Private Bank and National is Ed Bank Doc 2
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Private Bank andPrivate Bank and
Nationalised BankNationalised Bank
Prepared by:Ankit.H.BhattPrepared by:Ankit.H.Bhatt
Roll No:01Roll No:01
S.Y.BMSS.Y.BMSSubject:Banking and InsuranceSubject:Banking and Insurance
Submit to :Reshma MissSubmit to :Reshma Miss
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DefinitionDefinition
Private banksPrivate banks areare banksbanks that are notthat are not incorporatedincorporated..A private bank is owned by either an individual or aA private bank is owned by either an individual or ageneral partner(s) with limited partner(s). In anygeneral partner(s) with limited partner(s). In any
such case, the creditors can look to both thesuch case, the creditors can look to both the
"entirety of the bank's assets" as well as the entirety"entirety of the bank's assets" as well as the entiretyof the soleof the sole--proprietor's/generalproprietor's/general--partners' assets.partners' assets.
Nationalised bankNationalised bank is the government bank that is theis the government bank that is the
repository of all deposits payable to the government . It is arepository of all deposits payable to the government . It is abank that has been taken over by the governmentbank that has been taken over by the government -- in otherin otherwords, it is no longer privately owned.words, it is no longer privately owned.
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History of Private Banks in IndiaHistory of Private Banks in India
Private bankPrivate bank
The new private banks emerged on theThe new private banks emerged on theIndian financial topography inIndian financial topography in1994.narsimha committee envisaged a large1994.narsimha committee envisaged a largerole for the private sector banks in 1991.role for the private sector banks in 1991.
The RBI issued the fresh banking licensesThe RBI issued the fresh banking licenses
to the private sector banksto the private sector banksThe new private sector banks have grownThe new private sector banks have grown
through the mergers and acquisitions.through the mergers and acquisitions.
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History of nationalised bank in IndiaHistory of nationalised bank in India
Commercial banks were operating like anyCommercial banks were operating like any
other business and they were mainlyother business and they were mainly
concerned with the maximisation of theirconcerned with the maximisation of theirprivate gains. They were lacking in socialprivate gains. They were lacking in social
purpose.purpose.
Therefore, On July 19th ,1969 fourteenTherefore, On July 19th ,1969 fourteen
commercial banks with deposit worth Rs. 50commercial banks with deposit worth Rs. 50
corer or more were nationalised by thecorer or more were nationalised by the
government. This was hailed as a historicgovernment. This was hailed as a historic
event by the people.event by the people.
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Objectives of nationalised bankObjectives of nationalised bank
Provision of adequate credit for agricultureProvision of adequate credit for agriculture
and small scale industry and exportand small scale industry and export
Encouragement of anew class ofEncouragement of anew class ofentrepreneurs.entrepreneurs.
The provision of adequate training as well asThe provision of adequate training as well as
terms of service for the bank staff.terms of service for the bank staff.
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Objectives of private banksObjectives of private banks
Profit maximisationProfit maximisation
customer satisfactioncustomer satisfaction
Enabling Conditions for businessEnabling Conditions for business
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Which is better nationalised bank orWhich is better nationalised bank or
private bankprivate bank
Nationalised banks are one grade safer than theNationalised banks are one grade safer than theprivate banks .because if nationalised bank goesprivate banks .because if nationalised bank goesbankrupt than the money of depositors will bebankrupt than the money of depositors will be
paid from the budget of government of Indiapaid from the budget of government of India But it doesnt mean that you should not doBut it doesnt mean that you should not do
banking with the private sector banks .privatebanking with the private sector banks .private
sector banks sometimes can give you moresector banks sometimes can give you moreservices like internet banking, at door serviceservices like internet banking, at door serviceetcetc
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ContCont
Any banks health weather it is a private or aAny banks health weather it is a private or anationalised is depending on certain ratiosnationalised is depending on certain ratios
The health indicators of any bank are as belowThe health indicators of any bank are as below
NPANPA--Non Performing asset ratioNon Performing asset ratio-- the lower thethe lower theNPA, the betterNPA, the better
CARCAR-- Capital adequacy ratioCapital adequacy ratio the minimumthe minimum
CAR is 9%,the higher the betterCAR is 9%,the higher the better NIMNIM--Net interest marginNet interest margin the higher the NIM,the higher the NIM,
the betterthe better
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ContCont
Cost to income ratioCost to income ratio The lower the betterThe lower the better
CD RatioCD Ratio-- credit to deposit ratiocredit to deposit ratio-- higher CDhigher CD
ratio reflect more credit being given out ,lowerratio reflect more credit being given out ,lowerthe betterthe better
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Other main points to be rememberedOther main points to be remembered
If a private sector bank goes bankrupt stocksIf a private sector bank goes bankrupt stocks
,government bonds, government securities,government bonds, government securities,mutual funds units , and any other demat,mutual funds units , and any other demat
holding is absolutely safe and secureholding is absolutely safe and secure
Because according to the law, all the dematBecause according to the law, all the demat
holding are in custody of SEBI and in theholding are in custody of SEBI and in the
custody of bank weather it is nationalised orcustody of bank weather it is nationalised orprivateprivate
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ContCont
According to laws of the government of india,According to laws of the government of india,
the banks guarantee up to Rs.1 lakh in case athe banks guarantee up to Rs.1 lakh in case acrisis affecting the bank .crisis affecting the bank .
So deposits up to Rs. 1 lakh in any private bankSo deposits up to Rs. 1 lakh in any private bankis also safe in case of bankruptcy of privateis also safe in case of bankruptcy of private
bank . But any amount in excess of Rs.1 lakhbank . But any amount in excess of Rs.1 lakh
will be not refund to you and lost in case of ifwill be not refund to you and lost in case of ifprivate bank goes bankruptprivate bank goes bankrupt
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Differences between private bankDifferences between private bank
and nationalised bankand nationalised bank Nationalised bankNationalised bank
Public Sector bank meansPublic Sector bank meansany Government Sectorany Government Sector
Bank/Institute that goesBank/Institute that goespublic... that the main mottopublic... that the main mottoof social welfare other thanof social welfare other thanMaximising Profit remains.Maximising Profit remains.
Private bankPrivate bank
Where as Private SectorWhere as Private SectorBanks are those Banks whereBanks are those Banks where
the management is controlledthe management is controlledby Private individualsby Private individuals.Maximising profit is the.Maximising profit is thebasic motto.basic motto.
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Differences between private bankDifferences between private bank
and nationalised bankand nationalised bank Nationalised bankNationalised bank
Nationalised banks followNationalised banks followthe RBI Interest rules strictlythe RBI Interest rules strictly
Private bankPrivate bank
private banks couldprivate banks could
have some changeshave some changesbut only after thebut only after the
approval from theapproval from the
RBI!RBI!
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Thank YouThank You