BUSINESS ENVIRONMENT

BANKING AND CAPITAL MARKET IN

INDIA

F.Y.BMS
PRASHANT GUPTA-19

SUMIT SHUKLA-55
 Banking in India
Introduction:
Banking dates back to 1786, the first bank
established in India, then the nationalization of
banks in 1969 and recently the liberalization of
the same since 1991
Banks in India
Banking services in India
Financial and banking sector reforms
Reserve bank of India
Easy banking
Banking services for NRIs
Indian bank association (IBA)
Proxy banks in India
 Development of banks in India:
Banks in India can be classified as commercial banks
and Co-operative banks. In terms ownership and
function, commercial bank can be classified into 3
groups:
Public sector banks
regional rural banks and
private banks (both domestic and foreign)
These banks have a very large number of branches
spread
across the country. After the financial sector reforms,
completion has increase in banking sector.
 The Functions of Banking

The most important functions of banking may be

classified as follows:
 to assemble capital and make it effective
 to receive deposits and make collections
 to check out and transfer funds
 to discount or lend
 to exercise fiduciary or trust powers
 to issue circulating notes. Every bank which expects to
succeed must first of all prove its value to the
community.
 Types of banks
Bank activity can be divided into following types:
retail banking, dealing directly with individuals
and small businesses
business banking, providing services to mid-
market business
corporate banking, directed at large business
entities private banking, providing wealth
management services to high net worth
individuals and families.
investment banking, relating to activities on the
financial markets.
 What is capital market?
Basically the capital market is a type of
financial market, it includes the stocks and bonds
market as well. But in general the capital market is the
market for securities where either companies or the
government can raise long term funds. One way that
the companies or the government raise these long
term funds is through issuing bonds, which is where a
person buys the bond for a set price and allows the
government or company to borrow their money for a
certain time period but they are promised a higher
return for allowing them to borrow the money, the
higher return is paid through interest that accrues on
the money that the government or company borrows.
 Capital Market
 Legislations
 Capital Issues (Control) Act,1947
 SEBI Act, 1992
 Securities Contract (Regulation) Act,1956
 Depositories Act, 1996
 Companies Act, 1956
 Regulators
 DEA, DCA, RBI and SEBI
 Instruments
 Traditional
 Modern-Derivatives, Exchange Traded Funds, Euro
Issues etc.
 Services
 Underwriting, Merchant Banking, Custodial Services
 Intermediaries
 Underwriter, Broker, Banker, Registrar, Advisors etc.
National Stock Exchange (NSE)
NSE was recognized as a stock exchange
in April 1993 under the Securities
Contracts (Regulation) Act. It commenced
its operations in Wholesale Debt Market in
June 1994. The capital market segment
commenced its operations in November
1994, whereas the derivative segment
started in 2000.
Structure of capital market in India:
 Conclusion
The name bank derives from the Italian word banco
"desk/bench", used during the Renaissance by Jewish
Florentine bankers, who used to make their transactions
above a desk covered by a green tablecloth However,
there are traces of banking activity even in ancient times.
The capital market actually consists of two
markets. The first market is the primary market and it is
where new issues are distributed to investors, and the
secondary market where existing securities are traded.
Both of these markets are regulated so that fraud does
not occur and in the United States the U.S. Securities
and Exchange Commission is in charge of regulating the
capital market.
26th Feb. 2010