CHAPTER 1 BANKING- AN INTRODUCTION CHAPTER INDEX 1.3...

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CHAPTER – 1

BANKING- AN INTRODUCTION

CHAPTER INDEX

No. Content of the Chapter Page No.

1.1 Origin and History of Bank: An International Perspective 2

1.2 Important Events in Banking History- World Wide 7

1.3 Origin and History of Banks: An Indian Perspective 8

1.4 The Banking Structure in India 14

1.5 Functions of Commercial Banks 18

1.6 Profile of Sampled Units 26

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CHAPTER – 1

BANKING- AN INTRODUCTION

1.1 Origin and History of Bank: An International Perspective

There is no common view of the economist about the origin of the word

„banking‟. According to some economist, the word bank is derived from the Greek

word „Banque‟ i.e., a bench. Some economist says that the word bank is derived

from the German word „banc‟ which means a joint stock firm.1 According to the

others, the word bank is derived from the words „Banco‟ or „Banque‟ that is a bench

upon which the early European money-lenders and money changers used to display

their coins and transact business in the market place. When the banker failed, his

„Banco‟ was broken up by the people and hence the word „bankrupt‟ was emerged.2

The new evidences show that the activities of money changers were being

done in the temples of Jerusalem. In the ancient Greece, around 2000 B.C. the

famous temples of Ephesus, Delphi and Olympia were used as depositories for

peoples‟ surplus funds and these temples were the centers of money-lending

transactions. The priests of these great temples acted as the financial agents until

public confidence was destroyed by the spread of disbelief in the religion. Evidences

show that credit by compensations and by transfer orders were found in Assyria,

Phoenicia and Egypt before the system was fully developed in Greece and Rome. 3

The evidences of „basic banking‟ are also found in the Chaldean, Egyptian

and Phoenician history. According the Alfred Marshall, “in Greece, the temples of

Delphi and other safer places acted as store houses for the precious metals before the

days of coinage, and in later times they lent out money for public and private

purposes at interest, though they paid none themselves. Private money changers

began with the task of reducing many metallic currencies more or less exactly, to a

common unit of value and went on to accept money on deposit at interest, and to

lend it out at higher interest permitting mean while drafts to withdrawn on them”.4

1 Vaish, M.C. (1991), Money, Banking, Trade and Public Finance, Wiley Eastern Limited, New

Delhi, p. 248 2 Shah and Mehta(1987), Master Key to Practice ad Law of Banking, Chetna Book Depot, Bombay, p.1 3 Vaish, M.C. (1991), Money, Banking, Trade and Public Finance, Wiley Eastern Limited, New

Delhi p. 248 4 Marshall, Alfred (1923), Money, Credit and Commerce, p.295

3

The letters of credit that we know today as a part of modern banking system

were first developed in ancient China during Qin Dynasty during the year 221B.C.

to 206 B.C. During this time period Chinese currency was developed with the

introduction of standardize coin that were helpful for easier trade across China. The

development of currency led to the development of letters of credit. This letters of

credit were issued by merchants who acted as the banks.5

Development in banking in ancient Rome was of the same pattern as in the

Greece. After the fall of Roman Empire and after the death of Emperor Justinian in

565 A.D., banking suffered set back. The revival of banking, trade and commerce

was in the middle age. During the Middle Ages, money lending activities were

largely in the hands of the Jews and the financiers of Lombardy who lent to all. The

Christians were forbidden by the Canon Law to indulge in the sinful activity of

lending money to the others on interest. The attitude of Christianity was indifferent

towards wealth and the teachings of Christ also displayed resentment towards

wealth. The Medieval, (connected with the middle ages, about A.D. 1000 to A.D.

1450), Church considered the practice of lending money to people at unfairly high

rates of interest as an unforgivable sin for a Christian. However with the passage of

time the hold of the Church weakened and the development of trade and commerce

took place around the 13th century; the Christians also took part in money lending

activities. They entered into keen competition with the Jews who had monopoly in

this business until now.

The banking business as it can be seen now was first begun around the

middle of the 12th

century in Italy. In the year1157, The Bank of Venice was the first

public banking institution to be established in Italy. The Bank of Barcelona was

established in the year 1401 and The Bank of Genoa was established in the

year1407. The historical evidences revealed that The Bank of Venice and The Bank

of Genoa successfully continued their operations until the end of 18th century. The

Bank of Barcelona could not survive. The business skills of Italians were enhanced

by the invention of double entry book-keeping system by them. By this system of

accountancy they enabled themselves to avoid the Christian sin of usury. Interest on

5 Wagel, Srinivas (1915), Chinese currency and banking,(source-

website:en.wikipedia.org/wiki/history of banking, p. 3) accessed on 6-4-2012.

4

a loan was presented in the accounts either as a voluntary gift from the borrower or

as a reward for the risk taken.6

The emergence of banking in Western Europe founded its roots in the 12th

century were the need to transfer large sums of money to finance the Crusades was

emerged. In 1162, King Henry II charged a tax to support Crusades. During the time

of King Henry II, the Templars and hospitallers acted as Henry‟s bankers in the

Holy Land. The Templars expanded their activities widely during the year 1100

to1300. During that time they collected large land holdings across the Europe.

During this time period they started the practice of issuing a demand note against the

local currency. This demand note was used for movement of money from one place

to another to avoid the risk of robbery while travelling (The demand note of that

time is now popularly known as „Travelers Cheque‟).

As the trading and commercial activities expanded in Northern Europe, a

number of private banking houses were established. The famous house of Fuggers

and Augsburg were the private banking houses in the Europe. In the Middle Age in

Europe, the bankers of Lombardy were famous. The bankers of Lombardy planted

the seeds of modern banking in England by establishing a bank in London. The

locality in which the bank was established is now famous as „The Lombard Street‟.

During 13th and 14

th century A.D., Siena and Lucca, Milan and Genoa all

were earning profit from the banking business but Florence took the lions share in

the profit. Florence was well equipped for international finance because of its

famous gold coin which was known as the „Florin‟. Florin was first minted in the

year 1252. The Florin was widely recognized and trusted during its days. By the

early 14th century, the Bardi and the Peruzzi were the two families in the city that

had grown enormously wealthy by offering financial services. These families

arranged for the collection and transfer of money due to great feudal powers. These

families provided the facilities of bills of exchange by means of which money paid

in by a debtor in one term could be paid out to creditor presenting the bill

somewhere else. In the early 14th

century, these families had their offices in

Barcelona, Seville and Majorca, in Paris, Avignon, Nice and Marseilles, in London,

Bruges, Constantinople, Rhodes, Cyprus and Jerusalem. As per historical evidence,

in 1340s King Edward III of England was engaged in the war with France. He

6Source(modified):(http://www.historyworld.net/wrldhis/PlainTextHistories.asp?groupid=2453&Hist

oryID=ac19&gtrack=pthc, p.2) accessed on 6-4-2012

http://www.historyworld.net/wrldhis/PlainTextHistories.asp?groupid=2453&HistoryID=ac19&gtrack=pthc



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borrowed heavily from Florence. He borrowed 6,00,000 gold Florins from the

Peruzzi and another 9,00,000 from the Bardi. In the year 1345 Edward III defaulted

and both the Florentine families went bankrupt.

Florence could survive even in such a disaster. Half a century later again

great financiers came into being in the city. In the 15th

century, two families, the

Pazzi and the Medici were the prominent financiers of Florence. In the beginning of

15th century, the Medici was the greatest banking dynasty of Europe, but their

political power distracted them from the business of money making. During the

reign of Lorenzo-the Magnificent, the bank‟s finance came into death-defying state.

The Medici later succeeded as dukes of Florence. But their role as leading

bankers was taken over by German dynasty, that of the Fuggers. In Southern

Germany, The Fuggers, the important banking family played an important role in the

establishment of banking during 1485 to 1560. Like the Medici, the Fuggers also

collected vast wealth by the finances of the pope and of the great princes. The

Fugger‟s wealth was due to the shift of European power to the Habsburgs in the late

15th century. The Habsburgs family derived from an Augsburg weaver. Their first

business was in textiles. They made their first loan to a Habsburg archduke in 1487

by taking as security and interest in silver and copper mines in the Tirol. In 1491 a

loan was made to Maximilian, which was secured by the fudal rights to two Austrian

countries. Maximilian was the Holy Roman Emperor. A subsequent loan was given

to him in 1505. In Northern German city, Dutch Bankers played an important role in

establishing the banking system. In 1590, Berenberg Bank was established in

Germany. It is the oldest private bank in Germany established by Dutch Brothers,

Hance and Paul Berenberg in Hamburg. This bank is still owned by The Berenberg

dynasty.7

With the state initiative, in 1587, the Banco della Piazza di Rialto was

opened in Venice. Its purpose was to carry out an important function of holding

merchants‟ funds on safe deposit and enabling financial transactions in Venice and

elsewhere in the world without the physical transfer of the coins. This system is

currently used as the cheque. So, we can say that the system of cheque was

originated in the 16th century A.D. In 1617 the Banco Giro was established to solve

7 Haberlein, M. (2012), The Fuggers of Augsburg: Pursuing Wealth and Honor in Renaissance

Germany, ,(source-website:en.wikipedia.org/wiki/history of banking, p. 6) accessed on 7-4-2012

6

the problems encountered by the Banco della Piazza di Rialto. The Banco della

Piazza di Rialto got into trouble because of making of unsecured loans.8 During the

18th century such banks undertook several tasks which are now associated with

central banks.

In London, apart from the private banking houses such as the bankers of

Lombardy there were also established the public banks like The Bank of Amsterdam

which was founded in 1609. The Bank of Amsterdam was the great bank of the 17th

century. It enjoyed a prestigious position no less important than is currently held by

The Bank of England.

For the first time in the history, The Bank of Amsterdam became a model of

central banking. In 1968 Sveriges Riks Bank was the first central bank. It was

followed by The Bank of England in 1694 as a central bank of England. The

development of central bank was also found in North America by the initiative of

John Colman who proposed the idea of bank that would issue paper. This concept is

known as “Colman Bank” concept. This led to the development of the bank of North

America as a central bank in 1784. After that, in 1791 one such central bank was

established but its charter expired in 1811. Second attempt was made by establishing

The Bank of United States in 1816 but its charter was also expires in 1863. In 1913

the creation of Federal Reserve was the central bank of US.

The development of banking in England gives it roots to the activities of

London goldsmiths during the reign of Queen Elizabeth I. During that time several

money changers, money lenders and exchange specialist were also developed but the

gold smiths assumed prominence among them around the middle of 17th century. In

the year 1640, King Charles I seized large gold hoards that were kept in the famous

tower of London by the merchants of London. This event frightened the merchant of

London and they decided to look elsewhere for the safe deposit of their surplus

funds. They deposited their surplus bullion with the goldsmiths. The goldsmiths

earned handsome interest income by lending the surplus bullion of merchants to the

others. Later, the goldsmiths began to pay some interest to their depositors with a

view to obtaining more deposits. The gold smiths used to obtain valuables and

money from their customers for safe custody. The goldsmiths issued receipts

8Source(modified):(http://www.historyworld.net/wrldhis/PlainTextHistories.asp?groupid=2453&Hist

oryID=ac19&gtrack=pthc, p.3) accessed on 7-4-2012




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acknowledging the same. With the passage of time, these receipts came to be known

as „goldsmith‟s promissory notes‟.

The business of goldsmiths suffered a set-back as a result of maltreatment by

the government of Charles II. Because of the maltreatment from the government of

Charles II, the goldsmiths were ruined. The ruin of goldsmiths was very significant

for the development of banking in England. This led to the establishment of The

Bank of England in the year 1694.

1.2 Important Events in Banking History- World Wide:

The above given details of the history of banking at the international level

shows almost all major events that have taken place in the development of banking

world-wide. Besides these major events, there are some important events in the

development of banking at the international level. To note theses important events is

very necessary in order to find out actual development of banking. The list of such

events is given as follows:

Table – 1.1

A Table Showing Important Events in Banking History- World Wide

Year Event

1100-1300 The Knights of Templar ran the earliest Euro-wide banking.

1542-1551 During the reigns of Henry VIII and Edward VI the great

debasement of English banking established.

1553 In London, the first joint stock company, The Company of Merchant

Adventures to New Lands was chartered.

1602 The Dutch East India Company established the Amsterdam Stock

Exchange for dealing its printed stocks and bonds.

1609 On the basis of Amsterdam Stock Exchange, The Amsterdam

Exchange Bank was founded.

1656 The first European bank was opened in Sweden for private clientele.

This bank was the first to use bank notes. During 1668, the

institution was converted in to public bank.

1690 The Massachusetts Bay Colony was the first of the 13 colonies to

issue permanently circulating bank notes.

1694 In order to supply money to the king, The Bank of England was set

up.

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1695 The Bank of Scotland was establishing by The Parliament of

Scotland.

1716 General Bank was established by John Law

1720 Many bankers were forced to quit the banking business on account

of European financial crisis which was caused due to the South Sea

Bubble and John Law‟s Mississippi Scheme.

1782 The Bank of North America was established and they started their

operations.

1791 The US Congress chartered the first bank of the US, which was

chartered for 20 years.

1800 Europe wide banking was established by the Rothschild family.

Napoleon Bonaparte founded the Bank of France

1816 The second bank of the US was chartered for 20 years to finance the

country in the post war of 1812.

1818 The first savings bank of Paris came into being.

1870 The Deutsche Bank was established

1930-33 Due to a massive crash of the Wall Street in 1929, 9,000 banks were

closed. It wiped out 1/3 of the money supply in the US

1986 The deregulation of London financial markets which is known as

“The Big Bang” played a great role to reaffirm London‟s position as

a global centre of world banking.

2007 The period of financial crisis worldwide that experienced a massive

failure and bailout of a large number of the world‟s biggest banks.

2008 In the history of banking, it was the largest bank failure with the

collapse of Washington Mutual.

1.3 Origin and History of Banks: An Indian Perspective

1.3.1 Before Independence

The origin of banking system in India can be traced back to the Vedic period.

There are a lot of references in Vedic literature about money lending which is similar

to banking business of the modern era. After the time of Vedic period, references of

banking system also found in Manu Smriti. During this time, banking became full

time business and got diversified with bankers performing most of the functions of

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the present day. During the period of Manu Smriti, the Vaish community conducted

banking business. King Manu, the great Hindu Jurist, devoted a section of his book

“Manu Smriti” to deposits and advances and gave rules relating to rates of interest

to be charged.9 After that time, during the Buddhist period, the banking business was

decentralized and it was modernized. During this period, as a result of

decentralization, Brahmins and Kshatriyas also took the banking business as their

profession. During this period, banking became more specific and systematic.

During this time bills of exchange came in wider use. Bankers were known as

“Shresthis”. They were more influential in the society and they acted as royal

treasurer.

From the ancient time in India, the banking system existed. In the ancient

time, when Indians left their homes for pilgrimages or business for long period of

time, they used to deposit their money and valuables for safe keeping with the

person of repute. These persons were known as Shroffs, Seths, Sahukars, Mahajans,

Chettis etc. These people carried business of banking since ancient times. These

domestic bankers included very small money lenders.10

In India, during the Mughal period, the domestic bankers played a very

important role in lending money and financing of foreign trade and commerce.

Mughal dynasty started in 1526 A.D. with Babur ascending the throne of Agra.

During the Mughal dynasty the domestic bankers engaged in the profitable business

of money changing. During this period, the banking business gave political stability

to the country. Every city had a Seth who was also known as „Shah‟ or „Shroff‟. This

Sheth performed a number of banking functions within his region. He was respected

by all people as an important citizen. In major cities of, there was a „Nagar Sheth‟ or

„Town Banker‟ besides Shroffs. The Nagar Sheth was the key person in changing

funds from place to place and doing collection business through Hundis.11

During the 17th century, the English traders came to India. The English

traders established their own agency houses at the port towns of Bombay, Calcutta

and Madras. These agency houses also carried on the banking business besides trade

and commerce.

9 Agrawal, O.P. (2011), Banking and Insurance, Himalaya Publishing House Pvt. Ltd., New Delhi,

p.2 10 Maniar, B.G. (2010), Legal Regulations of Banking, Saurashtra University, Rajkot, p. 11 11 Source (Modified): http://www.gatewayforindia.com/History/Muslim-history accessed on 9-4-2012

http://www.gatewayforindia.com/History/Muslim-history

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The development of means of transport and communication caused the

deflection of trade and commerce along the new route. This created the downfall in

the activities of the domestic banking. To fill the gap of the banking activities

created by the downfall of domestic banking and to fill the requirements of the

English trade, the East India Company came to establish the bank of the western

style. Bank of Hindustan was the first joint stock bank founded in India in 1770. It

was founded by the famous English agency house of M/s. Alexander and Company.

The Bengal Bank and the Central Bank of India were established in 1785. The

General Bank of India was set up in 1786. The Bank of Bengal was the first of the

three Presidency Banks. It was established in Calcutta in 1806 in the name of the

Bank of Calcutta. It was renamed in 1809 on the grant of the charter as a Bank of

Bengal12

. The other two presidency banks namely, the Bank of Bombay and the

Bank of Madras, were established in 1840 and 1843 respectively. In 1865, the

Allahabad Bank was established, and for the first time, exclusively by the Indians,

Punjab National Bank Ltd. was set up in 1894. Its headquarters were at Lahore.

Between 1906 and 1913, Bank of India, Central Bank of India, Bank of Baroda,

Canara Bank, Indian Bank and Bank of Mysore were set up. The three presidency

banks were amalgamated under the name of the Imperial Bank of India in 1921. The

bank was authorized to hold Government balances and manage public debt.

However, it was not given the power to issue notes. Issuing notes was kept under the

close control of the Indian Government. The banks had to work as clearing houses.

The Imperial Bank of India was nationalized in 1955 by the SBI act.13

During this time period, the growth of banks was very slow and banks

experienced periodic failures between 1913 and 1948. There were around 1100

banks during this time period and most of them were small banks.

As per the Reserve Bank of India Act, 1934, the Reserve Bank of India was

established as an apex bank. It didn‟t have major government ownership. To

streamline the functioning of the banks, the Government of India Constituted the

Banking Companies Act, 1949. This act was changed to Banking Regulation Act,

1949. As per the Banking Regulation (Amendment) Act, 1965, RBI was given

12 Gopinath, M.N. (2012), Banking Principles and Operations, Snow White Publications Pvt. Ltd.,

Mumbai, p. 6 13 ibid

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extensive powers for the supervision of banking in India as the Central Banking

authority.

1.3.2 After Independence:

The government of India took major initiatives in the Indian Banking Sector

Reforms after the Independence. By passing the State Bank of India Act in 1955, the

government of India nationalized the Imperial Bank of India. The government gave

extensive banking facility to this bank especially in the rural and semi urban areas.

The government of India formed the State Bank of India (SBI) to act as the principal

agent of the RBI and to handle the banking activities of the Union and the State

Government.

The government of India took major initiatives in the Indian Banking Sector

Reforms after the Independence. The country had got the gift of a banking system

that was having the pattern of British Banking System. There were many joint stock

companies that were running banking business in India but they had major

concentration on the major cities of the country. The rural and semi-urban areas

were unbanked. Even the financing facilities of these banks were limited to the

export of Jute, Tea, etc. and traditional industries like textile and sugar. There was

no uniform regulatory system in India to control the activities the Indian banks.

After the partition of the nation, the major concern was about the banks located in

Pakistan. The steps were taken to close some of them as per the desire of the

government of Pakistan. In 1949, around 55 banks went into liquidation or they

went out of the banking business. During this time period the banking activities

didn‟t receive much attention and there were no major efforts for the regulation of

the Indian banking.

The government of India formed the State Bank of India (SBI) to act as the

principal agent of the RBI and to handle the banking activities of the Union and the

State Government. By passing the State Bank of India Act in 1955, the government

of India nationalized the Imperial Bank of India. The government gave extensive

banking facility to this bank especially in the rural and semi urban areas. There were

7 subsidiary banks. Their associate banks were 5960. The State Bank group included

State Bank of Hyderabad, State Bank of Mysore, State Bank of Travancore, State

Bank of Bikaner and Jaipur, State Bank of Indore, State Bank of Patiala and State

Bank of Saurashtra.

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1.3.3 Nationalization of Banks:

In India, the major power in terms of banking and finance was in the hands

of private sector. There was a problem with these private sector banks. These banks

were providing loans and advances to the large and medium scale industries and big

business houses and that the priority sectors were not given much attention. To

resolve this problem, the government of India nationalized 14 major banks with

effect from 1st February, 1969. On 19

th July, 1969, 14 major nationalized banks were

there in India.

Following is the list of nationalized banks in India.

(1) The Central Bank of India Ltd.

(2) The Bank of India Ltd.

(3) The Punjab National Bank Ltd.

(4) The Bank of Baroda Ltd.

(5) The United Commercial Bank Ltd.

(6) The Canara Bank Ltd.

(7) The United Bank of India Ltd.

(8) The Dena Bank Ltd.

(9) Syndicate Bank Ltd.

(10) The Union Bank of India Ltd.

(11) The Allahabad Bank Ltd.

(12) The Indian Bank Ltd.

(13) The Bank of Maharashtra Ltd.

(14) The Indian Overseas Bank Ltd.

Each bank was having deposits of more than Rs. 50 crore and having

aggregate deposits of Rs. 2632 crore and there were 4130 branches.

On 15th

April, 1980, six other banks were also nationalized. The list is given below.

(1) The Andhra Bank Ltd.

(2) The Corporation Bank Ltd.

(3) The New Bank of India Ltd.

(4) The Oriental Bank of Commerce Ltd.

(5) The Punjab and Sind Bank Ltd.

(6) The Vijaya Bank Ltd.

The New Bank of India and Punjab National Banks were merged in 1993.

The nationalization of these banks brought the improvement in the functioning of

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these banks. However, there are some problems related to the NPAs, Competition,

Competency, Overstaffing, Inefficiency, etc. for the nationalized banks.

After the period of nationalization, the major changes in the Indian banking

sector came during the phase of economic reforms. The economic reforms of the

1991 brought the Indian Banking sector to the reality of the world. In 1991,

Liberalization, Privatization and Globalization (LPG) policy was adopted.

According to this policy, majority of the restrictions on the Indian banking sector

were removed and the banking sector was liberalized. A sound system of banking

was adopted by the government of India. Budget policy and suggestions provided by

Shri Dr. Manmohan Singh and the Governor of Reserve Bank of India made the

effective development of the Indian banking sector. As per the guidelines provided,

the importance of public sector bank should not decrease and the importance of

private sector banks and foreign banks should be increased. As a result, the country

is flooded with the foreign banks and their ATM stations. The government is making

efforts for giving more satisfactory services to the customers. To modernize the

banking system, the government introduced the phone banking and net banking. The

system of banking became more convenient and swift. The Indian banking sector

became buoyant. The country has become capable to face the financial crisis due to

flexible exchange rate regime. The foreign exchange reserve is high and the country

is on the path of development.

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1.4 The Banking Structure in India:

Indian banking industry has been divided into two parts, organized sector

and unorganized sector. The organized sector consists of Reserve Bank of India,

Commercial Banks and Co-operative Banks, and Specialized Financial Institutions

(IDBI, ICICI, IFC etc). The unorganized sector includes money lenders and

indigenous bankers.

Chart – 1.1

A Chart Showing the Banking Structure in India

RESERVE BANK OF INDIA

Regional

Bank

Co-operative

Bank

Public Sector

Bank

Non-scheduled

Commercial

Bank

Scheduled

Commercial

Bank

Private sector

Bank

State Bank

Group Nationalized

Bank

Others

(IDBI)

Commercial

Bank

New Private

Sector Banks

Old Private

Sector Banks Foreign

Banks

15

1.4.1 Reserve bank of India

The reserve bank of India is a central bank and it was established in April 1, 1935 in

accordance with the provisions of reserve bank of India act 1934. The central office

of RBI is located at Mumbai since its inception. Originally the reserve bank of India

was privately owned, but since nationalization in 1949, RBI is fully owned by the

Government of India. It was inaugurated with share capital of Rs. 5 Crores divided

into shares of Rs. 100 each fully paid up. RBI is governed by a central board

(headed by a governor) appointed by the central government of India. RBI has 22

regional offices across India. The reserve bank of India was nationalized in the year

1949. The general superintendence and direction of the bank is entrusted to central

board of directors of 20 members, the Governor and four deputy Governors, one

Governmental official from the ministry of Finance, ten nominated directors by the

government to give representation to important elements in the economic life of the

country, and the four nominated director by the Central Government to represent the

four local boards with the headquarters at Mumbai, Kolkata, Chennai and New

Delhi. Local Board consists of five members each central government appointed for

a term of four years to represent territorial and economic interests and the interests

of cooperative and indigenous banks. The RBI Act 1934 was commenced on April

1, 1935. The Act, 1934 provides the statutory basis of the functioning of the bank.

1.4.1.1 Commercial Banks

The commercial banking structure in India consists of scheduled commercial banks,

and unscheduled banks.

1.4.1.1.1 Scheduled Banks:

Scheduled Banks in India constitute those banks which have been included in the

second schedule of RBI act 1934. RBI in turn includes only those banks in this

schedule which satisfy the criteria laid down vide section 42(6a) of the Act.

“Scheduled banks in India” means the State Bank of India constituted under the

State Bank of India Act, 1955 (23 of 1955), a subsidiary bank as defined in the

State Bank of India (subsidiary banks) Act, 1959 (38 of 1959), a corresponding new

bank constituted under section 3 of the Banking companies (Acquisition and

Transfer of Undertakings) Act, 1980 (40 of 1980), or any other bank being a bank

included in the Second Schedule to the Reserve bank of India Act, 1934 (2 of 1934),

but does not include a co-operative bank”. For the purpose of assessment of

performance of banks, the Reserve Bank of India categories those banks as public

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sector banks, old private sector banks, new private sector banks and foreign banks,

i.e. private sector, public sector, and foreign banks come under the umbrella of

scheduled commercial banks.

1.4.1.1.1.1 Public Sector Banks:

Public sector banks are those in which the majority stake is held by the Government

of India (GoI). Public sector banks together make up the largest category in the

Indian banking system. There are currently 27 public sector banks in India. They

include the SBI and its 6 associate banks (such as State Bank of Indore, State Bank

of Bikaner and Jaipur etc), 19 nationalized banks (such as Allahabad Bank, Canara

Bank etc) and IDBI Bank Ltd. Public sector banks have taken the lead role in branch

expansion, particularly in the rural areas.

1.4.1.1.1.2 Private Sector Banks:

In this type of banks, the majority of share capital is held by private individuals and

corporate. Not all private sector banks were nationalized in 1969, and 1980. The

private banks which were not nationalized are collectively known as the old private

sector banks and include banks such as The Jammu and Kashmir Bank Ltd., Lord

Krishna Bank Ltd etc. Entry of private sector banks was however prohibited during

the post-nationalization period.

1.4.1.1.1.2.1 Old Private Sector Banks & New Private Sector Banks:

In July 1993, as part of the banking reform process and as a measure to induce

competition in the banking sector, RBI permitted the private sector to enter into the

banking system. This resulted in the creation of a new set of private sector banks,

which are collectively known as the new private sector banks. As at end March,

2009 there were 7 new private sector banks and 15 old private sector banks

operating in India.

1.4.1.1.1.2.2 Foreign Banks:

Foreign banks have their registered and head offices in a foreign country but operate

their branches in India. The RBI permits these banks to operate either through

branches; or through wholly-owned subsidiaries. The primary activity of most

foreign banks in India has been in the corporate segment. However, some of the

larger foreign banks have also made consumer financing a significant part of their

portfolios. These banks offer products such as automobile finance, home loans,

credit cards, household consumer finance etc. Foreign banks in India are required to

adhere to all banking regulations, including priority-sector lending norms as

17

applicable to domestic banks. In addition to the entry of the new private banks in the

mid- 90s, the increased presence of foreign banks in India has also contributed to

boosting competition in the banking sector.

1.4.1.1.2 Non-scheduled Banks:

“Non-scheduled Bank in India” means a banking company as defined in clause (c)

of section 5 of the Banking Regulation Act, 1949 (10 of 1949), which is not a

scheduled bank”.

1.4.1.2 Regional Bank:

Regional Banks are those banks that operate within a particular region. They have

numerous branches and automated teller machine (ATM) locations throughout a

multi-state area that provide banking services to individuals. Banks have become

more oriented toward marketing and sales. As a result, employees need to know

about all types of products and services offered by banks.

1.4.1.3 Co-operative Banks

Co-operative banks cater to the financing needs of agriculture, retail trade, small

industry and self-employed businessmen in urban, semi-urban and rural areas of

India. A distinctive feature of the co-operative credit structure in India is its

heterogeneity. The structure differs across urban and rural areas, across states and

loan maturities. Urban areas are served by urban cooperative banks (UCBs), whose

operations are either limited to one state or stretch across states. The rural co

operative banks comprise State co-operative banks, district central cooperative

banks, etc. The co-operative banking sector is the oldest segment of the Indian

banking system. The network of UCBs in India consisted of 1721 banks as at end-

March 2009, while the number of rural co-operative banks was 1119 as at end-

March 2008. Owing to their widespread geographical penetration, cooperative banks

have the potential to become an important instrument for large-scale financial

inclusion, provided they are financially strengthened. The RBI and the National

Bank for Agriculture and Rural Development (NABARD) have taken a number of

measures in recent years to improve financial soundness of co-operative banks.

18

1.5 Functions of Commercial Banks:

Commercial banks have to perform a variety of functions which are common to both

developed and developing countries. These are known as „General Banking‟

functions of the commercial banks. The modern banks perform a variety of

functions. These can be broadly divided into two categories: (a) Primary functions

and (b) Secondary functions.

1.5.1 Primary Functions

1.5.1.1 Acceptance of Deposits:

Accepting deposits is the primary function of a commercial bank. Banks mobilize

savings of the household sector. Banks generally accept three types of deposits viz.,

Current Deposits, Savings Deposits and Fixed Deposits.

1.5.1.1.1 Current Deposits:

These deposits are also known as demand deposits. These deposits can be

withdrawn at any time. Generally, no interest is allowed on current deposits, and in

case, the customer is required to leave a minimum balance undrawn with the bank.

Cheques are used to withdraw the amount. These deposits are kept by businessmen

and industrialists who receive and make large payments through banks. The bank

levies certain incidental charges on the customer for the services rendered by it.

1.5.1.1.2 Savings Deposits:

This is meant mainly for professional men and middle class people to help them

deposit their small savings. It can be opened without any introduction. Money can

be deposited at any time but the maximum cannot go beyond a certain limit. There is

a restriction on the amount that can be withdrawn at a particular time or during a

week. If the customer wishes to withdraw more than the specified amount at any one

time, he has to give prior notice. Interest is allowed on the credit balance of this

account. The rate of interest is greater than the rate of interest on the current deposits

and less than that on fixed deposit. This system greatly encourages the habit of thrift

or savings.

1.5.1.1.3 Fixed Deposits:

These deposits are also known as time deposits. These deposits cannot be withdrawn

before the expiry of the period for which they are deposited or without giving a prior

notice for withdrawal. If the depositor is in need of money, he has to borrow on the

security of this account and pay a slightly higher rate of interest to the bank. They

19

are attracted by the payment of interest which is usually higher for longer period.

Fixed deposits are liked by depositors both for their safety and as well as for their

interest. In India, they are accepted between three months and ten years.

1.5.1.2 Advancing Loans:

The second primary function of a commercial bank is to make loans and advances to

all types of persons, particularly to businessmen and entrepreneurs. Loans are made

against personal security, gold and silver, stocks of goods and other assets. The most

common way of lending is by:

1.5.1.2.1 Overdraft Facilities:

In this case, the depositor in a current account is allowed to draw over and above his

account up to a previously agreed limit. Suppose a businessman has only Rs.

50,000/- in his current account in a bank but requires Rs. 70,000/- to meet his

expenses. He may approach his bank and borrow the additional amount of Rs.

20,000/-. The bank allows the customer to overdraw his account through cheques.

The bank, however, charges interest only on the amount overdrawn from the

account. This type of loan is very popular with the Indian businessmen.

1.5.1.2.2 Cash Credit:

Under this account, the bank gives loans to the borrowers against certain security.

But the entire loan is not given at one particular time, instead the amount is credited

into his account in the bank; but under emergency cash will be given. The borrower

is required to pay interest only on the amount of credit availed to him. He will be

allowed to withdraw small sums of money according to his requirements through

cheques, but he cannot exceed the credit limit allowed to him. Besides, the bank can

also give specified loan to a person, for a firm against some collateral security. The

bank can recall such loans at its option.

1.5.1.2.3 Discounting Bills of Exchange:

This is another type of lending which is very popular with the modern banks. The

holder of a bill can get it discounted by the bank, when he is in need of money. After

deducting its commission, the bank pays the present price of the bill to the holder.

Such bills form good investment for a bank. They provide a very liquid asset which

can be quickly turned into cash. The commercial banks can rediscount the

discounted bills with the central banks when they are in need of money. These bills

20

are safe and secured bills. When the bill matures the bank can secure its payment

from the party which had accepted the bill.

1.5.1.2.4 Money at Call:

Bank also grant loans for a very short period, generally not exceeding 7 days to the

borrowers, usually dealers or brokers in stock exchange markets against collateral

securities like stock or equity shares, debentures, etc., offered by them. Such

advances are repayable immediately at short notice hence; they are described as

money at call or call money.

1.5.1.2.5 Term Loans:

Banks give term loans to traders, industrialists and now to agriculturists also against

some collateral securities. Term loans are so-called because their maturity period

varies between 1 to 10 years. Term loans; as such provide intermediate or working

capital funds to the borrowers. Sometimes, two or more banks may jointly provide

large term loans to the borrower against a common security. Such loans are called

participation loans or consortium finance.

1.5.1.2.6 Consumer Credit:

Banks also grant credit to households in a limited amount to buy some durable

consumer goods such as television sets, refrigerators, etc., or to meet some personal

needs like payment of hospital bills etc. Such consumer credit is made in a lump

sum and is repayable in installments in a short time. Under the 20-point program, the

scope of consumer credit has been extended to cover expenses on marriage, funeral

etc., as well.

1.5.1.2.7 Miscellaneous Advances:

Among other forms of bank advances there are packing credits given to exporters

for a short duration, export bills purchased/discounted, import finance-advances

against import bills, finance to the self employed, credit to the public sector, credit

to the cooperative sector and above all, credit to the weaker sections of the

community at concessional rates.

1.5.1.3 Creation of Credit:

A unique function of the bank is to create credit. Banks supply money to traders and

manufacturers. They also create or manufacture money. Bank deposits are regarded

as money. They are as good as cash. The reason is they can be used for the purchase

of goods and services and also in payment of debts. When a bank grants a loan to its

21

customer, it does not pay cash. It simply credits the account of the borrower. He can

withdraw the amount whenever he wants by a cheque. In this case, bank has created

a deposit without receiving cash. That is, banks are said to have created credit.

Sayers says “banks are not merely purveyors of money, but also in an important

sense, manufacturers of money.”

1.5.1.4 Promote the Use of Cheques:

The commercial banks render an important service by providing to their customers a

cheap medium of exchange like cheques. It is found much more convenient to settle

debts through cheques rather than through the use of cash. The cheque is the most

developed type of credit instrument in the money market.

1.5.1.5 Financing Internal and Foreign Trade:

The bank finances internal and foreign trade through discounting of exchange bills.

Sometimes, the bank gives short-term loans to traders on the security of commercial

papers. This discounting business greatly facilitates the movement of internal and

external trade.

1.5.1.6 Remittance of Funds:

Commercial banks, on account of their network of branches throughout the country,

also provide facilities to remit funds from one place to another for their customers

by issuing bank drafts, mail transfers or telegraphic transfers on nominal

commission charges. As compared to the postal money orders or other instruments,

bank drafts have proved to be a much cheaper mode of transferring money and have

helped the business community considerably.

1.5.2 Secondary Functions

1.5.2.1 Agency Services:

Banks also perform certain agency functions for and on behalf of their customers.

The agency services are of immense value to the people at large. The various agency

services rendered by banks are as follows:

1.5.2.1. Collection and Payment of Credit Instruments:

Banks collect and pay various credit instruments like cheques, bills of exchange,

promissory notes etc., on behalf of their customers.

1.5.2.2 Purchase and Sale of Securities:

Banks purchase and sell various securities like shares, stocks, bonds, debentures on

behalf of their customers.

22

1.5.2.3 Collection of Dividends on Shares:

Banks collect dividends and interest on shares and debentures of their customers and

credit them to their accounts.

1.5.2.4 Acts as Correspondent:

Sometimes banks act as representative and correspondents of their customers. They

get passports, traveler‟s tickets and even secure air and sea passages for their

customers.

1.5.2.5 Income-tax Consultancy:

Banks may also employ income tax experts to prepare income tax returns for their

customers and to help them to get refund of income tax.

1.5.2.6 Execution of Standing Orders:

Banks execute the standing instructions of their customers for making various

periodic payments. They pay subscriptions, rents, insurance premium etc., on behalf

of their customers.

1.5.2.7 Acts as Trustee and Executor:

Banks preserve the „Wills‟ of their customers and execute them after their death.

1.5.3 General Utility Services:

In addition to agency services, the modern banks provide many general utility

services for the community as given.

1.5.3.1 Locker Facility:

Bank provides locker facility to their customers. The customers can keep their

valuables, such as gold and silver ornaments, important documents; shares and

debentures in these lockers for safe custody.

1.5.3.2 Traveler’s Cheques and Credit Cards:

Banks issue traveler‟s cheques to help their customers to travel without the fear of

theft or loss of money. With this facility, the customers need not take the risk of

carrying cash with them during their travels.

1.5.3.3 Letter of Credit:

Letters of credit are issued by the banks to their customers certifying their credit

worthiness. Letters of credit are very useful in foreign trade.

23

1.5.3.4 Collection of Statistics:

Banks collect statistics giving important information relating to trade, commerce,

industries, money and banking. They also publish valuable journals and bulletins

containing articles on economic and financial matters.

1.5.3.5 Acting Referee:

Banks may act as referees with respect to the financial standing, business reputation

and respectability of customers.

1.5.3.6 Underwriting Securities:

Banks underwrite the shares and debentures issued by the Government, public or

private companies.

1.5.3.7 Gift Cheques:

Some banks issue cheques of various denominations to be used on auspicious

occasions.

1.5.3.8 Accepting Bills of Exchange on Behalf of Customers:

Sometimes, banks accept bills of exchange, internal as well as foreign, on behalf of

their customers. It enables customers to import goods.

1.5.3.9 Merchant Banking:

Some commercial banks have opened merchant banking divisions to provide

merchant banking services.

Generally, the commercial banks perform all the above discussed

functions. As the scope of banking expands, the modern commercial banks

provide several services to the business and society. These services can be

summarized as follows:

24

Table – 1.2

A Table Showing Banking Services and Products14

Role Services Products

Payment System

Constituent

A. Payment and

Remittance

- Cheque

- Pay order/ Bankers Cheque

- Demand draft

- Multi City Cheque (Anywhere

Banking)

- Electronic Fund Transfer (ETF)

- Debit Card

- Credit Card

- Charge Card

- Travel Card

B. Collection - Transfer

- Local Clearing

- ECS: Credit ECS, Debit ECS

- Cheque Collection

- National Clearing

- CMS-Cash Management Service

- Bill Collection

C. Forex - Foreign Exchange

Intermediary

D. Deposit - Current Accounts

- Savings Accounts

- Fixed Deposits

- Recurring Deposits

E. Loan - Retail Loans

Housing Loan

Mortgage Loan

Vehicle Loan

Consumer Durable Loan

Personal Loan

Loan Against Shares

Loan Against FD

Personal OD

Credit Cards (it is a hybrid

product and is predominantly a

payment product)

- Business Credit

Term Loans

Leasing

- Working Capital Facilities

Overdraft

Cash Credit

Packing Credit

Demand Loan

14 Gopinath, M.N. (2012), Banking Principles and Operations, Snow White Publications Pvt. Ltd.,

Mumbai, pp. 13-14

25

Intermediary

Business Card/Credit Card for

Business Transactions

- Trade Finance

Cheque Purchase

Bill Purchase

Bill Discount

Letter of Credit (LC)

Bill Negotiation

Guarantee

Financial

Services

F. Distribution - Mutual Funds

- Insurance Products

- Government Bonds

- Stamp Paper

- Gold Coins

- Mobile Recharge

- Share of Companies (Public

Issue)

G. Collection - Taxes

- Utility Bills

H. DeMAT - DeMAT Share Account

I. Safe Keeping - Safe Deposit Vault

- Safe Custody

J. Advisory - Investment Advice

26

1.6 Profile of Sampled Units:

In this research work, it is not possible to survey all the banks and all the

financial institutions. So, it is necessary to select a sample out of the universe. So,

the researcher has selected a sample of 6 nationalized banks for the study of NPAs.

A brief introduction of all the six sampled banks is presented here:

1.6.1 Bank of Baroda:

The Bank of Baroda is established as a result of foresight of Maharaja

Sayajirao Gaekwad. With his vision and enterprising nature, on 20th

July, 1908, the

Bank of Baroda was established. It was established under the Companies Act, 1897

with the paid up capital of Rs.10,00,000.

In the words of Maharaja Sayajirao Gaekwad, “A bank of this nature will

prove a beneficial agency for lending, transmission and deposit of money and will

be a powerful factor in the development of art, industries and commerce of the state

and adjoining territories”.

In the establishment of the Bank of Baroda, besides Maharaja Sayajirao,

other heroes had also played an important role. They were Sampatrao Gaekwad,

Ralph Whitenack, Vithaldas Thakersey, Tulsidas Kilachand and N.M. Chokshi.

Since its inception, the Bank of Baroda has achieved a remarkable growth involving

corporate wisdom, social pride and the vision of helping others grow, and growing

itself in turn.

Bank of Baroda is pioneer in various customer centric initiatives in the

Indian banking sector. Bank is one of the first in the industry to complete an all-

inclusive rebranding exercise along with customer centric initiatives. These

initiatives include specialized NRI branches, Gen-Next branches and Retail Loan

Factories/SME Loan Factories with an assembly line approach of processing loans

for speedy disbursal of loans.

The bank has made substantial progress in its end-to-end business and IT

strategy projects which cover the bank‟s domestic, overseas and subsidiary

operations. All the branches, extension counters in India, overseas business and five

sponsored Regional Rural Banks are on the Core Banking Solutions (CBS) platform.

The bank has wide network of ATMs across the country and has also launched

mobile ATMs in selected cities. For the corporate customers, the bank provides

27

facilities like direct salary upload, trade finance and State Tax payments etc. Bank

has introduced mobile banking (Baroda M-connect) and prepaid gift cards.

Vision:

It has been a long and eventful journey of almost a century across 25

countries. Starting in 1908 from a small building in Baroda to its new hi-rise and hi-

tech Baroda Corporate Centre in Mumbai is a saga of vision, enterprise, financial

prudence and corporate governance.

It is a story scripted in corporate wisdom and social pride. It is a story crafted

in private capital, princely patronage and state ownership. It is a story of ordinary

bankers and their extra ordinary contributions in the ascent of Bank of Baroda to the

formidable heights of corporate glory. It is a story that needs to be shared with all

those millions of people-customers, stake holders, employees and the public at

large- who in ample measure, have contributed to the making of an institution.

Mission:

To be a top ranking national bank of International Standards committed to

augmenting stake holders‟ value through concern, care and competence.

The Phase of Nationalization:

The Bank of Baroda was nationalized by an ordinance issued on 19th July,

1969 by the Central Government. Then, the bank is transformed into Government of

India undertaking and it carries all types of banking business including foreign

exchange. The ordinance was replaced by the Banking Companies (Acquisition and

Transfer of Undertaking) Act, 1969.

Key Financial Details:

Besides the historical background, it is important to state the financial

information of the bank. In this section, the researcher has presented important

financial details of the Bank of Baroda for the period of 10 years i.e. 2002-03 to

2011-12, to support the present research.

28

Table – 1.3

A Table Showing Key Financial Details of Bank of Baroda

No Particulars 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12

1

Paid up

Capital (Rs.

in Crores)

294.34 294.53 294.53 365.53 365.53 365.53 365.53 365.53 392.81 412.38

2 Reserves & Surplus (Rs.

in Crores)

4,92.63 4,836,40 5,333.23 7,478.91 8,284.41 10,678.40 12,514.20 14,740.86 20,650.73 27,064.47

3

Owned

Funds (Rs. in

Crores)

4,386.98 5,130.93 5,627.76 7,844.44 8,649.94 11,043.93 12,879.72 15,106.38 21,043.53 27,476.85

4 Spread (Rs. in Crores)

2,103.36 2,571.59 2,979.26 3,224.91 3,577.53 3,911.81 5,123.41 5,939.49 8,802.26 10,317.01

5

Gross NPAs

(Rs. in

Crores)

4,167.90 3,979.86 3,321.81 2390.14 2092.14 1,981.38 1,842.92 2,400.69 3,152.50 4,464.75

6

Net NPAs

(Rs. in

Crores)

1,700.28 1,761.02 619.64 518.04 501.67 493.55 451.15 602.32 790.88 1,543.64

7 Advances (Rs. in

Crores)

35,348.08 35,600.88 43,400.38 59,911.78 83,620.87 106,701.32 143,985.90 175,035.29 228,676.36 287,377.29

8

Assets

(Rs. in Crores)

76,424.58 85,108.66 94,664.23 113,392.53 143,146.17 179,599.52 226,672.24 278,316.70 358,397.18 447,321.47

9

Unsecured

Advances (Rs. in

Crores)

4,458.59 4,297.74 6,591.90 11,614.87 18,791.68 28,014.71 30,227.23 42,704.11 49,102.34 46,936.00

29

10

Gross NPAs

Recovered/Write-

off/Reduced

(Rs. in

Crores)

1,038.79 1,265.80 1,321.01 1,481.32 1,071.66 1,112.91 1,140.35 1,113.45 1,145.20 2,131.06

11

Operating

Profit (Rs.

in Crores)

1,716.63 2,485.29 2,312.81 2,031.86 2,415.00 3,028.55 4,305.01 4,935.26 6,981.61 8,580.62

12 Net Profit (Rs. in

Crores)

772.78 967.00 676.84 826.96 1,026.46 1,435.52 2,227.20 3,058.33 4,241.68 5,006.96

13 Number of Branches

2,753 2,693 2,738 2,743 2,772 2,899 2,972 3,148 3,418 3,959

14 Spread as %

to Assets 2.75 3.02 3.15 2.84 2.50 2.18 2.26 2.13 2.46 2.31

15 Net Profit Margin

#

10.50 12.13 9.77 10.76 10.22 10.38 12.86 15.37 17.17 15.12

16

Return on

Net Worth#

(In %)

18.81 20.32 12.58 10.54 11.86 12.99 17.35 20.24 20.15 18.22

17

Net Profit to

Total Fund#

(In %)

1.05 1.20 0.75 1.01 0.80 0.89 1.09 1.21 1.33 1.24

18 Net Profit to Total Assets

(In %)

1.01 1.14 0.71 0.73 0.72 0.80 0.98 1.10 1.18 1.12

(Source: Compiled from Annual Reports of the Bank and Performance Highlights of P.S.B. for the years 2002-03 to 2011-12, #www.moneycontrol.com)

30

1.6.2 Bank of India:

The Bank of India was established on 7th September, 1906 by a group of

eminent businessmen from Mumbai. This bank was under private ownership and

control till July 1969. It was nationalized along with 13 other banks.

At the time of its establishment, it had one office in Mumbai and 50

employees. It was started with a paid up capital of Rs.50,00,000. Since its inception,

the bank has made rapid growth over the years and has developed into a mighty

institution with a strong national presence and a large size international operation. In

terms of business volume, the bank occupies a premiere position among the

nationalized banks.

The bank has 4,467 branches in India in all the states and Union Territories

including specialized branches. These branches are controlled through 50 zonal

offices. The bank has 54 branches and 5 subsidiaries and 1 joint venture abroad.

The bank has been the first among the nationalized banks to establish a fully

computerized branch and ATM facilities at the Mahalakshmi Branch at Mumbai in

1989. The bank is also a founder member of SWIFT in India. It pioneered the

introduction of Health Code System in 1982 for evaluating or rating its credit

portfolio.

Vision:

To become the bank of choice for corporate, medium business and Up-

market Retail Customers and developmental banking for small business, mass

market and rural markets

Mission:

To provide superior, proactive banking service to niche markets globally,

while providing cost effective, responsive service to others in our role as a

development bank, and in doing so, meet the requirements of our stakeholders.


The Bank of India was nationalized by an ordinance issued on 19th July,

1969 by the Central Government. Then, the bank is transformed into Government of

India undertaking and it carries all types of banking business including foreign

exchange. The ordinance was replaced by the Banking Companies (Acquisition and

Transfer of Undertaking) Act, 1969.

31




financial details of the Bank of India for the period of 10 years i.e. 2002-03 to 2011-

12, to support the present research.

32

Table – 1.4

A Table Showing Key Financial Details of Bank of India

No Particulars 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12

1

Paid up

Capital (Rs. in Crores)

488.14 488.14 488.14 488.14 488.14 525.91 525.91 525.91 547.22 574.52

2

Reserves &

Surplus (Rs. in Crores)

3,052.64 3,521.52 3,976.73 4,495.75 5,407.23 10,063.48 12,969.01 13,704.08 16,743.46 20,387.27

3

Owned

Funds

(Rs. in Crores)

3,540.78 4,009.66 4,464.87 4,983.89 5,895.38 10,589.39 13,494.92 14,229.99 17,290.68 20,961.78

4 Spread (Rs.

in Crores) 2,036.20 2,201.43 2,236.89 2,631.98 3,440.46 4,229.27 5,498.90 5,755.95 7,810.69 8,313.43

5 Gross NPAs (Rs. in

Crores)

3,804.00 3,734.02 3,155.91 2,479.18 2,100.49 1,930.92 2,470.88 4,882.65 4,811.55 5,893.97

6

Net NPAs

(Rs. in Crores)

2,382.00 2,061.57 1,554,28 969.50 812.03 591.98 628.21 2,207.45 1,944.99 3,656.42

7

Advances

(Rs. in Crores)

42,633.18 45,855.90 55,528.89 65,173.74 85,115.89 1,13,476.33 1,42,909.37 1,68,490.71 2,13,096.18 2,48,833.34

8

Assets

(Rs. in

Crores)

76,294.21 84,860.00 94,978.18 1,12,274.27 1,41,816.99 1,78,829.98 2,25,501.77 2,74,966.46 3,51,172.55 3,84,535.47

9

Unsecured

Advances

(Rs. in

Crores)

9,229.66 8,286.53 10,552.10 11,428.15 14,792.05 26,180.75 32,396.15 36,982.23 50,361.01 52,404.13

33

10

Gross NPAs

Recovered/Write-

off/Reduced

(Rs. in

Crores)

1,144.00 1,274.05 1,334.64 1,385.92 1,325.61 1,534.84 1,559.77 1,749.89 2,979.48 4,318.82

11

Operating

Profit (Rs.

in Crores)

2,030.00 2,241.87 1,460.36 1,701.23 2,394.99 3,701.21 5,456.80 4,704.77 5,384.23 6,693.95


Crores)

851.00 1,008.32 340.05 701.44 1,123.17 2,009.40 3,007.35 1,741.07 2,488.71 2,677.52


2,559 2,562 2,617 2,625 2,747 2,905 3,048 3,236 3,490 4,000

14 Spread as %

to Assets 2.67 2.59 2.36 2.34 2.43 2.36 2.44 2.09 2.22 2.16


#

11.27 13.38 5.08 8.63 10.48 13.96 15.89 8.59 10.25 8.53

16

Return on

Net Worth#

(In %)

28.32 28.04 8.36 15.37 21.25 22.76 25.51 13.60 15.58 13.57

17

Net Profit to

Total Fund#

(In %)

1.17 1.25 0.38 0.68 0.89 1.26 1.50 0.70 0.80 0.73


(In %)

1.12 1.19 0.36 0.62 0.79 1.12 1.33 0.63 0.71 0.70

(Source: Compiled from Annual Reports of the Bank and Performance Highlights of P.S.B. for the years 2002-03 to 2011-12, # www.moneycontrol.com)

34

1.6.3 The Bank of Maharashtra:

The history of the Bank of Maharashtra began in 1936 in Pune. It was

registered on 16th September, 1935 and it commenced its operations on 8

th February,

1936 in Pune. It started its operation under the leadership of Prof. V.G. Kale. At the

time of its commencement it had only one office in Pune. Its second branch was

opened in 1938 at Fort, Bombay. The bank obtained the status of scheduled bank in

1944. Since that time, the journey of expansion of the bank continues. The bank

expended its operations to Andhra Pradesh with Hyderabad branch in 1949. The

bank entered into Goa with Panjim branch in 1963. The bank expanded to Madhya

Pradesh with Indore branch and entered in Gujarat with Baroda branch in 1966. At

the time of nationalization in 1969, the bank made entry in Delhi by opening

Karolbagh branch on 19th December, 1969. In 1985, the bank opened its 500

th

branch in Maharashtra at the hands of the then Prime Minister, Mrs. Indira Gandhi at

Nariman Point, Bombay. Its 1,000th branch was inaugurated at Indira Vasahat ,

Bibwewadi, Pune at the auspicious hands of Dr. S.D. Sharma, the honorable Vice

President of India.

In 2012, honorable Union Finance Minister Shri P. Chidambaram

inaugurated the bank‟s 1,624th branch at Rajgambiram on 25

th October, 2012. The

Bank of Maharashtra was awarded “Best Banker- Customer Friendliness” for 2012

by the Sunday Standard.

Vision:

To be a vibrant, forward looking, techno-savvy, customer centric bank

serving diverse sections of the society, enhancing shareholders‟ and employees‟

value while moving towards global presence.

Mission:

1. To ensure quick and efficient response to customer expectations.

2. To innovate products and services to cater to diverse sections of the society.

3. To adopt latest technology on a continuous basis.

4. To build proactive, professional and involved workforce.

5. To enhance the shareholders‟ wealth through best practices and corporate

governance.

6. To enter international arena through branch network.

35


The nationalization of the Bank of Maharashtra was done in first phase of

nationalization by an ordinance issued on 19th July, 1969 by the Central

Government. Then, the bank is transformed into Government of India undertaking

and it carries all types of banking business including foreign exchange. The

ordinance was replaced by the Banking Companies (Acquisition and Transfer of

Undertaking) Act, 1969.




financial details of the Bank of Maharashtra for the period of 10 years i.e. 2002-03

to 2011-12, to support the present research.

36

Table – 1.5

A Table Showing Key Financial Details of Bank of Maharashtra

No Particulars 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12

1

Paid up


330.52 430.52 430.52 430.52 430.52 430.52 430.52 430.52 1,069.71 1,177.59

2

Reserves &


649.75 1,005.01 1,111.90 1,141.62 1,311.37 1,350.98 2,086.67 2,427.89 2,901.21 3,545.07

3

Owned

Funds

(Rs. in Crores)

980.27 1,435.53 1,542.42 1,572.14 1,741,89 1,781.50 2,517.19 2,858.41 3,970.93 4,722.66

4 Spread (Rs.

in Crores) 676.311 771.73 881.66 846.57 1,094.20 1,228.79 1,256.52 1,296.25 1,968.40 2,517.09


Crores)

957.54 954.45 961.94 944.08 820.27 776.27 798.41 1,209.79 1,173.70 1,297.03

6

Net NPAs

(Rs. in Crores)

459.14 288.24 280.74 334.06 227.38 254.05 271.90 662.43 618.95 469.57

7

Advances

(Rs. in Crores)

9,508.14 11,731.51 13,061.64 16,469.73 22,919.38 29,285.81 34,290.77 40,314.70 46,880.77 56,059.76

8

Assets

(Rs. in

Crores)

24,904.63 32,212.97 32,884.84 31,214.51 39,009.47 48,150.91 59,030.35 71,055.79 76,442.22 88,017.39

9

Unsecured

Advances

(Rs. in

Crores)

2,362.23 3,992.69 3,255.97 4,078.77 4,650.33 7,010.20 6,941.88 9,020.24 12,133.47 10,602.33

37

10

Gross NPAs

Recovered/Write-

off/Reduced

(Rs. in

Crores)

216.33 223.91 215.22 292.38 432.93 306.12 336.42 464.34 735.24 752.55

11

Operating

Profit (Rs.

in Crores)

520.58 676.49 546.46 365.07 613.20 672.63 793.52 814.55 855.03 1,515.24


Crores)

222.02 304.55 177.12 50.79 271.84 328.39 375.17 439.58 330.39 430.83


1,232 1,276 1,291 1,300 1,345 1,375 1,421 1,453 1,536 1,589

14 Spread as %

to Assets 2.72 2.40 2.68 2.71 2.80 2.55 2.13 2.82 2.58 2.86


#

9.09 11.42 6.97 2.18 9.36 8.65 7.88 8.16 5.42 5.52

16

Return on

Net Worth#

(In %)

27.55 23.45 8.82 4.08 14.00 18.60 18.16 18.28 10.23 9.97

17

Net Profit to

Total Fund#

(In %)

0.96 0.97 0.40 0.20 0.65 0.75 0.68 0.68 0.24 0.52


(In %)

0.89 0.95 0.54 0.16 0.70 0.68 0.64 0.62 0.43 0.49

(Source: Compiled from Annual Reports of the Bank and Performance Highlights of P.S.B. for the years 2002-03 to 2011-12, # www.moneycontrol.com

38

1.6.4 Central Bank of India:

The Central Bank of India was established in 1911. It was the first Indian

commercial banks which was wholly owned and managed by Indians. It was

established as a result of the dream of Sir Sorabji Pochkhanawala. He was the

founder of the bank. Sir Pherozesha Mehta was the first chairman of this truly

Swadeshi Bank. In the words of Sir Sorabji Pochkhanawala, “Central Bank of India

is the property of the nation and the country‟s asset. Central Bank of India lives on

people‟s faith and regards itself as the people‟s own bank”.

Among the public sector banks, Central Bank of India can be truly described

as an All India Bank, due to its wide network. It is present in 27 out of 29 states and

also in 3 out of 7 UTs in India. It has 4,336 branches, 9 ARBs, 15 RABs and 26

extension counters along with satellite branches at various centers.

ICICI, IDBI, UTI, LIC, HDFC, etc. are major corporate clients of the Central

bank of India. This shows customers‟ confidence in the bank.

Vision:

To emerge as a strong, vibrant and proactive bank/financial super markets

and to positively contribute to the emerging needs of the economy through

consistent harmonization of human, financial and technological resources and

effective risk control systems.

Mission:

1. To transform the customer banking experience into a fruitful and enjoyable one.

2. To leverage technology for efficient and effective delivery of all banking services

3. To have bouquet of product and services tailor-made to meet customers

aspirations.

4. The pan-India spread of branches across all the state of the country will be

utilized to further the socio-economic objective of the government of India with

emphasize on financial inclusion.

39


The Central Bank of India was nationalized by an ordinance issued on 19th

July, 1969 by the Central Government. Then, the bank is transformed into

Government of India undertaking and it carries all types of banking business

including foreign exchange. The ordinance was replaced by the Banking Companies

(Acquisition and Transfer of Undertaking) Act, 1969.




financial details of the Central Bank of India for the period of 10 years i.e. 2002-03


40

Table – 1.6

A Table Showing Key Financial Details of Central Bank of India

No Particulars 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12

1

Paid up


1,124.14 1,124.14 1,124.14 1,124.14 1,124.14 1,204.14 1,321.14 1,771.14 2,021.14 2,353.12

2

Reserves &


1,299.82 1,850.39 2,141.07 2,317.82 2,665.68 4,738.62 5,090.91 5,921.11 6,826.58 10,098.41

3

Owned

Funds

(Rs. in Crores)

2,423.97 2,974.53 3,265.21 3,441.96 3,789.83 5,942.76 6,412.05 7,692.25 8,847.72 12,451.53

4 Spread (Rs.

in Crores) 1,897.43 2,122.19 2,374.95 2,380.07 2,474.42 2,223.07 2,228.47 2,545.29 5,325.34 5,168.64


Crores)

3,244.00 3,091.92 2,621.00 2,684.00 2,572.00 2,350.00 2,316.00 2,558.00 2,394.00 7,273.00

6

Net NPAs

(Rs. in Crores)

1,562.00 1,270.86 814.00 972.00 878.00 1,060.00 1,063.00 727.00 847.00 4,557.00

7

Advances

(Rs. in Crores)

22,251.75 22,804.11 27,277.32 37,483.48 51,795.47 72,997.43 85,883.20 1,05,383.49 1,29,725.41 1,47,512.85

8

Assets

(Rs. in

Crores)

57,105.16 63,345.35 68,595.89 74,681.04 93,008.08 1,23,955.79 1,47,655.22 1,82,671.62 2,09,757.33 2,29,799.74

9

Unsecured

Advances

(Rs. in

Crores)

1,330.80 853.59 3,448.07 5,875.23 10,019.32 20,446.46 19,194.13 18,629.60 24,822.83 36,924.30

41

10

Gross NPAs

Recovered/Write-

off/Reduced

(Rs. in

Crores)

831.00 946.00 1,110.00 669.00 919.00 887.00 907.00 891.00 1,473.00 1,970.00

11

Operating

Profit (Rs.

in Crores)

923.85 1,528.93 1,609.17 1,194.67 1,265.72 1,268.30 1,446.74 2,058.52 2,591.39 2,814.95


Crores)

305.52 618.11 357.41 257.42 498.01 550.16 571.24 1,058.23 1,252.41 533.04


3,117 3,130 3,153 3,129 3,194 3,308 3,518 3,577 3,728 4,011

14 Spread as %

to Assets 3.32 3.35 3.46 3.19 2.66 1.79 1.51 1.39 2.54 2.25


#

5.42 10.25 6.21 4.92 7.69 6.31 4.99 7.70 7.66 2.61

16

Return on

Net Worth#

(In %)

18.61 28.73 13.03 8.77 19.88 15.46 14.43 23.03 21.45 4.52

17

Net Profit to

Total Fund#

(In %)

0.56 1.04 0.46 0.36 0.60 0.51 0.43 0.65 0.64 0.24


(In %)

0.54 0.98 0.52 0.34 0.54 0.44 0.39 0.58 0.60 0.23


42

1.6.5 Dena Bank:

Dena Bank was founded on 26th May, 1938 by the family of Devkaran

Nanjee under the name Devkaran Nanjee Banking Company Ltd. It became public

limited company in December, 1939 and then the name was changed to Dena Bank

Limited.

Dena Bank was one among six public sector banks selected by the World

Bank for sanctioning a loan of Rs.72.30 crores for augmentation of Tier-II Capital

under Financial Sector Developmental Project in the year 1995. It was one of the

few banks to receive the World Bank loan for technological up-gradation and

training. Dena Bank introduced Tele-banking facility in selected metropolitan

centre.

Vision:

DENA BANK will emerge as the most preferred bank of customer choice in

its area of operations, by its reputation and performance.

Mission:

DENA BANK will provide its……..

Customers – premiere financial services of great value,

Staff – positive work environment and opportunity for growth and achievement,

Shareholders – superior financial returns,

Community – economic growth


In July, 1969, Dena Bank Limited along with 13 other major banks was

nationalized. It is now a public sector banks constituted under the Banking

Companies (Acquisition & Transfer of Undertakings) Act, 1970. Under the

provisions of the Banking Regulations Act, 1949 an addition to the business of

banking, the bank can undertake other business as specified in section 6 of the

Banking Regulation Act, 1949.




financial details of the Dena Bank for the period of 10 years i.e. 2002-03 to 2011-12,

to support the present research.

43

Table – 1.7

A Table Showing Key Financial Details of Dena Bank

No Particulars 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12

1

Paid up


206.82 206.82 286.82 286.82 286.82 286.82 286.82 286.82 333.39 350.06

2

Reserves &


791.60 848.39 816.92 1,052.42 1,209.58 1,513.84 1,883.67 2,314.87 3,322.54 4,127.27

3

Owned

Funds

(Rs. in Crores)

998.43 1,055.21 1,103.74 1,339.24 1,496.40 1,800.66 2,170.50 2,601.69 3,655.92 4,477.33

4 Spread (Rs.

in Crores) 568.11 592.27 686.60 722.67 855.36 892.91 1,064.42 1,100.02 1,763.36 2,101.00


Crores)

1,616.58 1,484.01 1,147.54 949.40 744.48 572.60 620.77 641.99 842.24 956.50

6

Net NPAs

(Rs. in Crores)

997.28 884.35 591.00 432.85 364.80 215.43 313.38 427.53 548.95 571.73

7

Advances

(Rs. in Crores)

8,435.60 9,411.79 11,308.59 14,231.24 18,303.39 23,023.98 28,877.96 35,462.44 44,828.05 56,692.34

8

Assets

(Rs. in

Crores)

20,161.96 22,160.24 24,028.58 26,545.33 31,450.65 38,641.73 48,460.51 57,586.58 70,838.42 87,387.92

9

Unsecured

Advances

(Rs. in

Crores)

632.73 697.41 1,446.12 2,557.30 3,904.75 5,052.11 5,236.52 7,210.53 8,252.41 9,820.76

44

10

Gross NPAs

Recovered/Write-

off/Reduced

(Rs. in

Crores)

672.98 591.32 600.24 532.11 738.68 587.89 627.54 608.71 558.44 607.93

11

Operating

Profit (Rs.

in Crores)

493.83 710.59 382.18 620.32 635.37 686.44 726.36 840.58 1,223.79 1,528.43


Crores)

114.19 230.50 61.00 72.99 201.56 359.79 422.66 511.25 611.63 803.14


1,135 1,135 1,123 1,122 1,037 1,062 1,184 1,223 1,291 1,342

14 Spread as %

to Assets 2.82 2.67 2.86 2.72 2.72 2.31 2.20 1.91 2.49 2.40


#

5.16 9.79 3.11 3.85 8.30 11.61 10.95 11.17 11.07 11.04

16

Return on

Net Worth#

(In %)

12.41 26.55 7.43 9.03 17.48 22.96 21.68 21.36 17.68 18.71

17

Net Profit to

Total Fund#

(In %)

0.59 1.13 0.31 0.37 0.70 1.03 0.98 0.97 0.96 1.02


(In %)

0.57 1.04 0.25 0.27 0.64 0.93 0.87 0.89 0.86 0.92


45

1.6.6 Punjab National Bank:

In Punjab, Rai Mool Raj of Arya Samaj had long cherished the idea that

Indians should have a national bank of their own. At the instance of Rai Mool Raj,

Lala Lajpat Rai sent round a circular to selected friends insisting on Indian Joint

Stock Bank as the first special step in constructive Swadeshi. Lala Harkrishan Lal

who had returned from England with the ideas regarding commerce and industry,

was eager to give them practical shape. On 23rd

May, 1894, the efforts were

materialized. The bank opened for business on 12th April, 1895. Lala Lajpat Rai was

the first to open an account with the bank which was housed in the building opposite

the Arya Samaj Mandir in Anarkali in Lahore.

The first branch outside Lahore was opened in Rawalpindi in 1900. The bank

made slow, but steady progress in the first decade of its existence. On 31st March,

1947 the bank officials decided to leave Lahore and transferred the registered office

of the bank to Delhi and permission for transfer was obtained from the Lahore High

Court on 28th June, 1947.

In 1951, the bank took over the assets and liabilities of Bharat Bank Limited

and became the second largest bank in the private sector. In 1962, it amalgamated

the Indo-Commercial Bank with it.

Since inception in 1895, Punjab National Bank has always been a “people‟s

bank” serving millions of people throughout the country and also had the proud

distinction of serving great national leaders like Sarvshri Jawahar Lal Nehru, Gobind

Ballabh Pant, Lal Bahadur Shastri, Rafi Ahmed Kidwai, Smt. Indira Gandhi etc.

With more than 119 years of strong existence, the bank is serving more than

82 million esteemed customers. It has over 6,000 branches including 5 overseas

branches, 6,460 ATMs, 5,047 Business Correspondents and 2,165 Ultra Small

Branches.

Vision:

To be a leading global bank with Pan Indian footprints and become a house

hold brand in the Indo-Gangetic Plains providing entire range of financial products

and services under one roof.

46

Mission:

“Banking for the unbanked”


The Punjab National Bank was also nationalized in the first phase of

nationalization in 1969 along with other 13 banks. It is now a public sector bank

constituted under the Banking Companies (Acquisition & Transfer of Undertakings)

Act, 1970. Under the provisions of the Banking Regulations Act, 1949 an addition to

the business of banking, the bank can undertake other business as specified in

section 6 of the Banking Regulation Act, 1949.

In the second phase of nationalization, on 15th April, 1980, 6 other banks

were also nationalized. The New Bank of India Limited was among them. Later in

1993, it was amalgamated with the Punjab National Bank. As a result, at present,

there are 19 nationalized banks in India.




financial details of the Punjab National Bank for the period of 10 years i.e. 2002-03


47

Table – 1.8

A Table Showing Key Financial Details of Punjab National Bank

No Particulars 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12

1

Paid up


265.30 265.30 315.30 315.30 315.30 315.30 315.30 315.30 316.81 339.18

2

Reserves &


3,767.69 4,746.50 7,846.00 9,061.06 10,120.16 12,003.04 14,338.33 17,407.62 21,191.75 24,477.89

3

Owned

Funds

(Rs. in Crores)

4,032.99 5,011.80 8,161.30 9,376.36 10,435.46 12,318.34 14,653.63 17,722.92 21,508.56 27,817.07

4 Spread (Rs.

in Crores) 3,123.71 3,624.70 4,006.74 4,666.76 5,213.23 5,534.16 6,831.91 8,522.89 11,807.34 13,414.44


Crores)

4,980.06 4,670.13 3,741.34 3,138.29 3,390.72 3,319.30 2,767.47 3,214.41 4,379.39 8,719.62

6

Net NPAs

(Rs. in Crores)

1,526.91 448.96 119.44 210.17 725.62 753.78 263.85 981.69 2,038.63 4,454.23

7

Advances

(Rs. in Crores)

40,228.12 47,224.72 60,412.75 74,627.37 96,596.52 1,19,501.57 1,54,702.99 1,86,601.21 2,42,106.67 2,93,774.76

8

Assets

(Rs. in

Crores)

86,221.80 1,02,331.74 1,26,241.28 1,45,267.39 1,62,422.50 1,99,020.36 2,46,918.62 2,96,632.78 3,78,325.24 4,58,194.00

9

Unsecured

Advances

(Rs. in

Crores)

2,851.91 4,737.49 9,008.59 11,125.24 14,126.27 20,100.47 21,480.25 19,821.59 29,987.05 24,661.25

48

10

Gross NPAs

Recovered/Write-

off/Reduced

(Rs. in

Crores)

706.21 1,354.38 1,647.43 1,505.87 1,808.83 2,024.61 2,245.69 2,130.63 3,171.72 2,331.41

11

Operating

Profit (Rs.

in Crores)

2,317.29 3,120.86 2,404.46 2,874.78 3,617.40 4,006.24 5,690.40 7,326.28 9,055.69 10,614.29


Crores)

842.20 1,108.69 1,410.12 1,439.31 1,540.08 2,048.76 3,090.88 3,905.36 4,433.50 4,884.20


4,037 4,022 4,043 4,066 4,119 4,267 4,668 5,002 5,166 5,669

14 Spread as %

to Assets 3.62 3.54 3.17 3.21 3.21 2.78 2.85 2.87 3.12 2.93


#

9.79 11.45 13.84 14.50 12.53 12.68 13.76 15.64 14.48 12.02

16

Return on

Net Worth#

(In %)

24.97 26.42 17.96 17.01 16.03 19.00 23.52 24.06 20.61 17.55

17

Net Profit to

Total Fund#

(In %)

1.06 1.18 1.24 1.06 1.00 1.14 1.40 1.45 1.32 1.17


(In %)

0.98 1.08 1.12 0.99 0.95 1.03 1.25 1.32 1.17 1.07

(Source: Compiled from Annual Reports of the Bank and IBA Bulletin for the years 2002-03 to 2011-12, # www.moneycontrol.com)

49

Reference:

Agrawal, O.P. (2011), Banking and Insurance, Himalaya Publishing House

Pvt. Ltd., New Delhi

Chellasamy, P. (2010), Modern Banking Management, Himalaya Publishing

House Pvt. Ltd., New Delhi

Desai, Vasant (2010), Bank Management, Himalaya Publishing House Pvt.

Ltd., New Delhi

Gopinath, M.N. (2012), Banking Principles and Operations, Snow White

Publications Pvt. Ltd., Mumbai

Iyengar, Vijayragavan (2009), Introduction to Banking, Excel Books, New

Delhi

Maniar, B.G. (2010), Legal Regulations of Banking, Saurashtra Universtiy,

Rajkot

Shah and Mehta (1987), Master Key to Practice and Law of Banking, Chetna

Book Depot, Bombay

Singh, Jagroop (2012), Indian Banking System, Kalyani Publishers,

Ludhiana

Vaish, M.C. (1991), Money, Banking, Trade and Public Finance, Wiley

Eastern Limited, New Delhi

www.bankofbaroda.com

www.bankofindia.com

www.bankofmaharashtra.in

www.centralbankofindia.co.in

www.denabank.com

www.iba.org.in

www.pnbindia.in

www.rbi.org.in

www.wikipedia.org

http://www.bankofbaroda.com/

http://www.bankofindia.com/

http://www.bankofmaharashtra.in/

http://www.centralbankofindia.co.in/

http://www.denabank.com/

http://www.iba.org.in/

http://www.rbi.org.in/

http://www.wikipedia.org/

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