KNOW INDIAN ECONOMY

CURRENT BANKING RATE (AS ON 16TH JUNE , 2008 )


BANK RATE - 6.00 %

REPO RATE - 8.00 %

REVERSE REPO RATE - 6.00 %

CRR - 8.25 %

SLR - 25.00 %

PLR - 12.75 % - 13.25 %

SAVING BANK RATE - 3.5 %

DEPOSIT RATE - 7.50 % - 9.60 %

BANKING SYSTEM :

1.Money market It refers to borrowing and lending. 2 parts organized and unorganized sector – Organized sector are State Bank, 7 associated banks, 19 Nationalised banks, RRB, Co-operative Banks, Non Governmental sector and other Banks. Unorganized includes the moneylenders and indigenous bankers. 2.Development of Indian Banking: Bank of Hindusthan 1779 was first bank at Calcuttaunder European management-Bank of Bengal 1806 , Bank of Bombay 1840, bank of Madras 1843, were called Presidency banks. 1881- First Bank with limited liability to be managed by Indian Board namely the Oudh Commercial bank- 1894- First purely Indian bank was Punjab National bank- Later Imperial bank 1921 by amalgamating the Presidency banks. RBI created in 1935- nationalized in 1949 – Imperial Bank, renamed as SBI in 1955- 14 Banks (50 crores) nationalized6-96 Banks (2 00crores) nationalized 1980 – N.B.I. merged with P.N.B. in 1993. 3.R.B.I: It has Governor and Board of Directors apart from Central Board 4 local boards. It has following functions: -

Functions Of Banks :

1.Issue of Notes: followed Minimum Reserve System(MRS) – 200 Crore(115Crore gold+85Crore foreign exchange etc.)

2.Banker , Agent and Adviser to the Govt

3.Banker’s Bank : Banking Regulation Act 1949 - Lender to the last resort.(loan to Commerlised Bank)