lacs)
(Lower charges for first
half of day)

Suitable for

Large Money Transfer

Small Money Transfer

Frequently Asked Questions (FAQ) on

Real Time Gross Settlement (RTGS) System
Q1.

What is RTGS System?

Ans. The acronym 'RTGS' stands for Real Time Gross Settlement, which can be defined as the
continuous (real-time) settlement of funds transfers individually on an order by order basis
(without netting). 'Real Time' means the processing of instructions at the time they are received
rather than at some later time; 'Gross Settlement' means the settlement of funds transfer
instructions occurs individually (on an instruction by instruction basis). Considering that the funds
settlement takes place in the books of the Reserve Bank of India, the payments are final and
irrevocable.

Q2.

How RTGS is different from National Electronics Funds Transfer System (NEFT)?
Ans. NEFT is an electronic fund transfer system that operates on a Deferred Net Settlement
(DNS) basis which settles transactions in batches. In DNS, the settlement takes place with all
transactions received till the particular cut-off time. These transactions are netted (payable and
receivables) in NEFT whereas in RTGS the transactions are settled individually. For example,
currently, NEFT operates in hourly batches. [There are twelve settlements from 8 am to 7 pm on
week days and six settlements from 8 am to 1 pm on Saturdays.] Any transaction initiated after a
designated settlement time would have to wait till the next designated settlement time Contrary to
this, in the RTGS transactions are processed continuously throughout the RTGS business hours.

Q3.

Is there any minimum / maximum amount stipulation for RTGS transactions?

Ans. The RTGS system is primarily meant for large value transactions. The minimum amount to
be remitted through RTGS is ` 2 lakh. There is no upper ceiling for RTGS transactions.

Q4.

What is the time taken for effecting funds transfer from one account to another under
RTGS?
Ans. Under normal circumstances the beneficiary branches are expected to receive the funds in
real time as soon as funds are transferred by the remitting bank. The beneficiary bank has to
credit the beneficiary's account within two hours of receiving the funds transfer message.

Q5.

Would the remitting customer receive an acknowledgement of money credited to the

beneficiary's account?
Ans. The remitting bank receives a message from the Reserve Bank that money has been
credited to the receiving bank. Based on this the remitting bank can advise the remitting customer
through SMS that money has been credited to the receiving bank.

Q6.

Would the remitting customer get back the money if it is not credited to the beneficiary's
account? When?
Ans. Yes. Funds, received by a RTGS member for the credit to a beneficiary customers account,
will be returned to the originating RTGS member within two hours of the receipt of the payment at
the PI of the recipient bank or before the end of the RTGS Business day, whichever is earlier, if it
is not possible to credit the funds to the beneficiary customers account for any reason e.g.
account does not exist, account frozen, etc. Once the money is received back by the remitting
bank, the original debit entry in the customer's account is reversed.

Q7.

Till what time RTGS service window is available?

Ans. The RTGS service window for customer's transactions is available to banks from 9.00 hours
to 16.30 hours on week days and from 9.00 hours to 14:00 hours on Saturdays for settlement at
the RBI end. However, the timings that the banks follow may vary depending on the customer
timings of the bank branches.

Q8.

What about Processing Charges / Service Charges for RTGS transactions?

Ans. With a view to rationalize the service charges levied by banks for offering funds transfer
through RTGS system, a broad framework has been mandated as under:
(a) Inward transactions Free, no charge to be levied.
(b) Outward transactions 2 lakh to 5 lakh
Above 5 lakh not exceeding 55 per transaction.

Q9.

not

exceeding 30

per

transaction;

What is the essential information that the remitting customer would have to furnish to a
bank for the remittance to be effected?
Ans. The remitting customer has to furnish the following information to a bank for initiating a
RTGS remittance:
1.
2.
3.
4.
5.
6.
7.

Q10.

Amount to be remitted
Remitting customers account number which is to be debited
Name of the beneficiary bank and branch
Name of the beneficiary customer
Account number of the beneficiary customer
Sender to receiver information, if any
The IFSC Number of the receiving branch

How would one know the IFSC code of the receiving branch?
Ans. The beneficiary customer can obtain the IFSC code from his bank branch. The IFSC code is
also available on the cheque leaf. The list of IFSCs is also available on the RBI website
( http://rbidocs.rbi.org.in/rdocs/RTGS/DOCs/RTGEB0112.xls ). This code number and bank branch
details can be communicated by the beneficiary to the remitting customer.

Q11.

Do all bank branches in India provide RTGS service?

Ans. No. All the bank branches in India are not RTGS enabled. Presently, there are more than
100000 RTGS enabled bank branches. The list of such branches is available on RBI website
at: http://rbidocs.rbi.org.in/rdocs/RTGS/DOCs/RTGEB0112.xls

Q12.

Is there any way that a remitting customer can track the remittance transaction?
Ans. It would depend on the arrangement between the remitting customer and the remitting bank.
Some banks with internet banking facility provide this service. Once the funds are credited to the
account of the beneficiary bank, the remitting customer gets a confirmation from his bank either
by an e-mail or SMS. Customer may also contact RTGS / NEFT Customer Facilitation Centres of
the banks, for tracking a transaction.

Q13.

Whom do I can contact, in case of non-credit or delay in credit to the beneficiary account?
Ans. Contact your bank / branch. If the issue is not resolved satisfactorily, complaint may be
lodged to the Customer Service Department of RBI at The
Chief
General
Manager
Reserve
Bank
of
India
Customer
Service
Department
1st
Floor,
Amar
Building,
Fort
Mumbai

400
001
Or send email

Q14.

How can a remitting customer know whether the bank branch of the beneficiary accepts
remittance through RTGS?
Ans. For a funds transfer to go through RTGS, both the sending bank branch and the receiving
bank branch would have to be RTGS enabled. The lists are readily available at all RTGS enabled
branches.
Besides,
the
information
is
available
at
RBI
website

( http://rbidocs.rbi.org.in/rdocs/RTGS/DOCs/RTGEB0112.xls ). Considering that more than 100000

branches at more than 20,000 cities / towns / taluka places are covered under the RTGS system,
getting this information would not be difficult.

Frequently Asked Questions (FAQ) on

National Electronic Funds Transfer (NEFT) System
Q.1.

What is NEFT System?

Ans. National Electronic Funds Transfer (NEFT) system is a nation wide funds transfer system to
facilitate transfer of funds from any bank branch to any other bank branch.

Q.2.

Are all bank branches in the system part of the funds transfer network?
Ans. No. As on January 31, 2007, 18500 branches of 53 banks are participating. Steps are being
taken to widen the coverage both in terms of banks and branches.

Q.3.

Whether the system is centre specific or has any geographical restriction?

Ans. No, there is no restriction in the number of centres or of any geographical area. The system
uses the concept of centralised accounting system and the bank's account that are sending or
receiving the funds transfer instructions, gets operated at one centre, viz, Mumbai only. The
individual branches participating in NEFT could be located anywhere across the country, as
detailed in the list provided on RBI website.

Q.4.

What is the funds availability schedule for the beneficiary?

Ans. The beneficiary gets the credit on the same Day or the next Day depending on the time of
settlement.

Q.5.

How does the NEFT system operate?

Ans. Step-1: The remitter fills in the NEFT Application form giving the particulars of the
beneficiary (bank-branch, beneficiary's name, account type and account number) and authorises
the branch to remit the specified amount to the beneficiary by raising a debit to the remitter's
account. (This can also be done by using net banking services offered by some of the banks)
Step-2: The remitting branch prepares a Structured Financial Messaging Solution (SFMS)
message and sends it to its Service Centre for NEFT.
Step-3: The Service Centre forwards the same to the local RBI (National Clearing Cell, Mumbai)
to be included for the next available settlement. Presently, NEFT is settled in six batches at 0930,
1030, 1200, 1300, 1500 and 1600 hours on weekdays and 0930, 1030 and 1200 hours on
Saturdays
Step-4: The RBI at the clearing centre sorts the transactions bank-wise and prepares accounting
entries of net debit or credit for passing on to the banks participating in the system. Thereafter,
bank-wise remittance messages are transmitted to banks.
Step-5: The receiving banks process the remittance messages received from RBI and affect the
credit to the beneficiaries' accounts.

Q.6.

How is this NEFT System an improvement over the existing RBI-EFT System?
Ans. The RBI-EFT system is confined to the 15 centres where RBI is providing the facility,
whereas there is no such restriction in NEFT as it is based on the centralised concept. The
detailed list of branches of various banks participating in NEFT system is available on our
website. The system also uses the state-of-the-art technology for the communication, security
etc, and thereby offers better customer service.

Q.7.

How is it different from RTGS and EFT?

Ans. NEFT is an electronic payment system to transfer funds from any part of country to any
other part of the country and works on net settlement basis, unlike RTGS that works on gross
settlement basis. While EFT is restricted to the fifteen centers (only where RBI offices are
located), NEFT is a nation-wide electronic fund transfer system.
Q.8.

Any limit on the amount of individual transaction?

Ans. There is no value limit for individual transactions.

Q.9.

What about Processing Charges/Service Charges

Ans. While RBI has waived the processing charges till March 31, 2008, levy of service charges
by banks is left to the discretion of the respective banks. The bank-wise details of charges levied
are available on the RBI website.

Q.10. How will I know which are the branches participating in the NEFT?
Ans. RBI publishes the list of bank branches participating in the NEFT on its website
i.e. www.rbi.org.in .
Q.11. What is IFS Code (IFSC)? How it is different from MICR code?
Ans. Indian Financial System Code (IFSC) is an alpha numeric code designed to uniquely
identify the bank-branches in India. This is 11 digit code with first 4 characters representing the
banks code, the next character reserved as control character (Presently 0 appears in the fifth
position) and remaining 6 characters to identify the branch. The MICR code has 9 digits to identify
the bank-branch.
Q.12. How will I know, what is the IFS Code of my bank-branch?
Ans. RBI had since advised all the banks to print IFSC on cheques leaves issued to their
customers. You may also contact your bank-branch and get the IFS Code of that branch.
Q.13. Whom I can contact, in case of non-credit or delay in credit to the beneficiary account?
Ans. Contact your bank/branch. If the issue is not resolved satisfactorily, the Customer Service
Department of RBI may be contacted on cgmcsd@rbi.org.in or write to:
The Chief General Manager,
Reserve Bank of India,
Customer Service Department,
1st Floor, Amar Building, Fort,
Mumbai-400001
Q.14. Is it necessary to have a bank account to originate the NEFT transaction?
Ans. Yes, NEFT is an account to account funds transfer system.
Q.15. Is it necessary that the beneficiary should have an account at the destination bank-branch?
Ans. Yes, NEFT is an account to account funds transfer system.
Q.16. Can I receive foreign remittances through NEFT?
Ans. This system can be used only for remitting Indian Rupee among the participating banks
within the country.
Q.17. Can I send remittances abroad using the NEFT?
Ans. No
Q.18. Can I originate a transaction to receive funds from another account?
Ans. No
Q.19. Can I send/receive funds from/to NRI accounts?

Ans. Yes, subject to applicability of provisions of FEMA

Q.20. Would the remitting customer receive an acknowledgement of money having been credited
to the beneficiary's account?
Ans. Acknowledgement is generated for the customer at his branch informing him that his
remittance is received by the beneficiary. However the mode of communication would depend on
the facility provided by bank / branch.
Q.21. Would the remitting customer get back the money if it is not credited to the beneficiarys
account?
Ans. Yes, the remitting customer gets back the money if it is not credited to the beneficiary
account.
Q.22. Till what time NEFT service window is available?
Ans. There are six settlements at 0930, 1030, 1200, 1300, 1500 and 1600 hours on weekdays
and 0930, 1030 and 1200 hours on Saturdays.
Q.23. What is the essential information that the remitting customer would have to furnish for the
remittance to be effected?
Ans. The essential information that the remitting customer has to furnish is:

Beneficiary details such as beneficiary name and account number

Name and IFSC of the beneficiary bank branch.

Q.24. Is there any way a remitting customer can track the remittance transaction?
Ans. The remitting customer can track the remitting transaction through the remitting branch only,
as the remitting branch is informed about the status of the remitted transactions.
Precautions when using NEFT and RTGS Transfer Systems

Banking Ombudsman Scheme

From Wikipedia, the free encyclopedia

This article needs additional citations for verification. Please help improve this
article by adding citations to reliable sources. Unsourced material may be challenged and
removed. (December 2009)
Banking Ombudsman [1] is a quasi judicial authority functioning under Indias Banking Ombudsman
Scheme 2006, and the authority was created pursuant to a decision made by the Government of
India to enable resolution of complaints of customers of banks relating to certain services rendered
by the banks. The Banking Ombudsman Scheme was first introduced in India in 1995, and was
revised in 2002. The current scheme became operative from 1 January 2006, and replaced and
superseded the banking Ombudsman Scheme 2002. From 2002 until 2006, around 36,000
complaints have been dealt by the Banking Ombudsmen.

Type of complaints[edit]

The type and scope of the complaints which may be considered by a Banking Ombudsman
is very comprehensive, and it has been empowered to receive and consider complaints
pertaining to the following:
Non-payment or inordinate delay in the payment or collection of cheques, drafts, bills, etc.;

Non-acceptance, without sufficient cause, of small denomination notes tendered for any
purpose, and for charging of commission for this service;

Non-acceptance, without sufficient cause, of coins tendered and for charging of commission
for this service;

Non-payment or delay in payment of inward remittances ;

Failure to issue or delay in issue, of drafts, pay orders or bankers cheques;

Non-adherence to prescribed working hours;

Failure to honour guarantee or letter of credit commitments;

Failure to provide or delay in providing a banking facility (other than loans and advances)
promised in writing by a bank or its direct selling agents;

Delays, non-credit of proceeds to parties' accounts, non-payment of deposit or nonobservance of the Reserve Bank directives, if any, applicable to rate of interest on deposits in
any savings, current or other account maintained with a bank ;

Delays in receipt of export proceeds, handling of export bills, collection of bills etc.,
for exporters provided the said complaints pertain to the bank's operations in India;

Refusal to open deposit accounts without any valid reason for refusal;

Levying of charges without adequate prior notice to the customer;

Non-adherence by the bank or its subsidiaries to the instructions of Reserve Bank

on ATM/debit card operations or credit card operations;

Non-disbursement or delay in disbursement of pension to the extent the grievance can be

attributed to the action on the part of the bank concerned, (but not with regard to its employees);

Refusal to accept or delay in accepting payment towards taxes, as required by Reserve

Bank/Government;

Refusal to issue or delay in issuing, or failure to service or delay in servicing or redemption of

Government securities;

Forced closure of deposit accounts without due notice or without sufficient reason;

Closure of account without customer concern.

Refusal to close or delay in closing the accounts;

Non-adherence to the fair practices code as adopted by the bank; and

Financial lose incurred to customer due to wrong information given by bank official.

Any other matter relating to the violation of the directives issued by the Reserve Bank in
relation to banking or other services.

complaints from Non-Resident Indians having accounts in India in relation to their

remittances from abroad, deposits and other bank-related matters;[2]

Vide their Circular No.CSD.BOS.4638/13.01.01/2006-07 dated May 24, 2007, the Reserve Bank of
India has amended their Banking Ombudsman Scheme, 2006 and the scheme shall be operative
with amended effect.

Financial inclusion

From Wikipedia, the free encyclopedia

Jump to: navigation, search
Financial inclusion or inclusive financing is the delivery of financial services at
affordable costs to sections of disadvantaged and low-income segments of society, in
contrast to financial exclusion where those services are not available or affordable.
An estimated 2.5 billion working-age adults globally have no access to the types of
formal financial services delivered by regulated financial institutions. For example in
Sub-Saharan Africa only 24% of adults have a bank account even though Africa's
formal financial sector has grown in recent years. [1] It is argued that as banking
services are in the nature of public good; the availability of banking and payment
services to the entire population without discrimination is the prime objective of
financial inclusion public policy.
Contents

[hide]
1 Goals
2 The Alliance for Financial Inclusion

 3 MIX's work in the area of Financial Inclusion

4 The United Nations and financial inclusion
5 Financial inclusion in India
o 5.1 Financial Inclusion Index
o 5.2 Controversy
o 5.3 Tracking Financial Inclusion through Budget Analysis
o 5.4 Pradhan Mantri Jan Dhan Yojana
6 See also
7 References
8 External links
Goals[edit]

The term "financial inclusion" has gained importance since the early 2000s, a result of
findings about financial exclusion and its direct correlation to poverty. The United
Nations defines the goals[2] of financial inclusion as follows:
access at a reasonable cost for all households to a full range of
financial services, including savings or deposit services,
payment and transfer services, credit and insurance;
sound and safe institutions governed by clear regulation and
industry performance standards;
financial and institutional sustainability, to ensure continuity
and certainty of investment; and
competition to ensure choice and affordability for clients.
Former United Nations Secretary-General Kofi Annan, on 29 December 2003, said:
The stark reality is that most poor people in the world still lack access to sustainable
financial services, whether it is savings, credit or insurance. The great challenge

before us is to address the constraints that exclude people from full participation in the
financial sector. Together, we can and must build inclusive financial sectors that help
people improve their lives. More recently, Alliance for Financial Inclusion (AFI)
Executive Director Alfred Hannig highlighted on 24 April 2013 progress in financial
inclusion during the IMF-World Bank 2013 Spring Meetings: "Financial inclusion is
no longer a fringe subject. It is now recognized as an important part of the mainstream
thinking on economic development based on country leadership." [3]
The Alliance for Financial Inclusion[edit]

The Alliance for Financial Inclusion (AFI) is the world's largest and most prominent
network of financial inclusion policymakers from developing and emerging
economies who work together to increase access to appropriate financial services for
the poor. AFI's core mission is to adopt and expand effective inclusive financial
policies in developing nations in an effort to lift 2.5 billion impoverished, unbanked
citizens out of poverty. AFI was founded in 2008 as a Bill & Melinda Gates
Foundation-funded project, supported by AusAid, in order to advance the
development of smart financial inclusion policy in developing and emerging
countries. The AFI Network[4] has grown to more than 105 institutions from 88
member nations from 2008 to 2013. AFI hosts its landmark, annual Global Policy
Forum (GPF) as the keystone event for its membership. During the 2011 GPF, the
network adopted the Maya Declaration, a set of common principles and goals for
financial inclusion policy development. AFI uses a "polylateral development" model
to contrast and compare successful financial inclusion policies, focusing on a peer-topeer system rather than a top-down or North-to-South learning model.
MIX's work in the area of Financial Inclusion[edit]

MIX Market [1] is the premier source of public information on microfinance

institutions (MFIs) and their financial and social performance. MIX offers a suite of
popular analysis reports at the global, regional, and country levels, including global
analyses of key issues for the sector. MIX has been working over the past two years
with policy makers, financial services providers, donors, and other key stakeholders in
a series of countries to gather otherwise isolated datasets that, together, can provide
them with the information they need for effective financial inclusion decision making.
To date MIX, through its FINclusionLab [2], has created 15 financial inclusion maps
in 13 countries in Africa, South Asia, and Latin America [5] and plans to add an
additional 7 countries and 5 Indian states [6] to its platform during 2014. These

resources are developed in close collaboration with local stakeholders to ensure their
relevance in supporting the development and monitoring of financial inclusion
strategies both at the policy and operational levels. The MIXs move to visualize geospatial sub-national supply-side data through publicly available geo-spatial maps will
enrich the supply-side data landscape. This will be a challenging undertaking as
frequent data collection can be expensive and/or ad hoc depending on when data may
become available.
The United Nations and financial inclusion[edit]

In partnership with the National Bank for Agriculture and Rural Development, the UN
aims to increase financial inclusion of the poor by developing appropriate financial
products for them and increasing awareness on available financial services and
strengthening financial literacy, particularly amongst women. The UN's financial
inclusion product is financed by the United Nations Development Programme. [7]
Financial inclusion in India[edit]
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The Reserve Bank of India (RBI) set up the Khan Commission in 2004 to look into
financial inclusion and the recommendations of the commission were incorporated
into the mid-term review of the policy (200506). In the report RBI exhorted the
banks with a view to achieving greater financial inclusion to make available a basic
"no-frills" banking account. In India, financial inclusion first featured in 2005, when it
was introduced by K.C. Chakraborthy, the chairman of Indian
Bank. Mangalam became the first village in India where all households were provided
banking facilities. Norms were relaxed for people intending to open accounts with
annual deposits of less than Rs. 50,000. General credit cards (GCCs) were issued to
the poor and the disadvantaged with a view to help them access easy credit. In January
2006, the Reserve Bank permitted commercial banks to make use of the services of
non-governmental organizations (NGOs/SHGs), micro-finance institutions, and other
civil society organizations as intermediaries for providing financial and banking
services. These intermediaries could be used as business facilitators or business
correspondents by commercial banks. The bank asked the commercial banks in
different regions to start a 100% financial inclusion campaign on a pilot basis. As a
result of the campaign, states or union territories like Puducherry, Himachal

Pradesh and Kerala announced 100% financial inclusion in all their districts. Reserve
Bank of Indias vision for 2020 is to open nearly 600 million new customers' accounts
and service them through a variety of channels by leveraging on IT. However,
illiteracy and the low income savings and lack of bank branches in rural areas
continue to be a roadblock to financial inclusion in many states and there is
inadequate legal and financial structure.
The government of India recently announced Pradhan Mantri Jan Dhan Yojna, [8] a
national financial inclusion mission which aims to provide bank accounts to at least
75 million people by January 26, 2015. To achieve this milestone, its important for
both service providers and policy makers to have readily available information
outlining gaps in access and interactive tools that help better understand the context at
the district level. MIX designed the FINclusion Lab India FI workbook [9] to support
these actors as they craft strategies to achieve these goals.
In India, RBI has initiated several measures to achieve greater financial inclusion,such
as facilitating no-frills accounts and GCCs for small deposits and credit. Some of
these steps are:
Opening of no-frills accounts: Basic banking no-frills account is with nil or very low
minimum balance as well as charges that make such accounts accessible to vast
sections of the population. Banks have been advised to provide small overdrafts in
such accounts.
Relaxation on know-your-customer (KYC) norms:KYC requirements for opening
bank accounts were relaxed for small accounts in August 2005, thereby simplifying
procedures by stipulating that introduction by an account holder who has been
subjected to the full KYC drill would suffice for opening such accounts.The banks
were also permitted to take any evidence as to the identity and address of the customer
to their satisfaction. It has now been further relaxed to include the letters issued by the
Unique Identification Authority of India containing details of name, address and
Aadhaar number.
Engaging business correspondents (BCs):In January 2006, RBI permitted banks to
engage business facilitators (BFs) and BCs as intermediaries for providing financial
and banking services. The BC model allows banks to provide doorstep delivery of
services, especially cash in-cash out transactions, thus addressing the last-mile

problem. The list of eligible individuals and entities that can be engaged as BCs is
being widened from time to time. With effect from September 2010, for-profit
companies have also been allowed to be engaged as BCs. India map of Financial
Inclusion by MIX provides more insights on this.[10]
Use of technology:Recognizing that technology has the potential to address the issues
of outreach and credit delivery in rural and remote areas in a viable manner,banks
have been advised to make effective use of information and communications
technology (ICT), to provide doorstep banking services through the BC model where
the accounts can be operated by even illiterate customers by using biometrics, thus
ensuring the security of transactions and enhancing confidence in the banking system.
Adoption of EBT: Banks have been advised to implement EBT by leveraging ICTbased banking through BCs to transfer social benefits electronically to the bank
account of the beneficiary and deliver government benefits to the doorstep of the
beneficiary, thus reducing dependence on cash and lowering transaction costs.
GCC:With a view to helping the poor and the disadvantaged with access to easy
credit, banks have been asked to consider introduction of a general purpose credit card
facility up to `25,000 at their rural and semi-urban branches. The objective of the
scheme is to provide hassle-free credit to banks customers based on the assessment of
cash flow without insistence on security, purpose or end use of the credit. This is in
the nature of revolving credit entitling the holder to withdraw up to the limit
sanctioned.
Simplified branch authorization:To address the issue of uneven spread of bank
branches, in December 2009, domestic scheduled commercial banks were permitted to
freely open branches in tier III to tier VI centres with a population of less than 50,000
under general permission, subject to reporting. In the north-eastern states and Sikkim,
domestic scheduled commercial banks can now open branches in rural,semi-urban and
urban centres without the need to take permission from RBI in each case, subject to
reporting.
Opening of branches in unbanked rural centres: To further step up the opening of
branches in rural areas so as to improve banking penetration and financial inclusion
rapidly, the need for the opening of more bricks and mortar branches, besides the use
of BCs, was felt. Accordingly, banks have been mandated in the April monetary policy

statement to allocate at least 25% of the total number of branches to be opened during
a year to unbanked rural centres.
Financial Inclusion Index[edit]

On June 25, 2013, CRISIL, India's leading credit rating and research company
launched an index to measure the status of financial inclusion in India. The indexInclusix- along with a report,[11] was released by the Finance Minister of India, P.
Chidambaram[12] at a widely covered program at New Delhi. CRISIL Inclusix is a oneof-its-kind tool to measure the extent of inclusion in India, right down to each of the
632 districts. CRISIL Inclusix is a relative index on a scale of 0 to 100, and combines
three critical parameters of basic banking services branch penetration, deposit
penetration, and credit penetration into one metric. The report highlights many
hitherto unknown facets of inclusion in India. It contains the first regional, state-wise,
and district-wise assessments of financial inclusion ever published, and the first
analysis of trends in inclusion over a three-year timeframe. Some key conclusions
from the study are:[13]
The all-India CRISIL Inclusix score of 40.1 is low, though
there are clear signs of progress this score has improved from
35.4 in 2009.
Deposit penetration is the key driver of financial inclusion
the number of savings accounts (624 million), is almost four
times the number of loan accounts (160 million).
618 out of 632 districts reported an improvement in their
scores during 2009-2011.
The top three states and Union Territories are Puducherry,
Chandigarh, and Kerala; the top three districts are
Pathanamthitta (Kerala), Karaikal (Puducherry), and
Thiruvananthapuram (Kerala).
Controversy[edit]

Financial inclusion in India is often closely connected to the aggressive micro credit
policies that were introduced without the appropriate regulations oversight or
consumer education policies. The result was consumers becoming quickly overindebted to the point of committing suicide, [14] lending institutions saw repayment
rates collapse after politicians in one of the country's largest states called on borrowers

to stop paying back their loans, threatening the existence of the entire 4 billion a year
Indian microcredit industry.[15][16] This crisis has often been compared to the mortgage
lending crisis in the US.[15]
The challenge for those working in the financial inclusion field has been to separate
micro-credit as only one aspect of the larger financial inclusion efforts and use the
Indian crisis as an example of the importance of having the appropriate regulatory and
educational policy framework in place.
Tracking Financial Inclusion through Budget Analysis[edit]

While financial inclusion is an important issue, it may also be interesting to assess

whether such inclusion as earmarked in policies are actually reaching the common
beneficiaries. Since the 1990s, there has been serious efforts both in the government
agencies and in the civil society to monitor the fund flow process and to track the
outcome of public expenditure through budget tracking. Organisations like
International Budget Partnership (IBP) are undertaking global surveys in more than
100 countries to study the openness (transparency) in budget making process. There
are various tools used by different civil society groups to track public expenditure.
Such tools may include performance monitoring of public services, social audit and
public accountability surveys. In India, the institutionalisation of Right to information
(RTI) has been a supporting tool for activists and citizen groups for budget tracking
and advocacy for social inclusion.
Pradhan Mantri Jan Dhan Yojana[edit]

Main article: Pradhan Mantri Jan Dhan Yojana

Indian Prime Minister Narendra Modi announced this scheme for comprehensive
financial inclusion on his first Independence Day speech on 15 August 2014. The
scheme was formally launched on 28 August 2014 [17] with a target to provide
'universal access to banking facilities' starting with Basic Banking Accounts with
overdraft facility of Rs.5000 after six months and RuPay Debit card with inbuilt
accident insurance cover of Rs. 1 lakh and RuPay Kisan Card & in next phase, micro
insurance & pension etc. will also be added. [17] In a run up to the formal launch of this
scheme, the Prime Minister personally mailed to CEOs of all banks to gear up for the
gigantic task of enrolling over 7.5 crore (75 million) households and to open their
accounts.[18] In this email he categorically declared that a bank account for each
household was a "national priority".

On the inauguration day of the scheme, 1.5 Crore (15 million) bank accounts were
opened.[19]
See also[edit]

Alliance for Financial Inclusion

AFI Global Policy Forum
Maya Declaration
UN Special Advocate for Inclusive Finance for Development

National Bank for Agriculture and Rural

Development
From Wikipedia, the free encyclopedia

This article may need to be rewritten entirely to comply with Wikipedia's quality
standards. You can help. Thediscussion page may contain suggestions. (February 2014)

National Bank for Agriculture and Rural

Development

Logo of NABARD
Headquarters inMumbai
Headquarters

Mumbai, Maharashtra, India

Established

12 July 1982[1]

Chairman

Dr. Harsh Kumar Bhanwala[2]

Currency

(Rupees)

Reserves

Rs.81,220 crore (2007)

Website

www.nabard.org

NABARD is the apex development bank in India

National Bank for Agriculture and Rural Development (NABARD) is an apex development bank
in India having headquarters based in Mumbai (Maharashtra)[3] and other branches are all over the
country. The Committee to Review Arrangements for Institutional Credit for Agriculture and Rural
Development (CRAFICARD), set up by the Reserve Bank of India (RBI) under the Chairmanship of
Shri B. Sivaraman, conceived and recommended the establishment of the National Bank for
Agriculture and Rural Development (NABARD). It was established on 12 July 1982 by a special act
by the parliament and its main focus was to uplift rural India by increasing the credit flow for
elevation of agriculture & rural non farm sector and completed its 25 years on 12 July 2007. [4] It has
been accredited with "matters concerning policy, planning and operations in the field of credit
for agriculture and other economic activities in rural areas in India". RBI sold its stake in NABARD to
the Government of India, which now holds 99% stake. [5] NABARD is active in developing financial
inclusion policy and is a member of the Alliance for Financial Inclusion.[6]
Contents
[hide]

1 History

2 Associated with NABARD

3 Role

4 Rural innovation

5 Microfinance and NABARD

6 NABARD a 100 % CSR company

7 References

8 External links

History[edit]
NABARD was established on the recommendations of Shivaraman Committee, (by act 61, 1981 of
Parliament) on 12 July 1982 to implement the National Bank for Agriculture and Rural Development
Act 1981. It replaced the Agricultural Credit Department (ACD) and Rural Planning and Credit Cell
(RPCC) of Reserve Bank of India, and Agricultural Refinance and Development Corporation
(ARDC). It is one of the premier agencies to provide credit in rural areas. Nabard is India's
specialised bank.

Associated with NABARD[edit]

International associates of NABARD ranges from World Bank-affiliated organizations to global
developmental agencies working in the field of agriculture and rural development. These
organizations help NABARD by advising and giving monetary aid for the upliftment of the people in
the rural areas and optimizing the agricultural process. [7]

Role[edit]

NABARD is the apex institution in the country which looks after the development of the cottage
industry, small industry and village industry, and other rural industries. NABARD also reaches out to
allied economies and supports and promotes integrated development. And to help NABARD
discharge its duty, it has been given certain roles as follows:
1. Serves as an apex financing agency for the institutions providing investment and production
credit for promoting the various developmental activities in rural areas
2. Takes measures towards institution building for improving absorptive capacity of the credit
delivery system, including monitoring, formulation of rehabilitation schemes, restructuring of
credit institutions, training of personnel, etc.
3. Co-ordinates the rural financing activities of all institutions engaged in developmental work at
the field level and maintains liaison with Government of India, State Governments, Reserve
Bank of India (RBI) and other national level institutions concerned with policy formulation
4. Undertakes monitoring and evaluation of projects refinanced by it.
5. NABARD refinances the financial institutions which finances the rural sector.
6. The institutions which help the rural economy, NABARD helps develop.
7. NABARD also keeps a check on its client institutes.
8. It regulates the institution which provides financial help to the rural economy.
9. It provides training facilities to the institutions working the field of rural upliftment.
10.It regulates the cooperative banks and the RRBs, and manages talent acquisition
through IBPS CWE.[8]
NABARD's refinance is available to State Co-operative Agriculture and Rural Development Banks
(SCARDBs), State Co-operative Banks (SCBs), Regional Rural Banks (RRBs), Commercial Banks
(CBs) and other financial institutions approved by RBI. While the ultimate beneficiaries of investment
credit can be individuals, partnership concerns, companies, State-owned corporations or cooperative societies, production credit is generally given to individuals. NABARD has its head office at
Mumbai, India.
NABARD operates throughout the country through its 28 Regional Offices and one Sub-office,
located in the capitals of all the states/union territories. Each Regional Office[RO] has a Chief
General Manager [CGMs] as its head, and the Head office has several Top executives like the
Executive Directors[ED], Managing Directors[MD], and the Chairperson.It has 336 District Offices
across the country, one Sub-office at [[Port Blair]] and one special cell at Srinagar. It also has 6
training establishments.
NABARD is also known for its 'SHG Bank Linkage Programme' which encourages India's banks to
lend to [[self-help group (finance)|self-help groups]] (SHGs). Because SHGs are composed mainly of
poor women, this has evolved into an important Indian tool for microfinance. As of March 2006 22
lakh SHGs representing 3.3 crore members had to been linked to credit through this programme. [9]
NABARD also has a portfolio of Natural Resource Management Programmes involving diverse fields
like Watershed Development, Tribal Development and Farm Innovation through dedicated funds set
up for the purpose.

Rural innovation[edit]
NABARD role in rural development in India is phenomenal. [10] National Bank For Agriculture & Rural
Development (NABARD) is set up as an apex Development Bank by the Government of India with a
mandate for facilitating credit flow for promotion and development of agriculture, cottage and village
industries. The credit flow to agriculture activities sanctioned by NABARD reached Rs 1,57,480 crore
in 2005-2006. The overall GDP is estimated to grow at 8.4 per cent. The Indian economy as a whole
is poised for higher growth in the coming years. Role of NABARD in overall development of India in
general and rural & agricultural in specific is highly pivotal.
Through assistance of Swiss Agency for Development and Cooperation, NABARD set up the Rural
Infrastructure Development Fund. Vrajlal Sapovadia noted schemes for the bank for rural
development. [11] Under the RIDF scheme Rs. 51,283 crore have been sanctioned for 2,44,651
projects covering irrigation, rural roads and bridges, health and education, soil conservation, water
schemes etc. Rural Innovation Fund is a fund designed to support innovative, risk friendly,
unconventional experiments in these sectors that would have the potential to promote livelihood
opportunities and employment in rural areas.[12] The assistance is extended to Individuals, NGOs,
Cooperatives, Self Help Group, and Panchayati Raj Institutions who have the expertise and
willingness to implement innovative ideas for improving the quality of life in rural areas. Through
member base of 25 crore, 600000 cooperatives are working in India at grass root level in almost
every sector of economy. There are linkages between SHG and other type institutes with that of
cooperatives.
The purpose of RIDF is to promote innovation in rural & agricultural sector through viable means.
Effectiveness of the program depends upon many factors, but the type of organization to which the
assistance is extended is crucial one in generating, executing ideas in optimum commercial way.
Cooperative is member driven formal organization for socio-economic purpose, while SHG is
informal one. NGO have more of social color while that of PRI is political one. Does the legal status
of an institute influences effectiveness of the program? How & to what an extent? Cooperative type
of organization is better (Financial efficiency & effectiveness) in functioning (agriculture & rural
sector) compared to NGO, SHG & PRIs.[13]
Recently in 2007-08, NABARD has started a new direct lending facility under 'Umbrella Programme
for Natural Resource Management' (UPNRM). Under this facility financial support for natural
resource management activities can be provided as a loan at reasonable rate of interest. Already 35
projects have been sanctioned involving loan amount of about Rs 1000 crore. The sanctioned
projects include honey collection by tribals in Maharashtra, tussar value chain by a women producer
company ('MASUTA'), eco-tourism in Karnataka[14] etc.[15]

Microfinance and NABARD[edit]

Thus the Reserve Bank of INDIA and NABARD has laid out certain guidelines in 06-07 for the
commercial banks, Regional Rural Banks and Cooperative Banks to provide the data to RBI and es
data regarding loans given by banks to the microfinance institutions.[16]

NABARD a 100 % CSR company[edit]

NABARD has been instrumental in grounding rural,social innovations and social enterprises in the
rural hinterlands. This endeavour is perhaps unparalleled in the country, it has in the process
partnered with about 4000 partner organisations in grounding many of the interventions be it, SHGBank Linkage programme, tree-based tribal communities livelihoods initiative, watershed approach
in soil and water conservation, increasing crop productivity initiatives through lead crop initiative or
dissemination of information flow to agrarian communities through Farmer clubs.Despite all this, it
pays huge taxes too, to the exchequer figuring in the top 50 tax payers consistently. NABARD

virtually ploughs back all the profits for development spending, in their unending search for solutions
and answers. Thus the organisation had developed a huge amount of trust capital in its 3 decades of
work with rural communities.[17]