Summary: Banks are the chief participants in Indian financial system. The banking service provides numerous facilities for the common man. Indian banking system stands on a very sound footing, tracing its roots to the last decades of the 19th century during the British period.
In India the commercial banking includes the scheduled commercial banks and the unscheduled banks. As per the conditions of Banking Regulation Act of India, the banking is “accepting, for the purpose of lending or investment of deposits of money from the public, repayable on demand or otherwise and withdrawable by cheques, draft, order or otherwise."
Moving on the path of modernity, the Indian banking system has now computerised its operations to meet the ever burgeoning requirements of the masses. In fact it was during the mid-eighties that 'software packages' for banking related applications were started. These steps were taken on the recommendations of a committee formed by the RBI to study the future of Indian banking industry.
The Indian banking sector got a push to move ahead on the path of technology-enabled services by the entry of private and foreign banks in the market. So most of the banks are now using the latest technology in order to stay afloat in the market. Outsourcing of IT services has enabled the banks to avail the status of 'Facilities Management'. Many banking institutions are now taking the help of Business Process Management in order to gain their profits on the front of investment. Services like Customer Relationship Management are being proactively used to increase the quotient of employee productivity.
In India, in addition to their conventional work areas, the banks are allowed to engage in certain ancillary activities. The banks' relationship with the masses is mainly regarding receiving deposits and lending funds. Transfer of money in the domestic and foreign domains is the new area of growth. In the banking spheres it is called 'remittance business'. In fact the foreign exchange business is a part and parcel of this remittance system.
Negotiable Instruments act 1881 is the law which governs the banking process in India. Deriving from the contents of this act, the banking activities may be summarised as:
1. Receiving deposit from the common public
2. Lending out funds to the public
3. Transferring funds from place to place in the form of remittances
4. Perform the tasks of trustees and intermediaries
5. Safe-keepers of valuables
6. Collection activities
7. Helpers in the government business
Author Bio: For more tips on finance community for you and your family. Addi Vardhaman works as a business writer for Paisawaisa. To find fixed deposit in India, Internet banking India, saving account in banks.
