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India has an extensive banking network, in both urban and
rural areas. All large Indian banks are nationalized, and
all Indian financial institutions are in the public sector.
The Reserve Bank of India (RBI) is India's central bank.
The Indian Banking sector though dominated by public sector
banks is also home to numerous private and foreign banks.
India's government-owned banks dominate the market. Their
performance has been fixed, with a few being consistently
profitable.
Foreign banks operate more than 150 branches in India.
The entry of foreign banks is based on economic and political
bilateral relations and reciprocity. An inter-departmental
committee approves applications for entry and expansion.
Currently 25 foreign banks operate in India with full banking
licenses. Several licenses for private banks have been approved.
Despite fairly broad banking coverage nationwide, the financial
system remains inaccessible to the poorest people in India.
Foreign banks in India are subject to the same regulations
as scheduled banks. They are permitted to accept deposits
and provide credit in accordance with the banking laws and
RBI regulations. Currently about 25 foreign banks are licensed
to operate in India. Foreign bank branches in India finance
trade through their global network.
Most Indian banks lag behind foreign banks in the areas
of customer funds transfer and clearing systems. They are
hugely over-staffed and are unable to compete with the new
private banks that are now entering the market. While these
new banks and foreign banks still face restrictions in their
activities, they have unlimited capital flows, access to
modern equipment and attract qualified, high caliber employees.
All commercial banks face stiff restrictions on the use
of both their assets and liabilities. Forty percent of loans
must be directed to priority sectors" and the high
liquidity ratio and cash reserve requirements severely limit
the availability of deposits for lending.
The RBI requires that domestic Indian banks make 40 percent
of their loans at concessional rates to priority sectors'
selected by the government. These sectors consist largely
of agriculture, exporters, and small businesses. Since July
1993, foreign banks have been required to make 32 percent
of their loans to these priority sector. In the new millennium
the RBI has tried to introduce regulations that govern all
banking sectors in India.
Press
Financial Express (India)
TRYING TO
SET A CLASS APART
November 21, 2004
Financial Times (London, England)
Banks size
up micro-loans: Millions of rural Indians have no access
to financial services
KHOZEM MERCHANT
November 4, 2004
Financial Express (India)
Trying to Set a Class Apart: India's Unbanked Population
November 21, 2004
Business Line (India)
New Deal for Rural India
March 12, 2005
The Hindu (India)
Foreign Banks Active Interest Across India
March 14, 2005
UPI (India)
Shades of Black in India's Economy
March 15, 2005
Business Line (India)
ICICI Bank Licro Credit
March 17, 2005
Electronic Payments International (India)
Country Survey India: E-payments get set for Indian Summer
March23, 2005
Financial Express (India)
Banking Operations in India Paralyzed
March 22, 2005
Financial Express (India)
ICICI Bank in Tie-Up to set up Kiosks for Boosting Priority Sector Lending
April 12, 2005
Hindustan Times (India)
AIBEA Threatens to Organize More Strikes
April 17, 2005
Hindustan Times (India)
Banking Policies Must Refocus on Deposit Holders
April 28, 2005
Financial Express (India)
Welcome Move by India's Urban Co-operative Banking
May 4, 2005
Business Line (India)
A Protective Net - Exploring Paying Workers through Bank Accounts
May 13, 2005
Financial Services Distribution (India)
Country Survey India: A Market of Contrasts
May 20, 2005
Times of India
Banknet Conference on Payment Systems Takes Place in Mumbai
May 27, 2005
Economic Times (India)
RBI Working on Payment Rules
May 28, 2005
Indian Institute of Management Sir Ratan Tata Trust Fund for Research Collaborations in Microfinance Report
Building Bridges between the Poor and the Banking System
June 3, 2005
Legislation
Contact
NGO Contacts
Mathew Titus, Executive Director
Sa-Dhan - The Association of Community Development Finance
Institutions
12 and 13, 2nd Floor
Special Instutional Area
Shaheed Jeet Singh Marg.
New Delhi - 100 067 INDIA
sa-dhan@mantraonline.com
http://www.sa-dhan.org/
Office of the IADL President
Mr. Jitendra Sharma
17 Lawyers Chamber
Supreme Court
New Delhi – 110001, India
Tel:+91 11 23382271
Fax:+91 1245102963
Email: iadlpresident@touchtelinida.net
jsharma@vsnl.com
Highlights
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India