Banking Structure in IndiaWord文档格式.docx
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Banking Structure in IndiaWord文档格式.docx
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MarketShareofFinancialAssets(Percentage)
Banks
63
InsuranceCompanies
19
Non-bankingFinancialInstitutions
8
MutualFunds
6
ProvidentandPensionFunds
4
Total
100
∙BanksdominatetheIndianfinancialsystem.
Table-II
IndianBankingSystem-SharebyAssetSize
Institution
MarketShareofTotalBankingAssets(2012)
(Percentage)
ScheduledCommercialBanksofwhich:
92.4
PublicSectorBanks
67.2
PrivateSectorBanks
18.7
ForeignBanks
6.5
RegionalRuralBanks
2.7
RuralandUrbanCo-operativeBanks
3.4
LocalAreaBanks
1.5
100.0
∙Thebankingsystemisdominatedbycommercialbanks.
Table-III
ShareintheBankingSpace
TypeofBanks
NumberofBanks
NumberofBranches
PercentageShareofNumberofBranches
MarketShareofAssets(Percentage)
PublicSector
26
67,466
83.0
72.8
PrivateSector
20
13,452
16.6
20.2
ForeignBanks
41
323
0.4
7.0
87
81,241
∙Publicsectorbankshavemorebranchpresencerelativetotheirshareofassets.
Whatdotheabovedatatellusaboutthebigpicture?
∙Withinthebankingsystem,publicsectorbanks(PSB)continuetodominatewith73percentofmarketshareofassetsand83percentofbranches.
∙Ruralandurbanco-operativesbankshavearelativelysmallshareinthebankingsystem.However,giventheirgeographicanddemographicoutreach,theyplayakeyroleinprovidingaccesstofinancialservicestolowandmiddleincomehouseholdsinbothruralandurbanareas.
∙Similarly,RegionalRuralBanks(RRBs)playakeyroleinpromotingfinancialinclusion.TheGovernmentispursuingbranchexpansionandcapitalinfusionplansfortheRRBs.
Table-IV
ExpansionofBankingSinceNationalisation
Year
1969
1991
2007
2012
No.ofCommercialBanks(incl.RRBsandLABs)
73
272
182
173
No.ofBankOffices
8,262
60,570
74,563
1,01,261
ofwhich
Ruralandsemi-urbanbankoffices
5,172
46,550
47,179
62,061
Populationperoffice
64,000
14,000
15,000
13,000
PercapitaDepositofScheduledCommercialBanks(SCBs)
`88
`2,368
`23,382
`51,106
PercapitaCreditofSCBs
`68
`1,434
`1,7541
`39,909
∙Sincenationalisationof14majorcommercialbanksin1969,followedbynationalisationofanother6banksin1980,Indianbankingsystemhasexpandedrapidly.
∙Thenumberofbankofficesincreasedfromabout8,000in1969toover100,000by2012.
∙Theaveragepopulationperbranchofficehassharplydeclinedfrom64,000in1969to13,000today.
∙Bothpercapitadepositandpercapitacredithaveexpandedabout600times.Evenaccountingforinflation,thisissignificantexpansion.
MajorBankingSectorReformssince1991
Theeconomicreformsinitiatedin1991alsoembracedthebankingsystem.Followingarethemajorreformsaimedatimprovingefficiency,productivityandprofitabilityofbanks.
∙Newbankslicencedinprivatesectortoinjectcompetitioninthesystem.10in1993and2morein2003.Anotherlotofnewbankswillbelicencedinthenextfewmonths.
∙FDI+FIIupto74percentallowedinprivatesectorbanks
∙ListingofPSBsonstockexchangesandallowingthemtoaccesscapitalmarketsforaugmentingtheirequity,subjecttomaintainingGovernmentshareholdingataminimumof51percent.PrivateshareholdersrepresentedontheBoardofPSBs.
∙Progressivereductioninstatutorypre-emption(SLRandCRR)toimprovetheresourcebaseofbankssoastoexpandcreditavailabletoprivatesector.SLRcurrentlyat23percent(38.5percentin1991)andCRRat4percent(15percentin1991).
∙Adoptionofinternationalbestpracticesinbankingregulation.Introductionofprudentialnormsoncapitaladequacy,IRAC(incomerecognition,assetclassification,provisioning),exposurenormsetc.
∙Phasedliberalisationofbranchlicensing.BankscannowopenbranchesinTier2toTier6centreswithoutpriorapprovalfromtheReserveBank.
∙Deregulationofacomplexstructureofdepositandlendinginterestratestostrengthencompetitiveimpluses,improveallocativeefficiencyandstrengthenthetransmissionofmonetarypolicy.
∙Baserate(floorrateforlending)introduced(July2010).Prescriptionofaninterestrateflooronsavingsdepositratewithdrawn(October2011).
∙FunctionalautonomytoPSBs.
∙Useofinformationtechnologytoimprovetheefficiencyandproductivity,enhancethepaymentandsettlementsystemsanddeepenfinancialinclusion
∙StrengtheningofKnowYourCustomer(KYC)andAnti-moneyLaundering(AML)norms;
makingbankinglesspronetofinancialabuse.
∙Improvementsintheriskmanagementcultureofbanks.
Post-crisisRegulatoryReformsAroundtheWorld
∙ThefinancialcrisisexposedtheriskposedbytheGlobalSystemicallyImportantFinancialInstitutions(G-SIFIs)asthesewere‘toobigtofail’.
∙Post-crisis,US,UK,EuropeanUniontookinitiatives(PaulAVolckerinUS,SirJohnVickersIndependentCommissiononBankinginUK,ErkkiLiikanenintheEuropeanUnion)torecommendasstructuralreformsinthebankingsectortobuildsafeguardsagainstinstability.
∙TheVolckerRuleandtheDodd-FrankActWallStreetReformandConsumerProtectionActhavebroughtsignificantchangestotheUSfinancialsystem.
∙TheVolckerRuleseparatesinvestmentbanking,privateequityandproprietarytrading(hedgefund)sectionsoffinancialinstitutionsfromtheirconsumerlendingarms.Banksarenotallowedtosimultaneouslyenterintoanadvisoryandcreditorrolewithclients,suchaswithprivateequityfirms.TheVolckerRuleaimstominimiseconflictsofinterestbetweenbanksandtheirclientsthroughseparatingthedifferenttypesofbusinesspracticesfinancialinstitutionsengagein.
∙TheIndependentCommissiononBanking(VickersReport)inUKhasinteraliarecommendedringfencingofUKbanks,suchthattheringfencedbankswouldbepermittedtoextendonlyretailandcommercialbankingservicestolimitedclientsincludingindividualsandsmallandmedium-sizedorganisations(SMEs)inUK.
∙TheLiikanenReportfortheEUconcludedthatriskyfinancialactivitiesneedtobeseparatedfromdeposit-takingbankswithinthebankinggroup,withtheobjectiveofmakingbankinggroups(mainlydeposit-takingandprovidingfinancialservicestothenon-financialsectorsintheeconomy)saferandlessconnectedtotradingactivities.
IssueNo.1:
PublicvsPrivateOwnershipofBanks
∙Abstractingfromideology,fromapragmaticperspective,bothpublicandprivatebankshaverespectiveadvantagesanddisadvantages.Privateownershipbringscompetition,professionalismandoperationalefficiency.Publicownershipmakesiteasiertopursuesocialobjectivessuchasmassbanking,financialinclusionetc.
∙Privatebankshavecomparativelygreaterfreedomintermsofrecruitment,salaryandcompensation.Ontheotherhand,PSBsareperceivedtooffermorejobsecurity,andconsequently,employeeturnoverislower.
∙PSBsdominatethebankingsectorinIndiaandwillcontinuetobedominantintheforeseeablefuture.However,thesebanksrequiresubstantialcapitaltosupportgrowth.
∙ThecriticalquestioniswhethertheGovernment,givenitslimitedfiscalspace,canmeettheenhancedcapitalneedsofpublicsectorbanksundertheBaselIIIcapitalregulations.
∙ReserveBankhasmadeanestimateoftheadditionalcapitalrequirementsofdomesticbanksforfullBaselIIIimplementationtillMarch2018.Theseestimatesarebasedontwobroadassumptions:
(i)increaseintheriskweightedassetsof20percentp.a.;
(ii)internalaccrualoftheorderof1percentofriskweightedassets.
∙TheestimatessuggestthattheIndianba
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