WHAT IS RESERVE BANK OF INDIA
The Reserve Bank of India is the central Bank of the country entrusted with the task of monetary stability, the management of currency and the supervision of the financial as well as the payment system. In a simple manner we can understand that the Reserve Bank of India controls all banks functioning in India
Reserve Bank is the Bank of all Banking Companies working in India. The reserve Bank of India was constituted during British Raj in India on Ist April .1934.
The Reserve Bank of India was setup on the basis of the recommendations of the Hilton Young Commission. The Reserve Bank of India Act 1934 provides the statutory basis of the functioning of the Bank, which commenced operations on Ist April 1935. It was constituted to: -
· Regulate the issue of Bank Notes
· Maintain reserves with a view to securing monetary stability and
· To operate the credit and currency system of the country to its advantage.
Tuesday, March 10, 2009
Saturday, March 7, 2009
my banking
FUNCTIONS
Some of the functions of BFS include: -
· Restructuring of the system of Bank Inspections
· Introduction of off-site surveillance
· Strengthening of the role of statutory Auditors and
· Strengthening of the internal defenses of supervised institutions
So far legal aspect is concerned the most important for RBI is Banking Act. Governing Banking operations like: -
· Formulates, Implements and monitors the monetary policy.
· Maintains price stability and ensuring adequate flow of credit to productive sectors.
· Prescribes broad parameters of banking operations within which the country’s banking and financial system functions
· Maintains public confidence in the system, protect depositors interest and provide cost effective banking services to the public
RBI ALSO PERFORMS CERTAIN REALTED FUNCTIONS.
It is a Banker to the Government, Performs Merchant Banking functions for the central and the state governments; also acts as their Banker.
It is also a Banker to Banks.
Maintains Banking accounts of all schedule Banks.
There is long history of banking Industry but the main objective of this book is to acquaint the common man and the younger generation with banking norms in their early childhood so that they are equipped well to deal efficiently with their banking operations whenever they are required to obtain banking services.
Some of the functions of BFS include: -
· Restructuring of the system of Bank Inspections
· Introduction of off-site surveillance
· Strengthening of the role of statutory Auditors and
· Strengthening of the internal defenses of supervised institutions
So far legal aspect is concerned the most important for RBI is Banking Act. Governing Banking operations like: -
· Formulates, Implements and monitors the monetary policy.
· Maintains price stability and ensuring adequate flow of credit to productive sectors.
· Prescribes broad parameters of banking operations within which the country’s banking and financial system functions
· Maintains public confidence in the system, protect depositors interest and provide cost effective banking services to the public
RBI ALSO PERFORMS CERTAIN REALTED FUNCTIONS.
It is a Banker to the Government, Performs Merchant Banking functions for the central and the state governments; also acts as their Banker.
It is also a Banker to Banks.
Maintains Banking accounts of all schedule Banks.
There is long history of banking Industry but the main objective of this book is to acquaint the common man and the younger generation with banking norms in their early childhood so that they are equipped well to deal efficiently with their banking operations whenever they are required to obtain banking services.
Wednesday, March 4, 2009
Introduction of a Bank (why should you read this book)
Every one of us now a day is compelled to take services of a bank. Let it be purchasing a house, getting an electric connection, water connection, admitting a child in a school, taking admission in any educational institution, applying for a job every where a bank’s draft, a cheque or some other method of payment is pre- required without which nothing is found possible. In other words a Bank has become a necessity of our life in one way or the other way. In case you are getting some payment from any organization you will either receive a Bank cheque or a bank draft? In order to get the hard cash in your hands you need the services of a bank. Not only receiving money, even for making payments to some one else the services of a bank are required. In these circumstances every one of us is bound to avail the services of a bank for one or the other reasons.
It has generally been found that the knowledge about the banking services is not available to the general people who under compeltion go to a bank. It is seen that most of the common people try not to go to a bank for want of knowledge. Some time a common person is afraid of using the banking services only because they fear whether or not the dealing with a bank are reliable. Most of the common persons even today rely upon postal services for upkeep of their meager savings. Today in days of Internet banking most of the people still believe using the method of money orders through a post office to remit their money to their desired destinations.
Good from the old British days the post offices in India have been acting as bankers also and were a very reliable source of remitting money from one place to another place with authenticity. This history of postal banking is still prevailing in our rural India and most of the common men are still confined to this method of dealing in money. A trust on a tested system lasts longer. It is found really difficult that most of our country men are afraid of using banking services and rather prefer to go to a post office and in the absence of a nearby post office they avail the services of a local lender, Mahajan and some body else to take care of their hard earned money. In case of availing the services of private persons most of the poor people have to repent for fraudulent activities of such private persons or their middleman. Of late banking was the business of an elite class where poor persons dare not to deal with. After the Nationalization of banks in India a ray of hope was opened for a common man to enter into the premises of a bank. With passage of time the bank of today has become the bank of every one whether rich or a poor. Certain specified guidelines have been prescribed for every bank to deal with general public and with the result every other person has started using the services of banking industry.
By and large now a days at least one person from each home in urban areas is using services of one or the other banks for whatsoever purpose. But it is seen the habit of dealing with a bank is still at its infant stage so far as a common man is concerned. In some cases it is found that even well educated persons do not know their bank. They are banking in a stereotype manner without knowing what is a bank, what does it do, and how to use banking services in best of their interest. In order to inculcate a habit of banking, its uses, its benefits, methods of banking practice, banking law and other related matters are going to be discussed in the coming chapters of this book. First of all I shall try to make the readers understand what a bank is. What does it do, how can one avail the banking services, How to open an account with a bank, what are the prerequisites to open an account and once an account has been opened what is relation with the bank and its customer. Usually common person is ignorant about his rights and is some times denied proper banking services for want of knowledge. It has therefore being made an effort to acquaint a common man about banking services available for them. In the light of what has been stated above it becomes of utmost important for us to know what is a bank and what does it do.
WHAT IS A BANK
A Bank is an establishment, office, and a company, which deals in money. A bank receives money in deposit accounts of its customers on certain conditions in different type of deposit accounts. The conditions of these accounts differ from the nature of accounts. In deposit accounts banks also pay interest to its customers as per the nature and conditions of the account. A bank also lends money to its customers as per decided guideline. Although no statuary definition of a bank is given anywhere but as per section 5 (c) of Banking Regulation Act 1949 a “ Banking Company” means any company which transacts the business of a Banking Company in India. The term has been further elaborated under section 5(B) of the said Act which says The Banking means the accepting for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise, and withdraw able by cheque, draft, pay order or otherwise.
Please do not be confused from the different clauses of the banking act, as we are not going to examine the legal aspects of banking companies in India. Our motto is to understand how we perform our banking activities in such a way that these fulfill our day to banking requirements in a way beneficial to us
One thing is very important to understand that any Bank functioning in India is bound to obey the rules of the Reserve Bank of India. A better care of the customers is taken by all banks is ensured by the Reserve Bank of India. As such the Reserve Bank of India keeps an attentive eye on the functioning of banks in India and also takes corrective steps whenever required to protect the interest of each banking customer. Now the question arises what is Reserve Bank of India.
Every one of us now a day is compelled to take services of a bank. Let it be purchasing a house, getting an electric connection, water connection, admitting a child in a school, taking admission in any educational institution, applying for a job every where a bank’s draft, a cheque or some other method of payment is pre- required without which nothing is found possible. In other words a Bank has become a necessity of our life in one way or the other way. In case you are getting some payment from any organization you will either receive a Bank cheque or a bank draft? In order to get the hard cash in your hands you need the services of a bank. Not only receiving money, even for making payments to some one else the services of a bank are required. In these circumstances every one of us is bound to avail the services of a bank for one or the other reasons.
It has generally been found that the knowledge about the banking services is not available to the general people who under compeltion go to a bank. It is seen that most of the common people try not to go to a bank for want of knowledge. Some time a common person is afraid of using the banking services only because they fear whether or not the dealing with a bank are reliable. Most of the common persons even today rely upon postal services for upkeep of their meager savings. Today in days of Internet banking most of the people still believe using the method of money orders through a post office to remit their money to their desired destinations.
Good from the old British days the post offices in India have been acting as bankers also and were a very reliable source of remitting money from one place to another place with authenticity. This history of postal banking is still prevailing in our rural India and most of the common men are still confined to this method of dealing in money. A trust on a tested system lasts longer. It is found really difficult that most of our country men are afraid of using banking services and rather prefer to go to a post office and in the absence of a nearby post office they avail the services of a local lender, Mahajan and some body else to take care of their hard earned money. In case of availing the services of private persons most of the poor people have to repent for fraudulent activities of such private persons or their middleman. Of late banking was the business of an elite class where poor persons dare not to deal with. After the Nationalization of banks in India a ray of hope was opened for a common man to enter into the premises of a bank. With passage of time the bank of today has become the bank of every one whether rich or a poor. Certain specified guidelines have been prescribed for every bank to deal with general public and with the result every other person has started using the services of banking industry.
By and large now a days at least one person from each home in urban areas is using services of one or the other banks for whatsoever purpose. But it is seen the habit of dealing with a bank is still at its infant stage so far as a common man is concerned. In some cases it is found that even well educated persons do not know their bank. They are banking in a stereotype manner without knowing what is a bank, what does it do, and how to use banking services in best of their interest. In order to inculcate a habit of banking, its uses, its benefits, methods of banking practice, banking law and other related matters are going to be discussed in the coming chapters of this book. First of all I shall try to make the readers understand what a bank is. What does it do, how can one avail the banking services, How to open an account with a bank, what are the prerequisites to open an account and once an account has been opened what is relation with the bank and its customer. Usually common person is ignorant about his rights and is some times denied proper banking services for want of knowledge. It has therefore being made an effort to acquaint a common man about banking services available for them. In the light of what has been stated above it becomes of utmost important for us to know what is a bank and what does it do.
WHAT IS A BANK
A Bank is an establishment, office, and a company, which deals in money. A bank receives money in deposit accounts of its customers on certain conditions in different type of deposit accounts. The conditions of these accounts differ from the nature of accounts. In deposit accounts banks also pay interest to its customers as per the nature and conditions of the account. A bank also lends money to its customers as per decided guideline. Although no statuary definition of a bank is given anywhere but as per section 5 (c) of Banking Regulation Act 1949 a “ Banking Company” means any company which transacts the business of a Banking Company in India. The term has been further elaborated under section 5(B) of the said Act which says The Banking means the accepting for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise, and withdraw able by cheque, draft, pay order or otherwise.
Please do not be confused from the different clauses of the banking act, as we are not going to examine the legal aspects of banking companies in India. Our motto is to understand how we perform our banking activities in such a way that these fulfill our day to banking requirements in a way beneficial to us
One thing is very important to understand that any Bank functioning in India is bound to obey the rules of the Reserve Bank of India. A better care of the customers is taken by all banks is ensured by the Reserve Bank of India. As such the Reserve Bank of India keeps an attentive eye on the functioning of banks in India and also takes corrective steps whenever required to protect the interest of each banking customer. Now the question arises what is Reserve Bank of India.
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