LEGAL FRAME WORK IN BANKS:Banking is defined in section 5(b) of the Banking Regulation Act as the acceptance of deposits of
money from public for the purpose of lending or investment. Such deposits may be repayable on demand or otherwise and withdraw able by check, draft order, or otherwise.
Thus, a Bank must perform two essential functions: 1) Acceptance of public deposits, and 2) Lending or investment of such deposits.
Accepting deposits from public implies that a banker accepts deposits from anyone who offers money for such purposes. However, a banker can refuse to open account for undesirable persons and further, the opening of accounts is subject to certain conditions like proper introduction and identification.
The Know Your Customer guidelines issued by the Reserve Bank of India require Banks to follow certain customer identification procedures for opening of accounts for protecting the banks from frauds, etc., and also for monitoring transactions of a suspicious nature for the purpose of reporting to appropriate authorities for taking anti money laundering measures and combating financing of terrorism.
Deposits Withdraw able by Check
Under section 49a of the Banking Regulation Act, no organization other than a bank is authorized to accept deposits withdraw able by check.
The Saving Bank Scheme run by Indian government, a primary credit society and may other person or firm notified by the government are exempted from this prohibition.
Acceptance of Deposits by Non- Banking Entities
There are also non-banking companies, firms and other unincorporated associations of persons and individuals who accept deposits from the public.
Acceptance of deposits by non-banking financial companies is regulated by the Reserve Bank of India under the Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998 and other directions issued by it under Chapter 3b of the Reserve Bank of India Act.
Other companies are regulated by the central government under the companies (Acceptance of Deposit) Rules, 1975 issued under Section 58A of the Companies Act, 1956.
Individuals, firms and other unincorporated associations of persons whose business includes the business of financial institution or whose principal business is acceptance of deposits, is prohibited under section 45s of the RBI Act (as amended in 1997) from accepting deposits from the public, except relatives.
This prohibition does not apply to acceptance of deposits by those who are mainly engaged in manufacturing or trading.
Banking License
In India, it is necessary to have a license from the Reserve bank under section 22 of the banking regulation act for commencing or carrying on the business of banking.
Every banking company has to use the word bank as part of its name (section 7 of the act) and no company other than a banking company can use the words bank, banker, banking or banking company as a part of the name or for the purpose of business.
Subsidiaries of banks and association of banks in certain cases as also primary credit societies are exempted from this restriction
Objectives of bank regulation
The objectives of bank regulation, and the emphasis, vary between jurisdictions. The most common objectives are: 1. Prudentialto reduce the level of risk bank creditors are exposed to (i.e. to
protect depositors)
2.
3.
Systemic risk reductionto reduce the risk of disruption resulting from adverse
trading conditions for banks causing multiple or major bank failures Avoid misuse of banksto reduce the risk of banks being used for criminal
purposes, e.g. laundering the proceeds of crime 4. 5. To protect banking confidentiality Credit allocationto direct credit to favored sectors
[edit]General
principles of bank regulation
Banking regulations can vary widely across nations and jurisdictions. This section of the article describes general principles of bank regulation throughout the world. [edit]Minimum
requirements
Requirements are imposed on banks in order to promote the objectives of the regulator. The most important minimum requirement in banking regulation is maintaining minimum capital ratios. [edit]Supervisory
review
Banks are required to be issued with a bank license by the regulator in order to carry on business as a bank, and the regulator supervises licenced banks for compliance with the requirements and responds to breaches of the requirements through obtaining undertakings, giving directions, imposing penalties or revoking the bank's licence. [edit]Market
discipline
The regulator requires banks to publicly disclose financial and other information, and depositors and other creditors are able to use this information to assess the level of risk and to make investment decisions. As a result of this, the bank is subject to market discipline and the regulator can also use market pricing information as an indicator of the bank's financial health. [edit]Instruments [edit]Capital
and requirements of bank regulation
requirement
Main article: Capital requirement
The capital requirement sets a framework on how banks must handle their capital in relation to theirassets. Internationally, the Bank for International Settlements' Basel Committee on Banking Supervision influences each country's capital requirements. In 1988, the Committee decided to introduce a capital measurement system commonly referred to as the Basel Capital Accords. The latest capital adequacy framework is commonly known as Basel III. This updated framework is intended to be more risk sensitive than the original one, but is also a lot more complex. [edit]Reserve
requirement
Main article: Reserve requirement The reserve requirement sets the minimum reserves each bank must hold to demand deposits andbanknotes. This type of regulation has lost the role it once had, as the emphasis has moved toward capital adequacy, and in many countries there is no minimum reserve ratio. The purpose of minimum reserve ratios is liquidity rather than safety. An example of a country with a contemporary minimum reserve ratio is Hong Kong, where banks are required to maintain 25% of their liabilities that are due on demand or within 1 month as qualifying liquefiable assets. Reserve requirements have also been used in the past to control the stock of banknotes and/or bank deposits. Required reserves have at times been gold coin, central bank banknotes or deposits, and foreign currency. [edit]Corporate
governance
Corporate governance requirements are intended to encourage the bank to be well managed, and is an indirect way of achieving other objectives. Requirements may include: 1. To be a body corporate (i.e. not an individual, a partnership, trust or other
unincorporated entity) 2. To be incorporated locally, and/or to be incorporated under as a particular type of
body corporate, rather than being incorporated in a foreign jurisdiction. 3. 4. To have a minimum number of directors To have an organisational structure that includes various offices and officers, e.g.
corporate secretary, treasurer/CFO, auditor, Asset Liability Management Committee, Privacy Officer etc. Also the officers for those offices may need to be approved persons, or from an approved class of persons. 5. To have a constitution or articles of association that is approved, or contains or
does not contain particular clauses, e.g. clauses that enable directors to act other than in the best interests of the company (e.g. in the interests of a parent company) may not be allowed.
[edit]Financial
reporting and disclosure requirements
Banks may be required to:
1.
2.
Prepare annual financial statements according to a financial reporting standard,
have them audited, and to register or publish them Prepare more frequent financial disclosures, e.g. Quarterly Disclosure
Statements 3. Have directors of the bank attest to the accuracy of such financial disclosures Prepare and have registered prospectuses detailing the terms of securities it
4.
issues (e.g. deposits), and the relevant facts that will enable investors to better assess the level and type of financial risks in investing in those securities. [edit]Credit
rating requirement
Banks may be required to obtain and maintain a current credit rating from an approved credit rating agency, and to disclose it to investors and prospective investors. Also, banks may be required to maintain a minimum credit rating. [edit]Large
exposures restrictions
Banks may be restricted from having imprudently large exposures to individual counterparties or groups of connected counterparties. This may be expressed as a proportion of the bank's assets or equity, and different limits may apply depending on the security held and/or the credit rating of the counterparty.
Aims of regulation The specific aims of financial regulators are usually: To enforce applicable laws To prevent cases of market manipulation, such as insider trading To ensure competence of providers of financial services To protect clients, and investigate complaints To maintain confidence in the financial system To reduce violations under laws
List of banks in India
Nationalised banks
Nationalised banks are public sector banks. The following are the list of Public Sector Banks in India 1 Allahabad Bank 2 Andhra Bank 3 Bank of Baroda 4 Bank of India 5 Bank of Maharashtra 6 Canara Bank 7 Central Bank of India 8 Corporation Bank 9 Dena Bank 10 Indian Bank 11 Indian Overseas Bank 12 Oriental Bank of Commerce 13 Punjab & Sind Bank 14 Punjab National Bank 15 State Bank of India 16 Syndicate Bank 17 UCO Bank 18 Union Bank of India 19 United Bank of India 20 Vijaya Bank 21. Tamilnadu Mercantile Bank Limited List of State Bank of India's subsidiary, a Public Sector Banks o o o o State State State State Bank Bank Bank Bank of of of of Bikaner & Jaipur Hyderabad Mysore Travancore
State bank of saurashtra and State bank of Indore merged with SBI [edit]Private
banks
1 Axis Bank 2 Bank of Rajasthan
3 Catholic Syrian Bank ion Bank 5 Dhanalakshmi Bank 6 Federal Bank 7 HDFC Bank 8 ICICI Bank 9 IndusInd Bank 10 ING Vysya Bank 11 Jammu & Kashmir Bank 13 Karur Vysya Bank 14 Kotak Mahindra Bank 15 Lakshmi Vilas Bank 16 Nainital Bank 17 Ratnakar Bank 18 Saraswat Bank 19 South Indian Bank 21 Development Credit Bank [edit]Co-operative [edit]Scheduled
Banks
Urban Co-operative Banks
List of Scheduled Urban Co-operative Bank as on 31-3-2009 as per Reserve Bank of India:[1] Bank Main Location Notes
Rani Laxmibai urban Co-op Bank,
Jhansi
Ahmedabad Mercantile Co-Op Bank Ltd.
Ahmedabad
Kalupur Commercial Coop.Bank Ltd.
Kalupur
Madhavpura Mercantile Co-Op Bank Ltd.
Madhavpur
Mehsana Urban Co-Op Bank Ltd.
Mehsana
Website-http://www.mucbank.com/
Nutan Nagarik Sahakari Bank Ltd.
Ahmedabad
Rajkot Nagarik Sahakari Bank Ltd.
Rajkot
Website- http://nagarikbank.com/
Almora Urban Co-operative Bank ltd.
Almora
punjab national bank
punjab
Sardar Bhiladwala Pardi Peoples Co-op Bank Ltd.
Bulsar
Surat Peoples Coop Bank Ltd.
Surat
Amanath Co-operative Bank Ltd.
Bengaluru
Andhra Pradesh Mahesh Co-Op Urban Bank Ltd. Andhra Pradesh
Charminar Coop.Urban Bank Ltd.
Hyderabad
Sapthagiri Coop. Bank
Chittoor
Vasavi Coop Urban Bank LImited.
Hyderabad
Indian Mercantile Co-op Bank Ltd.
Lucknow
Kallappanna Awade Ichalkaranji Janata Sahakari Bank Ltd.
Ichalkaranji
Abhyudaya Co-operative Bank Ltd.
Mumbai
Website-http://abhyudayabank.co.in/
Bangalore City Cooperative bank.
Bengaluru
Bassein Catholic Co-operative Bank Limited.
Vasai
Bharat Co-operative Bank (Mumbai) Ltd.
Mumbai
Website-http://www.bharatbank.com/
Bharati Sahakari Bank Limited.
Pune
Bombay Mercantile Co-operative Bank Limited.
Mumbai
Website- http://bmcbankltd.com/
Citizen Credit Co-operative Bank Ltd.
Dadar
Dombivli Nagari Sahakari Bank Ltd.
Dombivli
Goa Urban Co-operative Bank Limited.
Goa
Greater Bombay Co-operative Bank Limited.
Mumbai
Website-http://www.greaterbank.com/
Jalgaon Janata Sahakari Bank Ltd.
Jalgaon
Janakalyan Sahakari Bank Ltd.
Mumbai
Website- http://www.jksbl.com/
Janalaxmi Co-operative Bank Ltd.
Mumbai
Website-http://www.janalaxmibank.com/
Janata Sahakari Bank Ltd.
Pune
Websitehttp://www.janatabankpune.com/
The Karnataka State Co-Operative Apex Bank Ltd
Bengaluru
Kalyan Janata Sahakari Bank Ltd.
Kalyan
Karad Urban Co-operative Bank Ltd.
Karad
Mahanagar Co-operative Bank Ltd.
Mumbai
Websitehttp://www.mahanagarbank.com/
Mapusa Urban Co-operative Bank of Goa Ltd.
Mapusa
Nagar Urban Co-operative Bank Ltd.
Ahmednagar
Nasik Merchant's Co-operative Bank Ltd.
Nasik
New India Co-operative Bank Ltd.
Mumbai
Website-http://www.newindiabank.in/
NKGSB Co-operative Bank Ltd.
Mumbai
Website- http://www.nkgsb-bank.com
Parsik Janata Sahakari Bank Ltd.
Thane
Pravara Sahakari Bank Ltd.
Ahmednagar
Punjab & Maharashtra Co-operative Bank Ltd.
Mumbai
Website-http://www.pmcbank.com/
Rupee Co-operative Bank Ltd.
Pune
Sangli Urban Co-operative Bank Ltd.
Sangli
Saraswat Co-operative Bank Ltd.
Mumbai
Website-http://www.saraswatbank.com/
Shamrao Vithal Co-operative Bank Ltd.
Mumbai
Website- http://www.svcbank.com/
Solapur Janata Sahakari Bank Ltd.
Solapur
Thane Bharat Sahakari Bank Ltd.
Thane
Thane Janata Sahakari Bank Ltd.
Thane
The Kapol Co-operative Bank Ltd.
Mumbai
Zoroastrian Co-operative Bank Ltd.
Mumbai
Nagpur Nagrik Sahakari Bank Ltd.
Nagpur
Shikshak Sahakari Bank Ltd.
Nagpur
The Akola Janata Com.Co-operative Bank Ltd.
Akola
The Akola Urban Co-operative Bank Ltd.
Akola
The Khamgaon Urban Co-operative Bank Ltd.
Khamgaon
Cuttack Gramya Bank.
Cuttack
Cuttack urban Co-operative Bank Ltd.
Cuttack
Bank |Tirichur | |}Abhyudaya Bank |}Up Agro Bank Corporation Lucknow [edit]Non-Scheduled
Urban Co-operative Banks
List of Non-Scheduled Urban Co-operative Bank as on 31-3-2010 as per Reserve Bank of India:[2] Bank Main Location Notes
Janaseva Sahakari Bank Ltd.,
Pune
Websitehttp://janasevabankpune.com/
Vishweshwar Sahakari Bank Ltd.,
Pune
Sadhna Sahakari Bank Ltd.,
Pune
Sanmitra Sahakari Bank Ltd.,
Pune
Deogiri Nagari Sahakari Bank Ltd.,
Aurangabad
Shri Chhatrapati Rajashi Shahu Urban Co op Bank Ltd.,
Beed
Ajantha Urban Co op Bank Ltd., [edit]Foreign
Aurangabad
banks
34 Foreign Banks are operating in India. 1 Abu Dhabi Commercial Bank Limited 2 American Express Banking Corporation 3 Antwerp Diamond Bank N.V. 4 Arab Bangladesh Bank Limited. 5 Bank Internasional Indonesia 6 Bank of America NA 7 Bank of Bahrain and Kuwait B.S.C. 8 Bank of Ceylon 9 Barclays Bank PLC 10 BNP Paribas 11 Chinatrust Commercial Bank 12 Citibank N.A.. 13 Credit Agricole Corporate & Investment Bank 14 Deutsche Bank AG 15 JPMorgan Chase Bank 16 JSC VTB Bank 17 Krung Thai Bank Public Company Limited 18 Mashreqbank psc 19 MIZUHO Corporate Bank Ltd. 20 Oman International Bank S.A.O.G. 21 Shinhan Bank 22 Societe Generale 23 Sonali Bank 24 Standard Chartered Bank 25 State Bank of Mauritius Ltd. 26 The Bank of Nova Scotia 27 The Bank of Tokyo-Mitsubishi UFJ Ltd. 28 The Development Bank of Singapore Ltd. 29 The Hongkong and Shanghai Banking Corporation Ltd. 30 The Royal Bank of Scotland NV 31 UBS AG 32 FirstRand Bank Ltd. 33 Commonwealth Bank of Australia 34 United Overseas Bank Ltd.
[edit]Indian
Banks with business outside India
List of subsidiaries of Indian Banks abroad as on November 30, 2007:[3] Name of the Bank Name of the Centre Notes
SBI (Canada) Ltd.
Toronto, Vancouver, Mississauga
SBI (California) Ltd.
Los Angeles, Artesia, San Jose(Silicon Valley)
SBI Finance Inc.
Delaware, U.S.A.
SBI International (Mauritius)
Mauritius (Off-shore Bank)
SBI (China) Ltd.
Shanghai
Bank of Baroda Uganda) Ltd.
Uganda
Bank of Baroda (Kenya) Ltd.
Kenya
Bank of Baroda Accra, Ghana Limited. Ghana
Bank of Baroda Ghana Limited.
Accra, Ghana
Bank of Baroda (U.K.) Nominee Ltd.
London, United Kingdom
BOB (Hong Kong) Ltd.
Hong Kong (Converted into Restricted Licensed Bank)
Bank of India Finance (Kenya) Ltd.
Kenya
IOB Properties Pte Ltd.
Singapore
Bank of Baroda (Botswana) Ltd.
Gaborone, Botswana
Bank of Baroda (Guyana) Inc.
Georgetown, Guyana (South America)
ICICI Bank UK Ltd
London (UK)
ICICI Bank Canada Ltd
Toronto (Canada)
Bank of Baroda (Tanzania)
Tanzania
Bank of Baroda (United Arab Emirate)
Dubai, Abu Dhabi, Ras Al Khaimah,Deira, Dammam, Salalah, Al Ain
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 [edit]Foreign
Trinidad & Tobago
banks with business in India
Banks with branches in India.[4] co operative bank ABN AMRO Bank N.V. - Royal Bank of Scotland Abu Dhabi Commercial Bank Ltd American Express Bank Antwerp Diamond Bank Arab Bangladesh Bank Bank International Indonesia Bank of America Bank of Bahrain & Kuwait Bank of Ceylon Bank of Nova Scotia Bank of Tokyo Mitsubishi UFJ Barclays Bank BNP Paribas Calyon Bank ChinaTrust Commercial Bank Citibank DBS Bank Deutsche Bank HSBC (Hongkong & Shanghai Banking Corporation) JPMorgan Chase Bank Krung Thai Bank Mashreq Bank Mizuho Corporate Bank Oman International Bank Shinhan Bank Socit Gnrale
Sonali Bank Standard Chartered Bank State Bank of Mauritius UBS VTB [1]
[edit]Foreign Banks with Representative Offices in India American Banks Bank of New York Wachovia Bank
Australian Banks Commonwealth Bank National Bank Australia Westpac Banking Corporation
Austrian Banks Raiffeisen Bank International A.G.
Belgian Banks Fortis Bank. K.B.C. Bank N.V.
Canadian Banks Royal bank of Canada
UAE Banks Emirates Bank International
French Banks Credit Industriel et Commercial Natixis
German Banks Bayerische Hypo und Vereinsbank Commerzbank Dresdner Bank DZ Bank AG Deutsche Zentral Genossenschafts Bank HSH Nordbank Landesbank Baden Wurttemberg
Irish Banks DEPFA Bank
Italian Banks Banc Intesa Banca Commerciale Italiana Banca di Roma Banca Populare Di Verona E Novara Banca Popolare di Vicenza UBI Banca Unione di Banche Italiane Monte Dei Paschi Di Sienna Sanpaolo IMI Bank Uni Credito Italiano
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 Banco de Sabadell Banco Bilbao Vizcaya Argentaria
Sri Lankan Banks Hatton National Bank
Swiss Banks Credit Suisse Zurcher Kantonal Bank
