Evaluating the Current State of Indian Banking - Free Essay Example

Sample details Pages: 6 Words: 1808 Downloads: 10 Date added: 2017/06/26 Category Finance Essay Type Analytical essay Did you like this example? The commercial banking structure in India consists of the following entities: Scheduled Commercial Banks and Unscheduled Banks Don’t waste time! Our writers will create an original "Evaluating the Current State of Indian Banking" essay for you Create order Scheduled commercial Banks constitute those banks, which have been included in the Second Schedule of Reserve Bank of India (RBI) Act, 1934. RBI includes only those banks in this schedule, which satisfy the criteria laid down vide section 42 (6) (a) of the Act. Further, Indian banks can be broadly classified into public sector banks, private banks and foreign banks. Public sector banks are those banks in which the Government of India holds a stake whereas in private banks government does not have a stake in these banks; they may be publicly listed and traded on stock exchanges. Foreign banks have brought latest technology and latest banking practices in India. They have helped made Indian Banking system more competitive and efficient. Government has come up with a road map for expansion of foreign banks in India. Currently nationalised banks dominate the Indian banking system. In India the history of nationalised banks dates back to mid-20th century, when Imperial Bank of India was nationalised under the SBI Act of 1955 and re-christened as State Bank of India (SBI) in July 1955. Initially, all the banks in India were private banks, which were founded in the pre-independence era to cater to the banking needs of the people. In 1921, three major banks i.e. Banks of Bengal, Bank of Bombay, and Bank of Madras, merged to form Imperial Bank of India. Reserve Bank of India has the role of central banking in India and is responsible for controlling the monetary policies of the nation, in 1935 it formally took over these responsibilities from the then Imperial Bank of India. In 1947, Reserve Bank was nationalized and was given broader powers. In 1969, 14 largest commercial banks were nationalized followed by six next largest in 1980. But with adoption of economic liberalization in 1991, private banking was again allowed. The chart below gives a view on the current state of banking sector in India. From the charts given above, we get a fairly right idea about the mix of types of banks present in Indian banking sector. On a detailed analysis of the Indian banking sector, we came across to the following salient points: Global scale: The lack of global scale for Indian banks came into sharp focus during the recent international financial crisis which saw several reputed international banks reneging on their funding commitments to Indian companies; however the local banks could not step into the breach because of balance sheet limitations. Small and weak banks pose systemic risk with their low capital adequacy ratio and high NPAs. Consolidation could be a timely response to augment efficiency, which in turn would lead to income generation and add to the GDP of the nation. The smaller banks are apprehensive about losing their identities while bigger banks fear that the assets might become a liability for them in the long term. The idea of creating bigger banks to take on competition sounds attractive but one must realise even the biggest among Indian banks are small by global standards. Increase in scope: Over the last three decades, there has been a remarkable increase in the size, spread and scope of activities of banks in India. The business profile of banks has transformed dramatically to include non-traditional activities like merchant banking, mutual funds, new financial services and products. Within retail operations, banks rate product development and differentiation; innovation and customization; cost reduction; cross selling and technological up-gradation as equally important to the growth of their retail operations. Additionally we can also find pro-active financial inclusion, credit discipline and income growth of individuals and customer orientation to be significant factors for their retail growth. Technology (Core banking solutions): Technology has enabled banks to consolidate their various legacy platforms across functions and geographies which helped them in leveraging cost and at the same time acquiring flexibility and scalability to adapt to a fast changing and competitive environment. Also, the shift to IFRS standards by 2011 with valuation of assets on the basis of current rather than historical cost would be one of the major driving forces for the implementation of new technology. The future would require banks to have increased business agility and operational efficiency, which makes the implementation of Core Banking Systems (CBS) by banks increasingly important. Competition: There have been limited signs of increased competition within the banking sector. Public sector banks have attempted to improve the quality of services through technology up-gradation, but such attempts still remain small by relative standards. Significant differences in profitability and efficiency continue to persist between public sector banks and the new private sector and foreign banks. Non-performing assets: While most public sector and old private sector banks have attained the BIS capital adequacy norm of 8 percent, this achievement is somewhat neutralized by the existence of high volumes of NPAs, the periodic injections of capital by the government, and the absence of sound banking practices Also, we note that In spite of new entry and expansion of private sector banks, the oligopolistic dominance of public sector banks continues. Financial Inclusion: Financial inclusion is delivery of banking services at an affordable cost to the vast sections of disadvantaged and low income groups, which can happen through: state-driven intervention by way of statutory enactments, for instance we can take the example of USA, the Community Reinvestment Act and making it a statutory right to have bank account in France. voluntary effort by the banking community itself for evolving various strategies to bring within the ambit of the banking sector the large strata of society. For the past one year definitely and in fact for the past several years one of the important new objectives of the Reserve Bank of India has been financial inclusion. The movement towards financial inclusion rose to a crescendo in the current year because the demand for financial inclusion has become a national and a governmental imperative. The Reserve Bank of India had set up a commission, Khan Commission in 2004 to look into financial inclusion and the recommendations of the commission were incorporated into the mid-term review of the policy (2005ÃÆ' ¢Ãƒ ¢Ã¢â€š ¬Ã… ¡Ãƒâ€šÃ‚ ¬06). In the report, RBI urged the banks with a view of achieving greater financial inclusion to make available a basic no-frills banking account to common man. Financial Inclusion first featured in 2005, when it was introduced from a pilot project in UT of Pondicherry, by K C Chakraborthy, the then chairman of Indian Bank. Mangalam Village became the first village in India where all households were served with banking facilities. In addition to this, KYC (Know your Customer) norms were relaxed for potential customers who intended to open accounts with annual deposits of less than Rs. 50,000. Also, General Credit Cards (GCC) were issued to the poor and the disadvantaged with a view to help them access easy credit as per their requirement. However, illiteracy and the low income savings and lack of bank branches in rural areas continue to be a road block to financial inclusion in many states. Apart from this there is inadequate legal and financial structure in the nation as of now to support a complete financial inclusion and these needs to be taken care of as soon as possible. In India the focus of the financial inclusion at present is confined to ensuring a bare minimum access to a savings bank account without frills and providing such facilities and services there are some challenges faced by the banks. The main challenges are: Products designed by the banks are not satisfying the low income families. The provision of uncomplicated, small, affordable products will help to bring the low income families into the formal financial sector Banks have limitations to reach directly to the low income consumers. Correspondents can be considered to be an excellent channel which banks can use to distribute their product information. Educating the consumers about the financial benefits and products of banks which are beneficial to low income groups will be a great step to tap their potential. In order to mitigate the above mentioned challenges banks are now using new technologies like mobile phones to reach low income consumers and the recent simplification of KYC norms are another milestone. Financial service providers should learn more about the consumers and new business models to reach them and provide them with the bare minimum financial products and services. Consequences of financial exclusion will vary depending on the nature and extent of services denied. It may lead to increased travel requirements, higher incidence of crime, general decline in investment, difficulties in gaining access to credit or getting credit from informal sources at exorbitant rates, and increased unemployment, etc. The small business may suffer due to loss of access to middle class and higher-income consumers, higher cash handling costs, delays in remittances of money. Priority Sector Lending Norms Branch Licensing The RBI guidelines to banks highlights that 40% of domestic and 32% of foreign NBCÃÆ' ¢Ãƒ ¢Ã¢â€š ¬Ã… ¡Ãƒâ€šÃ‚ ¬ÃƒÆ' ¢Ãƒ ¢Ã¢â€š ¬Ã… ¾Ãƒâ€šÃ‚ ¢s advance should be to the priority sector. This mainly consists of agriculture, small scale industries, retail trade etc. In order to increase banking penetration and promote financial inclusion, the Reserve Bank relaxed branch opening norms for lenders allowing banks to appoint kirana, medical shop owners, agents of small savings schemes, petrol pump owners, retired teachers among others as correspondents. Transition from class banking to mass banking and increased customer focus is drastically changing the landscape of Indian banking. The scope and breadth of this emerging market can be estimated if we consider the following facts. India has a middle class of 250 to 300 million people in need of varied banking services. Only 60% of our population has access to banks and out of these only 15% of them having loan accounts An overwhelming 70% of farmers have no access to formal sources of credit, reflective of immense potential for the banking system Steps towards financial inclusion: In order to address financial exclusion banks will require a holistic approach in creating awareness about financial products, education, and advice on money management, debt counseling, savings and affordable credit. The banks would have to evolve specific strategies to expand the outreach of their services in order to promote financial inclusion. One of the ways in which this can be achieved in a cost-effective manner is through forging linkages with microfinance institutions (MFIs), which are very well established and have considerable penetration in the rural community, and local communities. Banks should give wide publicity to the facility of no frills account. Nonetheless, use of technology like smart cards, mobile banking can be a very valuable tool in providing access to banking products in remote areas. ATMs cash dispensing machines can be modified suitably to make them user friendly for people who are illiterate. Banks have to make use of all available resources including technology and expertise available with them as well as the network of MFIs and NGOs.

Social Inequality in to Kill a Mockingbird - 987 Words

Social Inequality In the book ‘To Kill a Mockingbird’ by Harper Lee, racism and social inequality are two central themes. Many different forms of social inequality coexist in the society depicted in the book, as the people of Maycomb are very rigid in their ways. This is because the book takes place in a time at which there was much racism and social inequality. In Maycomb, firstly there is discrimination between rich and poor white people, who do not often interact with each other. There is also racism against blacks by all white people in society, both rich and poor. Black people are denied basic rights and discriminated against in this town. Lastly, there is racism between the lowest classes of the community: poor white people and†¦show more content†¦The last type of social inequality is the disparity between men and women. During that time, women were not considered equal to men and as such, there was a particular way in which women were expected to act and certain practices they had to follow. For example, women had to act in a very proper and ladylike way. This is evident through the treatment of Scout by Aunt Alexandra. Aunt Alexandra is very familiar with the expectations of women and how women are supposed to act. She attempts to shape Scout into the kind of lady that society will approve of. Aunt Alexandra believes that Scout is too boyish. Also, Mayella Ewell’s sexual relations with Tom Robinson are unacceptable on two levels: interracial relations were evidently forbidden, as previously mentioned. However, this relationship was also unacceptable because for a woman to make advances towards a man was not socially acceptable at that time. Furthermore, if a man were to make advances towards a woman, it was her duty to stop him. As is evident, women had a predefined role that they had to fit into that society had created for them. It is very evident that Maycomb is a small town in which there is much racism, and social status greatly determines what kind of life you will lead. The different types of social inequality are an important theme in the novel, and Harper LeeShow MoreRelatedAnalysis Of Kill A Mockingbird By Harper Lee785 Words   |  4 PagesSocial Inequality is an issue that the American society has been struggling to solve for generations. Though we would like to say that this problem has been solved throughout time, it sadly has not gotten much better. In the classic novel To Kill A Mockingbird, author Harper Lee takes us back in time to when this issue was more commonly known, the 1930’s. 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In Lee’s novel, one character, Mrs. Maudie who is a friend to Jem and Scout e xplains the meaning of a mockingbird as the following: â€Å"they don’t do one thingRead MoreDivisions And Inequality In To Kill A Mockingbird1481 Words   |  6 PagesIn the novel, To Kill a Mockingbird, one of the major themes that author Harper Lee highlights are the divisions and inequality in society. The story is set in the 1930’s in Maycomb, Alabama when class, gender, and racial discrimination were highly prevalent. In this time Jim Crow laws were in effect. Jim Crow laws mandated the segregation between black and whites. Consequences of questioning Jim Crow laws were violent and people were rejected from society and their family. The 1930’s is also theRead MoreRacial Segregation And The United Arab Emirates1422 Words   |  6 Pagesthe UAE has created a dynamic entrepreneurial environment for international investors. The finan To Kill a Mockingbird, produced in 1962, is an exquisite film adored by many. 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Poe’s Exploration of the Darker Side of Human Nature in the Black Cat free essay sample

Poe’s exploration of the darker side of human nature in The Black Cat, Hop-Forg and Fall of the House of Usher Introduction The main themes of Edgar Allan Poe’s works are death, perversity, revenge and destruction. The settings he employed in the given short stories, especially in The Fall of the House of Usher and The Black Cat are Gothic. Therefore, naturally the mood of these stories would be dark and sepulchral. However, this is not a trivial employment undertaken to put the reader in a certain kind of zone. The reason for a Gothic setting is to ably portray the dark and sepulchral undertones of the psyche of the stories’ characters, and through them, the nature of humans in general. Hop-Frog Compared to the other two short stories given for analysis Hop-Frog has very limited, if any, Gothic elements. However the climax of the story in itself is greatly shocking. Hop-Frog is shown to have tricked the King and his councillors into dressing as ourang-outans on the occasion of a masquerade in the palace. With a pre-planned connivance with Trippetta, he gathers them, thus dressed and chained together, at the centre of the ballroom and suspends them from the ceiling. During this part of the story, the maniacal side of the jester comes forth. The grating of his teeth and foam forming at his mouth create a picture of a mentally unstable person. His whole demeanour changes from that of a congenial, meek servant of the King to a raging, evil villain. Hop-Frog calculatedly planned the entire action, right from the material used to create the costumes which would be easily inflamed to the easy escape he and Trippetta would make after concluding their vendetta successfully. The King and his privy-council had to pay bitterly for their unjust and cruel treatment of Hop-Frog and Trippetta through painful deaths. The manner of the killing, which was made into a ghastly spectacle, reveals the depths of darkness to which the human soul can descend in order to avenge the wrongs inflicted on it. This action of Hop-Frog with participation from Trippetta, however grotesque or inhuman it may seem, is not without reason. They were kidnapped from their land and brought to the King’s palace where they had to lead a life of servility and humiliation and also suffered loss of identity and esteem. They were treated inhumanly and the daily abuse caused resentment and a feeling of revenge in them. However, the dark side of human nature, which presents itself so blatantly through Hop-Frog’s actions, surfaces subtly in the actions of other characters. The King and his council do not hesitate in using Hop-Frog and Trippetta – deserving of more consideration and respect in their own rights – as playthings. The two prisoners (that is what they are in the palace, being held there against their will) have no control over their lives or even their own bodies. The behaviour of the King shows that side of humans that has no consideration for the feelings of others and does not treat others as fellow humans but as mere objects. He oppresses and tyrannises the two dwarfs so much that driven by desperation, they plan and execute his horrific murder in order to escape his torment. The King, blinded by his power and position, humiliates Hop-Frog and Trippetta for his own mirth and his privy-council, who should counsel him in doing otherwise, egg him on and partake in this sordid mockery of the two. In abetting the King, they become his accomplices. They represent lack of compassion and sympathy. The Black Cat The Black Cat perhaps examines the dark side of humans most effectively as it involves sadistic actions and even murder. The narrator, who is the perpetrator of most heinous crimes, while enumerating those crimes of his, comes across as cool and rational. Nevertheless, he is an unreliable narrator. He admits that he is greatly fond of animals, yet hurts his cat Pluto. Poe delves into the narrator’s decline from sanity to madness which takes a shocking turn of events. One of the arguments, which I feel can be established through this story about human perversity, is that it can be inherent in many of us. People have a tendency of ascribing external stimuli as reasons for actions and behaviour of man. If a person becomes a criminal, we look for reasons in his background and social setting. However, it is not always necessary that a poor person will take to crime to alleviate his misery. It is the innate darkness and leaning towards the evil that disposes us to committing acts of brutality and insensitivity. In The Black Cat, the narrator admits that it was an â€Å"unfathomable longing of the soul to vex itself – to offer violence to its own nature – to do wrong for the wrong’s sake only†¦Ã¢â‚¬  that made him carry out the merciless killing of his most favourite pet. Some readers might blame his alcoholism for this act but it is quite evident in the narration that when he was committing this brutal act, he was very much in his senses. So much so, that as he was hanging the cat (Pluto) to the limb of the tree with a noose around its neck, â€Å"tears were streaming† from his eyes â€Å"with the bitterest remorse† at his heart. He knew he was committing a sin. A sin so terrible that even the highest mercy of God would not exonerate his blighted soul. Yet, this realisation did not keep him from following the call of his perverse side. Before the episode of killing Pluto, the narrator, after returning home drunk and sensing that the cat was avoiding his company, seized it violently. During this physical bout the cat bit his hand out of fright and perhaps a sense of self-preservation. The narrator was so enraged with this that he gouged out one of Pluto’s eyes out of its sockets. While narrating this incident, he is much ashamed and horrified. He is regretful even the next morning of the deed. But in his own words, â€Å"†¦ it was, at best, a feeble and unequivocal feeling, and the soul remained untouched. We as readers know that his remorse and feelings of guilt were short-lived because soon afterwards we see him indulging in the vices of drinking again, followed by the killing of Pluto. On the night of Pluto’s killing, his house catches fire and the next day he comes back to find among the ruin, the imprint of the Black Cat with a rope around its neck on the single wall of his house that survived the fire. At first he is terrorised by this image. But later, he tries to brush aside the appearance of the cat’s image and tries to rationalise it. However, his conscience is troubled by the apparition. Yet he does not want to acknowledge the â€Å"half-sentiment† as remorse because that would mean admitting to himself that the killing of Pluto had affected him deeply. His ambivalent feelings and reactions to his sin tell us about the troubled state of his mind. Under such circumstances, he finds another cat that closely resembles Pluto and brings it home. His inner turbulence does not let him stay in peace and he views this cat as a reincarnation of Pluto, come to exact revenge from him. In a fit of rage, he tries to kill this cat but ends up killing his wife whose body he conceals in a vault in the cellar of his new home. After the murder of his wife, the black cat is seen no more and the narrator â€Å"slept soundly† at night, although he had the burden of his wife’s murder on his heart. Here, the narrator presents a conflicting picture. Any conscientious person would be tormented by guilt after committing such an act. But the narrator only shows some vestige of regret and is able to sleep off the crime. The fact of the cat’s disappearance is more relieving for him than the burden of his guilt. The Fall of the House of Usher The story begins with the narrator describing a very sad and gloomy landscape and as he comes to the House of Usher, the ambience is dark and morbid. In the former two stories, we see how the dark side of human nature can have negative or even fatal consequences for others. In The Fall of the House of Usher however, the darkness within Roderick Usher proves damningly baleful for him. In this short story, Roderick Usher’s perversity and disordered mind led to his ultimate destruction. In this story, Poe is trying to bring out the dark side of human nature by placing the narrator’s character in a dark gloomy place which is engulfing him in an aura of terror and darkness. He showed how the mind can be consumed by fear. The darkest of human deeds, that of extinguishing the life of another (in this case, Roderick Usher’s sister, Madeline’s life), is portrayed in this story. A sense of claustrophobia is constructed in the story through the portrayal of the narrator being trapped in the House and not being able to leave it until it finally cracks from the middle and falls down. This could be an allegory of the entrapment of Roderick Usher himself in the darkness within him, which he is able to escape only with his own death. How Roderick Usher is able to entomb his twin sister alive in the house he is staying in would be horrifying for most readers. However the real darkness comes from the struggle of Usher to stay sane and how his fear and guilt work upon him and consume him so that towards the end of the story, he is reduced to a shadow of his former self, barely managing to stay sane and audible. Conclusion Through these three short stories, Poe presents a working of the dark side f human nature and how it affects humans and also the people and events around them. I think the reason why Poe is so successful in dealing with this darkness is that he plays on the reader’s fear of the darkness that is inherent in every one of us. We all have good and evil within us and are often tempted to give in to evil and darkness. Poe, while describing this darkness, also presents a picture of downfall and failure which meets the people who go down this path. Poe was able to tap in to the forces that we all feel within us, but through characters who take this inner darkness to their chilling conclusions.