Globalisation and liberalisation of the Indian economy, and the interest of foreign banks to expand in India through the inorganic route, have fuelled growth of the banking industry. India has a well-balanced mix of public and private sector banks. While public sector banks provide stability to the banking system in the country, private sector banks add the necessary dynamism to it.
India has a well-organised and regulated financial infrastructure. Several innovations have taken place to expand the reach of banking and to make the service delivery more convenient and affordable. These include the use of Bank Correspondent (BC) model and the advent of mobile banking.
The banking system in India is dominated by Scheduled Commercial Banks (SCBs) with a pan-India presence. As of March 2010, SCBs controlled most of the assets, with the rest being controlled by a large number of small cooperative credit institutions with a very limited geographic reach. Within SCBs, public sector banks accounted for 73.7 per cent of the assets and the rest was held by foreign banks and private sector banks. With an increasingly global footprint, the Indian banking industry has adopted certain global best practices such as International Financial Reporting Standards (IFRS) and Basel II. As of March 31, 2009, all commercial banks in India, excluding RRBs and local area banks, have become Basel II compliant.
India has now entered the era of online banking, e-commerce and m-commerce, which makes banking simple. Also, the use of ATMs and credit cards has increased tremendously in the last few years. There has been a major change in the products offered by banks, from a few standard credit and deposit products to a number of customised offerings to suit the requirements of various categories of customers.Sectoral Presentation (November 2010)
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