Indian Banks

The evolution of State Bank of India can be traced back to the first decade of the 19th century. It began with the establishment of the Bank of Calcutta in Calcutta, on 2 June 1806. The bank was redesigned as the Bank of Bengal, three years later, on 2 January 1809. It was the first ever joint-stock bank of the British India, established under the sponsorship of the Government of Bengal. Subsequently, the Bank of Bombay (established on 15 April 1840) and the Bank of Madras (established on 1 July 1843) followed the Bank of Bengal. These three banks dominated the modern banking scenario in India, until when they were amalgamated to form the Imperial Bank of India, on 27 January 1921.

An important turning point in the history of State Bank of India is the launch of the first Five Year Plan of independent India, in 1951. The Plan aimed at serving the Indian economy in general and the rural sector of the country, in particular. Until the Plan, the commercial banks of the country, including the Imperial Bank of India, confined their services to the urban sector. Moreover, they were not equipped to respond to the growing needs of the economic revival taking shape in the rural areas of the country. Therefore, in order to serve the economy as a whole and rural sector in particular, the All India Rural Credit Survey Committee recommended the formation of a state-partnered and state-sponsored bank.

The All India Rural Credit Survey Committee proposed the take over of the Imperial Bank of India, and integrating with it, the former state-owned or state-associate banks. Subsequently, an Act was passed in the Parliament of India in May 1955. As a result, the State Bank of India (SBI) was established on 1 July 1955. This resulted in making the State Bank of India more powerful, because as much as a quarter of the resources of the Indian banking system were controlled directly by the State. Later on, the State Bank of India (Subsidiary Banks) Act was passed in 1959. The Act enabled the State Bank of India to make the eight former State-associated banks as its subsidiaries.

The State Bank of India emerged as a pacesetter, with its operations carried out by the 480 offices comprising branches, sub offices and three Local Head Offices, inherited from the Imperial Bank. Instead of serving as mere repositories of the community’s savings and lending to creditworthy parties, the State Bank of India catered to the needs of the customers, by banking purposefully. The bank served the heterogeneous financial needs of the planned economic development.

The roots of the State Bank of India rest in the first decade of 19th century, when the Bank of Calcutta, later renamed the Bank of Bengal, was established on 2 June 1806. The Bank of Bengal and two other Presidency banks, namely, the Bank of Bombay (incorporated on 15 April 1840) and the Bank of Madras (incorporated on 1 July 1843). All three Presidency banks were incorporated as joint stock companies, and were the result of the royal charters. These three banks received the exclusive right to issue paper currency in 1861 with the Paper Currency Act, a right they retained until the formation of the Reserve Bank of India. The Presidency banks amalgamated on 27 January 1921, and the reorganized banking entity took as its name Imperial Bank of India. The Imperial Bank of India continued to remain a joint stock company.

Pursuant to the provisions of the State Bank of India Act (1955), the Reserve Bank of India, which is India’s central bank, acquired a controlling interest in the Imperial Bank of India. On 30 April 1955 the Imperial Bank of India became the State Bank of India. The Govt. of India recently acquired the Reserve Bank of India’s stake in SBI so as to remove any conflict of interest because the RBI is the country’s banking regulatory authority.

In 1959 the Government passed the State Bank of India (Subsidiary Banks) Act, enabling the State Bank of India to take over eight former State-associated banks as its subsidiaries. On Sept 13, 2008, State Bank of Saurashtra, one of its Associate Banks, merged with State Bank of India.

SBI has acquired local banks in rescues. For instance, in 1985, it acquired Bank of Cochin in Kerela, which had 120 branches. SBI was the acquirer as its affiliate, State Bank of Travancore, already had an extensive network in Kerala.

There are six associate banks that fall under SBI, and together these six banks constitute the State Bank Group. All use the same logo of a blue keyhole and all the associates use the “State Bank of” name followed by the regional headquarters’ name. Originally, the then seven banks that became the associate banks belonged to princely states until the government nationalized them between October, 1959 and May, 1960. In tune with the first Five Year Plan, emphasizing the development of rural India, the government integrated these banks into State Bank of India to expand its rural outreach. There has been a proposal to merge all the associate banks into SBI to create a “mega bank” and streamline operations. The first step along these lines occurred on 13 August 2008 when State Bank of Saurashtra merged with State Bank of India, which reduced the number of state banks from seven to six. Furthermore on 19th June 2009 the SBI board approved the merger of its subsidiary, State Bank of Indore, with itself. SBI holds 98.3% in the bank, and the balance 1.77% is owned by individuals, who held the shares prior to its takeover by the government.

The acquisition of State Bank of Indore will help SBI add 470 branches to its existing network of 11,448. Also, following the acquisition, SBI’s total assets will inch very close to the Rs 10-lakh crore mark. Total assets of SBI and the State Bank of Indore stood at Rs 998,119 crore as on March 2009.

The Subsidiaries of SBI till date

• State Bank of Indore
• State Bank of Bikaner & Jaipur
• State Bank of Hyderabad
• State Bank of Mysore
• State Bank of Patiala
• State Bank of Travancore

Growth

State Bank of India has often acted as guarantor to the Indian Government, most notably during Chandra Shekhar’s tenure as Prime Minister of India. With 11,448 branches and a further 6500+ associate bank branches, the SBI has extensive coverage. State Bank of India has electronically networked all of its branches under Core Banking System (CBS). The bank has one of the largest ATM networks in the region, with more than 9000 ATMs across India. The State Bank of India has had steady growth over its history, though it was marred by the Harshad Mehta scam in 1992. In recent years, the bank has sought to expand its overseas operations by buying foreign banks. It is the only Indian bank to feature in the top 100 world banks in the Fortune Global 500 rating and various other rankings.

Popularity: 7% [?]

The Karnataka Bank was incorporated on February 18, 1924, as The Karnataka Bank Limited at Mangalore, a coastal town in the Dakshina Kannada district of Madras Presidency, and commenced business on May 23, 1924. ^[10] Among the founders, who created the bank to serve the South Kanara region, was B. R. Vysarayachar.  Another important personality associated with the bank was K. S. N. Adiga, who served as Chairman from 1958 to 1979.

• 1964: The Bank took over the assets and liabilities of the Chitradurga Bank (also known as Chitladurg Bank), which was established in 1868 in Mysore State and was the oldest bank in Mysore.
• 1966: The Bank took over the assets and liabilities of the Bank of Karnataka, in Hubli, which had been established in 1946 and which had opened one branch in Belgaum in 1947.

At some earlier point the bank also acquired the Sringeri Sharada Bank.

In the year 2000, Karnataka Bank signed a memorandum of understanding with Infosys Technologies to develop a core-banking solution called FINACLE. Over 221 branches were networked up to March 31, 2004. ^[12] The main motto of this programme is “Anytime/Anywhere banking”. ^[12] In 2002, the bank concluded a pact with Corporation Bank for sharing its ATMs. ^[11] A year later, the bank introduced the Moneyplant card that allows customers to withdraw money from any of their Karnataka bank accounts.In September 2003, the bank shifted its head office from Kodialbail to Kankanady.

The state of Karnataka, particularly the region comprising the coastal districts of Dakshina Kannada and Udupi is called as the cradle of banking in India.This is because seven of the country’s leading banks, Canara Bank, Syndicate Bank, Corporation Bank,Vijaya Bank,Karnataka Bank, Vysya Bank and the State Bank of Mysore originated from this state.The first five in the above list of banks were established in the districts of Udupi and Dakshina Kannada. These districts have one among the best distribution of banks in India – a branch for every 500 persons.Between 1880 and 1935, 22 banks were established in coastal Karnataka, nine of them in the city of Mangalore.

The origin of banking in Karnataka’s coastal region can be traced to the year 1868 when the Presidency Bank of Madras opened a branch to cater to the needs of British companies involved in exporting plantation produce. In the year 1912, the Indian Co-operative Societies Act in 1912 further energised the financial sector in this region leading to the establishment of a lot of co-operative societies. The freedom movement of India also played a crucial role as can be seen in the establishment of Karnataka Bank which was created as an offshoot of the swadeshi movement of 1905. These banks were earlier created to address the main sector in the economy i.e. agriculture but later they diversified to address other economical sectors as well.

The Indian Government’s notification of nationalisation of banks in the year 1969 and 1980, resulted in lot of these banks being nationalised with the Indian Government now owning some amount of control over these banks. As of today, State Bank of Mysore, Canara Bank, Vijaya Bank and Vysya Bank have their headquarters in Bangalore, Corporation Bank and Karnataka Bank are headquartered in Mangalore while Syndicate Bank is headquartered in manipal. The entry of the private sector into the banking sector with aggressive marketing has led these banks to rethink some of their strategies. Earlier, banking was the main activity that was undertaken by these banks but due to the competition, they have been forced to diversify into other areas like isurance equity and mutual funds.They have also been forced to upgrade their technology and introduce services like ATMs and online-banking transactions.

As of March 2002, Karnataka had 4767 branches of different banks servicing the people of the state. The number of people served by each branch was 11,000 which is lesser than the national average of 16,000, thereby indicating better penetration of banking in the state

Popularity: 3% [?]

ING Vysya Bank Ltd came into being in October 2002, when erstwhile Vysya Bank Ltd was merged with ING, a global financial powerhouse boasting of Dutch origin. Vysya Bank Ltd, one of initial banks to be set up in the private sector of India, was established in the year 1930, with the aim of providing a helping hand to all those who couldn’t afford the privilege of enjoying the services of a bank. Eighteen years later, in 1948, the bank was listed as one of the Scheduled Banks of the country. With the passing time, Vysya Bank aimed at the number one position in all the private sector banks.

In 1985, the dream of Vysya Bank’s promoters came true and it became the largest private sector bank of India. Two years later, it laid the foundation of Vysya Bank Leasing Ltd. The following year, the bank was credited with laying down the innovative concept of ‘Co branding of Credit Cards’. In 1990, Vysya Bank promoted a new entity – Vysya Bank Housing Finance Ltd. By 1992, the bank had reached another milestone, by having its deposits cross Rs. 1000 crores and the very next year, the number of its branches had gone past 300.

In the year 1996, Vysya Bank struck a strategic alliance with BBL Belgium and was also honored with two National Awards by Gem & Jewellery Export Promotion Council, for excellent performance in Export Promotion. Hardly two years later, the bank had introduced Cash Management Services and the commissioning of VSAT and was also rated as the Best Domestic Bank in India, by Global Finance (International Financial Journal – June 1998). Soon (2000), it established a state-of-the-art Date Centre, at ITPL, Bangalore.

It was in 2000 only that ING and Vysya Bank set up ING Vysya Life Insurance Company, after receiving RBI nod, commencing its business in the following year. Two years later, a wide range of services were launched, including Vys Vyapar Plus – the range of loan schemes for traders, ATM services, Smartserv – personal assistant service, Save & Secure – an account that provides accident hospitalization and insurance cover, Sambandh – the International Debit Card and the mi-b@nk net banking service.

In 2002, ING took over the management of Vysya Bank and RBI gave its permission for the new name of the bank to be ‘ING Vysya Bank Ltd’. In the following year, the bank introduced customer friendly products, mainly Orange Savings, Orange Current and Protected Home Loans. Its innovative products in the coming years included Solo – My Own Account for youth and Customer Service Line – Phone Banking Service (2005) and ‘AAA’ transactions – Anywhere, Anytime & Anyhow Banking – through networking of all its braches (2006).
In the year 1930 a team of visionaries came together to found a bank in Bangalore (now Bengaluru) that would extend a helping hand to those who weren’t privileged enough to enjoy banking services. It was named Vysya Bank. In 1948 it became a scheduled bank. On 7 October, 2002 ING Group N.V. takes over the Management of the Bank. Currently this bank has more than 300 branches spread all over India.

The long journey of seventy-five years has had several milestones…

Popularity: 3% [?]

Indian Overseas Bank (IOB; established 1937) is a major bank based in Chennai (Madras), with 1950 domestic branches and six branches overseas. Indian Overseas Bank has an ISO certified inhouse Information Technology department, which has developed the software that 900 branches use to provide online banking to customers; the bank has a target to expand online banking to 1200 branches by the end of financial year 2007-08. IOB also has a network of about 600 ATMs all over India and IOB’s International VISA Debit Card is accepted at all ATMs belonging to the Cash Tree and NFS networks. IOB offers internet Banking (E-See Banking) and is one of the banks that the Govt. of India has approved for online payment of taxes.

Popularity: 3% [?]

ICICI Bank started as a wholly owned subsidiary of ICICI Limited, an Indian financial institution, in 1994. Four years later, when the company offered ICICI Bank’s shares to the public, ICICI’s shareholding was reduced to 46%. In the year 2000, ICICI Bank offered made an equity offering in the form of ADRs on the New York Stock Exchange (NYSE), thereby becoming the first Indian company and the first bank or financial institution from non-Japan Asia to be listed on the NYSE. In the next year, it acquired the Bank of Madura Limited in an all-stock amalgamation. Later in the year and the next fiscal year, the bank made secondary market sales to institutional investors.

With a change in the corporate structure and the budding competition in the Indian Banking industry, the management of both ICICI and ICICI Bank were of the opinion that a merger between the two entities would prove to be an essential step. It was in 2001 that the Boards of Directors of ICICI and ICICI Bank sanctioned the amalgamation of ICICI and two of its wholly-owned retail finance subsidiaries, ICICI Personal Financial Services Limited and ICICI Capital Services Limited, with ICICI Bank. In the following year, the merger was approved by its shareholders, the High Court of Gujarat at Ahmedabad as well as the High Court of Judicature at Mumbai and the Reserve Bank of India.
ICICI Bank (formerly Industrial Credit and Investment Corporation of India) is India’s largest private sector bank by market capitalisation and second largest overall in terms of assets. Bank has total assets of Rs. 3,793.01 billion (US$ 75 billion) at March 31, 2009 and profit after tax Rs. 37.58 billion for the year ended March 31, 2009. The Bank also has a network of 1,520 branches and about 4,721 ATMs in India and presence in 18 countries, as well as some 24 million customers (at the end of July 2007). ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and specialised subsidiaries and affiliates in the areas of investment banking, life and non-life insurance, venture capital and asset management. (These data are dynamic.) ICICI Bank is also the largest issuer of credit cards in India. ICICI Bank has got its equity shares listed on the stock exchanges at kolkata and vadodara mumbai and the National Stock Exchange of India Limited, and its ADRs on the New York Stock Exchange (NYSE). The Bank is expanding in overseas markets and has the largest international balance sheet among Indian banks. ICICI Bank now has wholly-owned subsidiaries, branches and representatives offices in 18 countries, including an offshore unit in Mumbai. This includes wholly owned subsidiaries in Canada, Russia and the UK (the subsidiary through which the HiSAVE savings brand is operated), offshore banking units in Bahrain and Singapore, an advisory branch in Dubai, branches in Belgium, Hong Kong and Sri Lanka, and representative offices in Bangladesh, China, Malaysia, Indonesia, South Africa, Thailand, the United Arab Emirates and USA. Overseas, the Bank is targeting the NRI (Non-Resident Indian) population in particular.

ICICI reported a 1.15% rise in net profit to Rs. 1,014.21 crore on a 1.29% increase in total income to Rs. 9,712.31 crore in Q2 September 2008 over Q2 September 2007. The bank’s current and savings account (CASA) ratio increased to 30% in 2008 from 25% in 2007.

ICICI Bank is one of the Big Four Banks of India with State Bank of India, Axis Bank and HDFC

ICICI Bank was promoted by ICICI (Industrial Credit and Investment Corporation of India) Limited in 1994 as its wholly owned subsidiary. ICICI’s share holding reduced to 46% after a public issue in 1998 and a subsequent equity offering of American depository receipts (ADR) listed in New York stock exchange in 2000.

Incidentally ICICI was established on World Bank’s initiative by Government of India and Indian industry representatives in 1955. It was created with aim of providing long and medium term financial assistance to Indian industries and businesses. In 1990s, ICICI transformed itself from a developmental finance institute to an organization offering diversified financial services to individuals and corporations. ICICI holds distinction of being first Indian company and first financial institution from Asia, apart from Japan, to be listed on New York Stock Exchange.

Popularity: 7% [?]

HDFC Bank Ltd. is a commercial bank of India, incorporated in August 1994, after the Reserve Bank of India allowed establishing private sector banks. The Bank was promoted by the Housing Development Finance Corporation, a premier housing finance company (set up in 1977) of India. HDFC Bank has 1,412 branches and over 3,295 ATMs, in 528 cities in India, and all branches of the bank are linked on an online real-time basis. As of September 30, 2008 the bank had total assets of INR 1006.82 billion.For the fiscal year 2008-09, the bank has reported net profit of Rs.2,244.9 crore, up 41% from the previous fiscal. Total annual earnings of the bank increased by 58% reaching at Rs.19,622.8 crore in 2008-09

In 2008 HDFC Bank acquired Centurion Bank of Punjab taking its total branches to more than 1,000. Though, the official license was given to Centurion Bank of Punjab branches, to continue working as HDFC Bank branches, on May 23, 2008

Housing Development Finance Corporation Limited, more popularly known as HDFC Bank Ltd, was established in the year 1994, as a part of the liberalization of the Indian Banking Industry by Reserve Bank of India (RBI). It was one of the first banks to receive an ‘in principle’ approval from RBI, for setting up a bank in the private sector. The bank was incorporated with the name ‘HDFC Bank Limited’, with its registered office in Mumbai. The following year, it started its operations as a Scheduled Commercial Bank.

Amalgamations
In 2002, HDFC Bank witnessed its merger with Times Bank Limited (a private sector bank promoted by Bennett, Coleman & Co. / Times Group). With this, HDFC and Times became the first two private banks in the New Generation Private Sector Banks to have gone through a merger. In 2008, RBI approved the amalgamation of Centurion Bank of Punjab with HDFC Bank. With this, the Deposits of the merged entity became Rs. 1,22,000 crore, while the Advances were Rs. 89,000 crore and Balance Sheet size was Rs. 1,63,000 crore.

Tech-Savvy
HDFC Bank has always prided itself on a highly automated environment, be it in terms of information technology or communication systems. All the braches of the bank boast of online connectivity with the other, ensuring speedy funds transfer for the clients. At the same time, the bank’s branch network and Automated Teller Machines (ATMs) allow multi-branch access to retail clients. The bank makes use of its up-to-date technology, along with market position and expertise, to create a competitive advantage and build market share.

Popularity: 5% [?]

Dena Bank is an Indian commercial bank based in Mumbai. The bank was founded by the Devkaran Nanjee family on the 26th of May, 1938. At the time of establishment, its name was Devkaran Nanjee Banking Company Ltd. Further, the banking company was incorporated as a Public Ltd. Company in December 1939, changing its name to Dena Bank Ltd. The bank was nationalized by the Government of India along with 13 other commercial banks in the year 1969.

Key Attributes
Dena Bank was one of the six Public Sector Banks which had been chosen by the World Bank in the year 1995 for granting a loan of Rs. 72.3 Crores under Financial Sector Development project. Also, it is one of the few banks which have been given a loan by the World Bank for technological advancement and training. Dena Bank has maintained a strong technological infrastructure with state-of-the-art IT innovations and solutions implemented at its branches and back-end.

100% branches of the bank have been fully computerized, and the bank has established its own network called “DENANET” to ensure seamless connectivity and smooth workflow all the way through its banking process. DENANET is comprised of VSATs, leased lines, dial-up lines and ISDN backups, and is completely integrated with the Indian Financial Network (INFINET) of the Reserve Bank of India (RBI).

Regular Banking Services
Dena Bank offers a host of Regular Banking Services to its customers, including Personal Baking Services comprising of Deposit, Loan and Investment Services, Priority and Small & Medium Enterprises (SME) services, International Baking Services, Corporate Banking Services and a host of other Value Added Services.

Network Based Services
Leveraging the potential of its own advanced high-speed Information Network DENANET, Dena Bank offers a host of network based services to its customers in addition to the Regular Banking Services. These services include Data Transfer, Remote Support, Real Time Gross Settlement (RTGS), Dena BillPay, Dena m-banking, Any Branch Banking, Multi-City Cheque Facility, Internet Banking and Dena e-Tax Pay.

• Dena Bank was founded by the family of Devkaran Nanjee under the name Devkaran Nanjee Banking Company Ltd.
• It found its new name, Dena Bank Ltd. when it was incorporated as a Public Company in Dec 1939.
• It is one of the most prestigious banks of India having a good market share.
• Dena Bank was nationalised (and therefore dropped the ‘Ltd.’ from its name) in 1969 along with 13 other banks in India.
• It is one of the earliest Banks in India.

In July 1969 Dena bank Ltd. along with 13 other major banks was nationalized and is now a Public Sector Bank constituted under the Banking Companies (Acquisition & Transfer of Undertakings) Act, 1970. Under the provisions of the Banking Regulations Act 1949, in addition to the business of banking, the Bank can undertake other business as specified in Section 6 of the Banking Regulations Act, 1949.

Popularity: 1% [?]

Punjab & Sind Bank, established in 1908, is headquartered at New Delhi. Having more than 800 branches across the country, the bank has around 10,000 employees dedicated to the banking services and customer care. The bank offers usual banking services along with innovative banking methods including Internet and phone banking, international banking, merchant banking, hire, purchase, leasing and credit cards.

Objective
The bank was founded by luminaries like Bhai Vir Singh, Sir Sunder Singh Majitha and Sardar Tarlochan Singh in the holy city of Amritsar on the principle of social commitment to help the weaker section of the society in their economic endeavours to raise their standard of life.

Achievements and Activities
Punjab & Sind Bank is the first bank in Northern India to obtain ISO 9002 certification for its selected branches. Its Housing Finance Branch caters to the credit need of the house aspirants.

The bank has entered into agreements for Non Life insurance business with M/s Bajaj Allianz General Insurance Company and Life Insurance business arrangements with M/s Aviva Life Insurance Company India Pvt. Ltd. Its customers can now avail insurance related services under one roof.

Nationalisation
Punjab & Sind Bank was nationalized in 1980 along with six other banks by the Government of India.

In 1908, leading figures such as Bhai Vir Singh, Sir Sunder Singh Majitha and Sardar Tarlochan Singh founded Punjab & Sind Bank to help the weaker section of the society in their economic endeavours to raise their standard of life.

Punjab and Sind bank was the one of the few banks in northern India who has honored the obligations of the migrating people from Pakistan. In spite of the fact that all its major branches were left in Pakistan and only a few branches were in India after partition.

In 1980 Punjab & Sind Bank was among six banks that the Government of India nationalized in the second wave of nationalizations. (The first wave had been in 1969 when the government nationalized the top 14 banks.)

At some point in the 1970s Punjab & Sind Bank established a branch in London. In 1991 Bank of Baroda acquired Punjab & Sind Bank’s London branch.

Misssion of Punjab & Sind Bank

1. The risk management and Internal Control Systems should be properly placed at the right time.

2. Highest level of technology should be adopted and operationlized as well.

3. Customer service should be at the peak of all banking responsibilities.

4. The business should be conducted with transparency and the bank should be responsible for its code of conduct.

5. The financial as well as the non-financial risks should be managed professionally.

6. Profitability should be in accordance with the prudential guidelines of the Bank.

Insurance facilities of Punjab and Sind Bank

Punjab & Sind Bank has tied up with M/s Bajaj Allianz General Insurance Company for offering Non Life insurance. The tie up with M/s Aviva Life Insurance Company India Pvt. Ltd. will offer the life insurance facilities to the customers.

Financial highlights of Punjab and Sind Bank

• Punjab & Sind Bank plans for an IPO in 2010.
• There was 36.3% rise in net profit at Rs 235 crore for the first half ended September 30, 2009.
• For the same period in 2008, the net profit stood at Rs 172 crore.
• The total income surged up by 24.23% to Rs 2,057.57 crore during the April-September period of 2009. In 2008, the figure stood at Rs 1,656.29 crore.
• The total business of the bank touched Rs 66,751 crore as on September 30, 2009, with that of Rs 51,104 crore in the same period in 2008. A growth of 24.23% was identified.

Popularity: 1% [?]