There is a sea change in the Indian banking system over the last 150 years. There were only 96 banks with just Rs. 1,019 cr deposits and Rs. 424 cr of credit in 1947. Today, the deposits amount to Rs. 30,16,260 cr and credits Rs. 21,54,912 cr. In the past six eventful decades banks have played a commendable role in promoting savings and investments, helping the nation in its march towards economic independence. The growth is highly impressive. The decade of 1990s was a turning point for the Indian banking industry. It witnessed a complete transformation in the way banking was carried out in India. Recapitalizing a few weak Public Sector Banks (PSBs) and reviving the sick banks costs the exchequer thousands of crores of rupees.
The fact that the current market value of the capital is more than the cost is a matter of satisfaction. Accepting market realities and realising the need to raise the capital, to meet Basel II norms and growth, the government allowed dilution of stake in PSBs. The major participants of the Indian financial system are the commercial banks, Financial Institutions (FIs), encompassing term-lending institutions, investment institutions, specialized financial institutions and the state-level development banks, Non-Bank Financial Companies (NBFCs) and other market intermediaries such as the stock brokers and moneylenders. The commercial banks and certain variants of the NBFCs are among the oldest of the market participants. The FIs, on the other hand, are relatively new entities in the financial marketplace.
|
