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The Banking System and Its Policies Essay

Banks are an integral part of the modern financial system, without which the economy cannot fully function. In addition, due to the magnitude of the influence of these organizations, they directly affect the daily life of every person, constantly participating in it. Most people in today’s high-tech world depend on banks and are receptive to even small policy changes. This paper aims to analyze the role of banks in everyday life and the impact of changing banking policies on personal decision-making.

These financial institutions are actively involved in the economy at various levels. However, one of the primary roles of banks is the position of an intermediary (Gobat, n.d.). They accept money from those who want to keep it safe, thus forming deposits, and give money to those who need it, creating a system of loans (Gobat, n.d.). Therefore, one of the most prominent roles of a bank for the average person is a money vault. This financial institution, in this context, can be a reliable safe that will keep existing funds protected, optionally even increasing them in volume by paying interest on deposits. On the other hand, a bank can be a source of loans in cases where a person does not have the opportunity to save up or is in an emergency.

Both of these roles are the most apparent manifestations of banking intermediary functions. However, in today’s world, people are much less likely to go directly to bank buildings with any specific deposit or loan request. Nevertheless, these changes do not reduce the volume of interaction with them. This is actively facilitated by the spread of modern technologies, such as bank cards and contactless payments. These funds allow people to make cashless payments, which is often much more convenient. However, these operations require an individual to constantly contact a bank since all non-cash transactions can only occur through money exchanges in the banking system. Thus, an additional role of banks in the daily life of a person is to maintain the financial system and ensure the smooth operation of all monetary transactions.

The latter factor strongly influences a person’s life, imposing a range of restrictions and financial policies that they must keep in mind. As a consequence, even small policy changes can have a significant impact on important life decisions. The simplest example would be a change in interest rates on loans issued by banks. People often turn to the credit system when they urgently need to acquire a large amount of money to implement a decision. For example, I might need to make a significant purchase that should serve as the basis for a future business. It can be acquiring a new computer or specialized hardware or software with which I plan to earn money. In such a case, an increase in the interest rate would mean a higher final payment on the loan, which I would not be able to afford, forcing me to postpone my plans temporarily. Simultaneously, the opposite situation is also possible – introducing certain credit concessions that can push a person to finally implement long-drawn strategies.

Thus, banks play a significant role in a person’s daily life, ensuring the safety of the financial system and serving as intermediaries in most monetary transactions. Thanks to the development of modern technologies, almost every adult, in one way or another, interacts with banks almost daily, for example, by making cashless payments. As a result, there is a need to monitor changes in banking financial policies closely since they can significantly affect both a person’s routine and their important life decisions.

Gobat, J. (n.d.). Banks: At the heart of the matter . International Monetary Fund. Web.

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Essays on Banking

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Some say money rules the world. We don't know if that's actually true, but we're pretty much sure that banks rule money. And the fact that anyone with a smartphone can make use of modern banking services while staying in bed proves this point of view quite persuasively. No wonder writing an analytical paper, case study or an essay on banking system is a frequent assignment for students who study economics, business, and finance.

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Essay On Bank

Essay on Bank

500+ words essay on bank.

Banks are an integral part of the modern economy. They play a major role in the economic growth and development of a country. The idea of banking evolved with the idea of money. In India, public sector banks (PSBs) have been working to provide banking services in urban and rural areas since 1970. These public sector banks account for nearly 70% of banking activity in India. With the help of this essay on banks, students will get to know the functions performed by banks and their importance for individuals and the country. To help students in improving their essay-writing skills, we have also compiled a list of CBSE Essays on different topics. By practising these essays, they can boost their writing skills and also score good marks on the English exam.

Meaning of Bank

Banks are mainly linked to depositing and lending money. In Indian society, moneylenders used to give money to people in ancient times. They charged a high rate of interest to people as there were no banks or banking systems available at that time. But, with the change in time, the banking system was introduced in India. Now, we have public sector banks and private banks.

A bank is a financial institution that deals with deposits, withdrawals and other related banking services. Bank receives money from those who want to save in the form of deposits, and it lends money to those who need it. A bank is a financial institution that works as an intermediary to accept deposits and channels those deposits into various lending activities. It does so through loans or capital markets. A bank establishes the connection between the customers who have capital surpluses and those with capital deficits. In India, all banks operate under the guidelines of the Reserve Bank of India, which is known as the banker’s bank.

Functions of Bank

Banking is the lifeline of the modern economy. It has played a very important role in the economic development of all the nations of the world. We can not think of modern commerce without banking. Banking is a business which seeks profits like any other business. The banking business mainly constitutes borrowing and lending as their basic functions. Now, banks are providing many other services to people, such as net banking, online shopping, mobile banking, granting loans and advances, short-term credit, pension payments, acting as a dealer in foreign currency etc. A common person can safely deposit their money in the banks.

How Important are Banks for Development?

Banks are the most important financial pillars. They play a vital role in the economic development of a country. The financing requirements of industries, trades, agriculture and other business are met with the help of banks. Therefore, if the banking system of a country becomes strong, then the development of the country will also be at a faster rate. In today’s economy, banks are not only dealing with money, but they are also contributing to the development of the nation. They play a crucial role in the disbursement of credit and the mobilisation of deposits to various sectors of the economy. Banks also represent the economic health of the country. The strength of a nation’s economy depends on the strength of the financial system, which depends on the banking system.

In India, banks play a crucial role in the social and economic growth of the country after independence. The banking sector in India accounts for more than half the assets of the financial sector. The Indian banks have shown much growth after the implementation of financial sector reforms.

Banks are the backbone of any country’s economy. They are responsible for running the economy and controlling the price of the markets. They perform various important functions. However, there are default NPAs, cases of corruption and security threat-related issues, but these can be resolved by implementing strict laws and rules by the government.

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Essay: The Indian Banking System

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In today’s changing world, organizations are going through rapid changes in every sphere. The rate of change has increased to the limits of our endurance. Individual employees all over the world are constantly conformed to new and more complex working environmental forces, demanding new level of knowledge, improved skills and better understanding. An enterprise success factors depends on many factors and amongst all those manpower i.e. human resources play a pivotal role. For efficient running operation of an organization proper management of human resources should be done and on that part HRM plays an important role. According to Likert, âEvery aspect of human activity is dogged on the basis of competence, motivation and general effectiveness of the organization. Of all the errands of management managing the human resource is the most important task because all depends upon how well it is done.â In India, though we appear to be rich in human resources, our industries run short of useful human resources. One of the reasons for the companyâs success is the highest level of customer satisfaction which has been maintained through providing the consistent performance and quality and that can be maintained only when the employees are highly efficient and skilled. Training is the corner stone of sound management; it is actively and intimately connected with all the personnel activities. It is an integral part of the whole management programme There is an ever present need for training because, it enables employees to develop and rise within the organization, and increase their âmarker valueâ earning power and job security. It enables management to resolve sources of friction to bring home to the employees the fact that the management is not divisible. It moulds the employeeâs attitudes and helps them to achieve a better co-operation with the company and a greater loyalty to it. The management is benefited in the sense that higher standards of quality are achieved; a satisfactory organizational structure is built up; authority can be delegated and stimulus for progress applied to employees. Ongoing development is today’s new form of job security. People need to learn continuously. By developing, stretching and continually challenging themselves, employees can build a skill base; reputation and a network of contacts which will make them fit to be always ’employable’ The expedition towards a knowledge economy demands the new additional type of competencies like team spirit, assistance, etc. To arrive at this in high productivity places like banks, the lifelong learning concept should be applied to its personnel. With the kind of reforms and the resulting changes that are currently overawing the Indian banks, the exigency to instill such competencies among the workforce is getting heaped on in the banking sector. 1.1 INDIAN BANKING SYSTEM: AN OVERVIEW 1.11 Introduction: Banking is as old as our civilization. The structure of banking varies widely from country to country. Often a countryâs banking structure is a consequence of the regulatory regime to which it is subjected. The banking system in India works under the constraints that go with social control and public ownership. Nationalization, for instance, was a structural change in the functioning of commercial banks which was considered essential to better serve the needs of development of the economy in conformity with national policy and objectives. Similarly to meet the major objectives of banking sector reforms, government stake was reduced to 51 percent in public sector banks. The general banking scenario in India has become very dynamic now-a-days. Before preliberalization era, the picture of Indian Banking was completely different as the Government of India initiated measures to play an active role in the economic life of the nation, and the Industrial Policy Resolution adopted by the government in 1948 envisaged a mixed economy. This resulted into greater involvement of the state in different segments of the economy including banking and finance. The Reserve Bank of India was nationalized on January 1, 1949 under the terms of the Reserve Bank of India (Transfer to Public Ownership) Act, 1948. In 1949, the Banking Regulation Act was enacted which empowered the Reserve Bank of India (RBI) “to regulate, control, and inspect the banks in India.” The Banking Regulation Act also provided that no new bank or branch of an existing bank could be opened without a license from the RBI, and no two banks could have common directors. By the 1960s, the Indian banking industry had become an important tool to facilitate the speed of development of the Indian economy. The Government of India issued an ordinance and nationalized the 14 largest commercial banks with effect from the midnight of July 19, 1969. A second dose of nationalization of 6 more commercial banks followed in 1980. The stated reason for the nationalization was to give the government more control of credit delivery. With the second dose of nationalization, the Government of India controlled around 91% of the banking business of India. Later on, in the year 1993, the government merged New Bank of India with Punjab National Bank. It was the only merger between nationalized banks and resulted in the reduction of the number of nationalized banks from 20 to 19. In the early 1990s, the then Narasimha Rao government embarked on a policy of liberalization, licensing a small number of private banks. These came to be known as New Generation tech-savvy banks, and included Global Trust Bank (the first of such new generation banks to be set up), which later amalgamated with Oriental Bank of Commerce, Axis Bank(earlier as UTI Bank), ICICI Bank and HDFC Bank. This move, along with the rapid growth in the economy of India, revitalized the banking sector in India, which has seen rapid growth with strong contribution from both sectors of banks, namely, private banks and public banks. 1.12 Evolution of Indian Banking: The Banking industry in India has grown in a specific kind of environment and with some defined objectives. Figure 1.1: Evolution of Indian Banking This historicity of this environment and the objectives has a strong bearing on the operations and management of present day. To appreciate any economic dimension of the banking industry in India in a proper perspective, understanding of the path of evolution of the industry is a must. The origin of banking industry may be tacked back to establishment of Bank of Bengal in Calcutta in 1786. Since then the industry has witnessed substantial growth and radical changes. As on March 2011, Indian banking industry consisted of the 234 Commercial Banks. The first bank in India, though conservative, was established in 1786. From then till today, the journey of Indian banking system can be classified into four distinct phases: Phase I: The General Bank of India was set up in 1786. Next came the Bank of Hindustan and Bengal Bank. The East India Company established Bank of Bengal (1809), Bank of Bombay (1840) and Bank of Madras (1843) as independent units and called them presidency Banks. These three banks were amalgamated in 1920 and the Imperial Bank of India, which started as private shareholders banks, was established with mostly European shareholders. In 1865, the Allahbad Bank was established, and, for the first time, exclusively by Indians, Punjab National Bank Ltd. was set up in 1894 with headquarters at Lahore. Between 1906 and 1923, Banks of India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank and Bank of Mysore were set up. The Reserve Bank of India (RBI) was established in 1935. During the first phase, the growth was very slow and banks also experienced periodic failures between 1923 and 1948. There were approximately 1100 banks, mostly small. As per the Reserve Bank India Act of 1934, the Reserve Bank of India (RBI) was constituted as an apex bank without major government ownership. To streamline the functioning and activities of commercial banks, the Government of India came up with the Banking Companies Act, 1949 which was later changed to Banking Regulation Act, 1949. As per the Banking Regulation (Amendment) Act of 1965 (Act No. 23 of 1965), RBI was vested with extensive powers for the supervision of banking in Indian as the Central Banking Authority. During those days, the public confidence in banks was somewhat low and, so, deposit mobilization was slow. Abreast of it the savings banks facility provided by the postal department was comparatively safer. Moreover, funds were largely given to traders. Phase II: The government took major steps in the Indian Banking Sector Reforms after independence. In 1955, it nationalized the Imperial Bank of India (the State Bank of India Act) with extensive banking facilities on a large scale, especially in rural and semi-urban areas as the first phase of nationalization. It formed the State Bank of India (SBI) to as the principal agent of RBI and to handle banking transactions of the Union and the State Governments of the Country. In 1969, seven subsidiary banks of the State Bank of India were nationalized as a major process of nationalization due to the effort of then Prime Minister Mrs. Indira Gandhi, Later in 1969, 14 Major Private Commercial Banks in the country were nationalized. The list of 14 banks nationalized in 1969 was; 1) Central Bank of India 2) Bank of Maharashtra 3) Dena Bank 4) Punjab National Bank 5) Syndicate Bank 6) Canara Bank 7) Indian Bank 8) Indian Overseas Bank 9) Bank of Baroda 10) Union Bank 11) Allahabad Bank 12) United Bank of India 13) UCO Bank 14) Bank of India The second phase of nationalization of Indian banks was carried out in 1980, with seven more banks being nationalized. This step brought 80 percent of the banking segment in India under government ownership The Government of India has taken the following steps to regulate banking institutions in the country: 1949: Enactment of Banking Regulation Act 1955: Nationalization of State Bank of India 1959: Nationalization of SBI subsidiaries 1961: Insurance cover extended to deposits 1969: Nationalization of 14 major banks 1971: Creation of Credit Guarantee Corporation 1975: Creation of regional rural banks 1980: Nationalization of seven more banks with deposits over Rs. 200 crore. After the nationalization of banks, the branches of the public sector banks in India rose to approximately 800 percent in deposits, and advances took a huge jump by 11,000 percent. Government ownership gave the public implicit faith and immense confidence in the sustainability of public sector banks. Phase III: The third phase of development of Indian banking introduced many more products and facilities in the banking sector in its reform measures. In 1991, under the chairmanship of Narasimha, a committee was set up under his name, which worked for the liberalization of banking practices. The country flooded with foreign banks and their ATM stations. Efforts are being put in to give a satisfactory service to customers. Phone banking and Net banking have been introduced. The entire system has become more convenient and swift. Today, time is given more importance than money. The financial system of India has shown a great deal of resilience. It is sheltered from any crisis triggered by any external macroeconomic shock as other East Asian countries suffered. This is all due to a flexible exchange rate regime, high foreign reserves, the not yet fully convertible capital account, and limited foreign exchange exposure to banks the their customers. Phase IV: The next stage for the Indian banking has been set up with the proposed relaxation in the norms for Foreign Direct Investment, where all Foreign Investors in banks may be given voting rights. The new policy shook the Banking sector in India completely. Bankers, till this time, were used to the 4-6-4 method (Borrow at 4%; Lend at 6%; Go home at 4%) of functioning. The new wave ushered in a modern outlook and tech-savvy methods of working for traditional banks. All this led to the retail boom in India. People not just demanded more from their banks but also received more. 1.13 Indian Banking: The Present Structure The Indian Banking industry, which is governed by the Banking Regulation Act of India, 1949, comprises a large number of commercial and cooperative banks, specialized developmental banks for industry, agriculture, external trade and housing, social security institutions, collective investment institutions, etc. The banking system is at the heart of the financial system. The Indian banking system has the RBI at the apex. It is the central bank of the country under which there are the commercial banks including public sector and private sector banks, foreign banks and local area banks. It also includes regional rural banks as well as cooperative banks. In India, the most important intermediaries in the banking system today are scheduled commercial banks, co-operative banks, development financial institutions (DFI) and non-bank financial companies. The large state owned and private sector banks that form part of the scheduled commercial banks are the most visible representatives of the banking system. While the scheduled commercial banks hold more that 80% of the banking systemâs assets, they represent a minority in term of numbers. The structure of the Indian banking system is given in figure Figure 1.3: Structure of Indian Banking System The industry is currently in a transition phase. On one hand, the Public Sector Banks, which are the mainstay of the Indian Banking system, are in the process of shedding their flab in terms of excessive manpower, excessive Non Performing Assets (NPAs) and excessive governmental equity, while on the other hand the Private Sector Banks are consolidating themselves through mergers and acquisitions. Public Sector Banks, which currently account for more than 78 percent of total banking industry assets are saddled with NPAs, falling revenues from traditional sources, lack of modern technology and a massive workforce while the Private Sector Banks are forging ahead and rewriting the traditional banking business model by way of their sheer innovation and service. The PSBs are of course currently working out challenging strategies even as 20 percent of their massive employee strength has dwindled in the wake of the successful Voluntary Retirement Schemes (VRS) schemes. The private players however cannot match the PSBâs great reach, great size and access to low cost deposits. Therefore one of the means for them to combat the PSBs has been through the merger and acquisition (M& A) route. Over the last few years, the industry has witnessed several such instances. For instance, HDFC Bankâs merger with Times Bank, ICICI Bankâs acquisition of ITC Classic, Anagram Finance and Bank of Madura, Centurion Bank, IndusInd Bank, Bank of Punjab, Vysya Bank are said to be on the lookout. The UTI bank- Global Trust Bank merger however opened a Pandoraâs box and brought about the realization that all was not well in the functioning of many of the Private Sector Banks Private Sector Banks have pioneered Internet Banking, Phone Banking and Mobile Banking, Debit Cards, Automatic Teller Machines (ATMs) and combined various other services and integrated them into the mainstream banking arena, while the PSBs are still grappling with disgruntled employees in the aftermath of successful VRS schemes. Also, following Indiaâs commitment to the WTO agreement in respect of the services sector, foreign banks, including both new and the existing ones, have been permitted to open up to 12 branches a year with effect from 1998-99 as against the earlier stipulation of 8 branches. 1.2 TRAINING AND DEVELOPMENT 1.21 Introduction: Man is the only creature that not only begins a new generation, but can take the advantage of the knowledge which has accumulated through the centuries. Human resource management is a process of bringing people and organizations together so that the goals of each are met. It is that part of the management process which is concerned with the management of human resources in an organization. It tries to secure the best from people by winning their whole hearted cooperation. In short, it may be defined, as the art of procuring, developing and maintaining competent workforce to achieve the goals of an organization in an efficient and effective manner. In other words, it can be said that human resource management is concerned with people at work and their relationships with each other. 1.22 History of Training History of training is as old as man himself. It is generally thought that human beings began amassing knowledge at the beginning of the Stone Age. As the invented tools, weapons, clothing, shelter and language, the need for training became an essential ingredient in the march of civilization. Training and Development got a tremendous movement during 1970âs and 1980âs.training for learning is now changed and it is now called as T&D. Now it is not limited to learning technical skills and knowledge acquiring but its horizons cover the behavioral skills, attitudinal development, value formation, increasing job motivation, etc,. Training now a day has started becoming professionalized and with it come the systematic body of knowledge, skills, and attitude for development of human beings. Thus, history of training is as old as man and civilization but it has changed its form according to the need of the hour and society. 1.23 Concept of Training and Development Training is the base for personnel mgmt. If we expect the performance of high level from our employees we must train them. Changes take place in technology and mgmt every day. Therefore, it becomes necessary that the workers and employees of the enterprise must be trained so that they discharge their duties easily and effectively and may adjust with the changed circumstances. Training could be compared to this metaphor – if I miss one meal in a day, then I will starve to death. The survival of the organization requires development throughout the ranks in order to survive, while training makes the organization more effective and efficient in its day-to-day operations. Training involves an expert working with learners to transfer to them certain areas of knowledge or skills to improve in their current jobs. Development is a broad, ongoing multi-faceted set of activities (training activities among them) to bring someone or an organization up to another threshold of performance, often to perform some job or new role in the future. The analysis of gaps in knowledge and skills identifies what employees will need to learn in order to be fully competent in the jobs they will be doing now and in the future. How these gaps are filled may involve training. Training is usually considered as âthe organized procedure by which people gain knowledge and skill for a definite purpose.â Training is: a) Act of increasing the knowledge and skills of an employee for a particular job. b) Process by which the attitudes, skills and abilities of employees to perform specific jobs are increased. Training and Development can facilitate smooth adjustment to various changes by imparting new knowledge, new skills or by installing new attitudes, values, motives and other personality traits. It is erroneous on the part of the management to assume that only new employees or employees with poor performance only need training. Training is one of the management function which is applicable to all new and old employees, effective or ineffective employees. Thus training bridges the differences between job requirements and employee’s present specifications. Employee training and development is an attempt to improve current or future performance of an employee to perform through learning, usually by changing the employee’s attitudes or increasing his or her skills and knowledge. In organisational terms, it is intended to equip persons for earning promotion and holding greater responsibility. Training a person for a bigger and higher job is development. And this may well include not only imparting specific skills and knowledge but also inculcating some personality and mental attitudes. A major purpose of training and development is to remove performance deficiencies, whether current or anticipated inability of an employee to perform at the desired level. Training to improve performance is important to organisations which are rapidly incorporating new technologies to make the current work force more flexible and adaptable. Many organizations have already shifted their thinking about the training function. They have seen for themselves that training is where skills are developed, attitudes are changed, ideas evolve and the organization is reinvented. In the course of learning the skills that will increase sales, build effective teams, improve qualify, standards or meet a wide range of other objectives, employees create a new organizational culture. Also the need to look at business beyond the national boundaries and thinking strategically have forced many organizations to accord training and development due attention. For instance, the continued dominance of free market worldwide had forced many organizations to seriously examine international opportunities and face competitions in areas where they had no solid technological base. As a result, organizations have to continue to deal with two urgent challenges. The first is to improve their competitive position by reducing costs and the second is to learn how to manage the impact of technological development. This reality according to Goldstein and Gillian (1990); and Zager (1988), has magnified the importance of successful training and development programs with measurable results. Consequently training and development has become one of the most critical aspects of human resource management effectiveness. No matter the way one looks at training and development, they help employees to learn how to use the resources in an approved fashion that allows the organization to reach its desired output. Able people may grow to a point where they are ready for responsibilities beyond their initial assignment. When this happens, training and development become imperative. Training and development has grown concerned not only with helping individuals to adequately fill their positions, but also with helping whole organizations and sub departments grow and develop. Training and development, though primarily concerned with people, is also concerned with technology, the precise way an organization does business. That technology might be the way a flight attendant greets a passenger on an airliner, or the way an egg is fried, it might be the recipe that makes one soft drink, distinctly different from all other soft drinks. It might be the design that makes one automobile more attractive or more efficient than its competitors. It might include the procedures for mixing and bottling the drink, or for assembling the automobile. Training is concerned with the meeting between two inputs to organizational effectiveness, that is, people and technology. Since an organization can rarely secure people who are at the time of employment, total masters of their unique requirements, organizations need a good training and development programme. Training changes uninformed employees to informed employee; training changes unskilled or semiskilled workers in to employees who can do their assigned tasks in the way the organization wants them done into workers who do things the right way. 1.24 Difference between Training and Development Employee training is different from management development or executive development. “While the former refers to training given to employees in the operational, technical and allied areas, the latter refers to developing an employee in the areas of principles, and techniques of management, administration, organization and allied ones. Training is a process of learning a sequence of programmed behaviour. It is an application of knowledge. It gives people an awareness of the rules and procedures to guide their behaviour. It attempts to improve their performance on the current job or prepare them for an intended job, Development is a related process. It covers not only those activities which improve job performance but also those which bring about growth of the personality; it helps individuals in the progress towards maturity and actualization of their potential capacities so that they become not only good employees but better men and women. In organisational terms, it is intended to equip persons for earning promotion and holding greater responsibility. Training a person for a bigger and higher job is development. And this may well include not only imparting specific skills and knowledge but also inculcating some personality and mental attitudes. With technology creating more deskilled workers and with industrial workers being replaced by knowledge workers, training and development is at the forefront of HRD. The onus is now on the human development department to take a proactive leadership role in responding to training and business needs. 1.25 Training and Education Training and education are both different facets of learning. Training is concerned with increasing the technical skills and knowledge and operating skills in doing a particular job. Hence, mostly employers train their employees for a particular job. But the scope of education is broader. It includes acquiring not only technical skills and knowledge, but also behavioral skills and knowledge, genera1 knowledge, social knowledge and the like. Thus, the purpose of education is to develop individuals. It is concerned with the changing environmental, political and social developments. Education is not only through formal instruction in the educational institutes, but also through training, observation, awareness and so on and so forth. âTraining normally has got a more immediate and specific purpose whereas education has long run and general utility.âAccording to Dale Yoder “The use of-the terms training and development in today’s employment setting is far more appropriate than training alone since human resource can exert their full potential only when the learning process goes far beyond simple routine. The difference between training and education is as under: Table 1.1: Difference between Training and Education Area Training Education 1. Orientation Application Theoretical, Conceptual 2. Learning On the job and off the job Classroom 3. Scope Specific task General concept 4. Emphasis Technical Technical and general 1.26 Training Policy A policy is a framework for decision making. It is usually established by tap management to guide the decisions of others. Effective implementation of training strategy requires an efficient top management supported training policy. “Training policy is considered as the training vision of the organization which helps to draw short term and long term training strategy for achieving organizational objectives through training intervention.â Training policy helps in drawing the training roadmap keeping in view the resources, constraints and dynamics of internal and external organizational factors. “Training policy addresses many key issues like whom to train, when to train, how to train and also the roles and responsibilities of various stakeholders. Some of the characteristics of a training policy are: a) Based on careful analysis of organizational needs, best practice and relevant laws b) Formally written down as a basis for future decisions c) Communicated to all emp1oyees to guide decision making d) Supported by operating procedures and e) Part of an internally consistent framework Usually a training policy of an organization will have the following elements: a) The organization’s underlying philosophy/ beliefs about the value of training b) Who is eligible for training? c) What is the process for identifying training needs? d) What types of trainings are available? e) Who will decide whether a specific training proposal is covered and to what extent? f) What should be the balance between on-the-job and off-job training and between the use of internal and external resources? g) What forms of learning / learning outcomes are favored? h) Whether employees can appeal against decisions affecting their training? It is important that in a service industry like banking, suitable training policies are developed for the better functioning of the system. Human Resource Development is the most important need for a service industry like banking. The banks continued, until recently, their generalist orientation in the matter of recruitment. But, the best talent especially specialist, could not be attracted. While radical changes in the staffâ structure are not easy, Public Sector Banks can effect improvements in the existing practices of recruitment, training and redeployment. The focus must shift from generalist orientation of the staff to specialist orientation. “It has been observed that, in most of the banks, either the training policy is not clearly formulated or, even if it is formulated, it has been kept as a historical document which is rarely referred to while implementing training strategyâ. Training policy should have a shared vision of all the stakeholders and should be communicated to all concerned. 1.27 Training Objectives The success of any organization inevitably depends very largely on the staff it employs. It is necessary to ensure an adequate supply of staff that is technically and socially competent and capable of career advancement in to specialist departments or management positions. There is, therefore a continuous need for the process of staff development and training fulfils an important part of this process. The purpose of training is to improve knowledge, skills and attitude. It can increase confidence, motivation and job satisfaction. It can provide recognition. enhance responsibility, and possibility of increased pay and promotion. It can give a feeling of personal achievement and broaden opportunities for career progression. Training helps to improve the quality of human assets at the disposal of the organizations. Training is therefore a key element of improved organizational performance. 1.28 Benefits of Training The benefits of training can be summed up as: a) Improves morale of employees- Training helps the employee to get job security and job satisfaction. The more satisfied the employee is and the greater is his morale, the more he will contribute to organizational success and the lesser will be employee absenteeism and turnover. b) Less supervision- A well trained employee will be well acquainted with the job and will need less of supervision. Thus, there will be less wastage of time and efforts. c) Fewer accidents- Errors are likely to occur if the employees lack knowledge and skills required for doing a particular job. The more trained an employee is, the less are the chances of committing accidents in job and the more proficient the employee becomes. d) Chances of promotion- Employees acquire skills and efficiency during training. They become more eligible for promotion. They become an asset for the organization. e) Increased productivity- Training improves efficiency and productivity of employees. Well trained employees show both quantity and quality performance. There is less wastage of time, money and resources if employees are properly trained. 1.3 TRAINING NEED ASSESSMENT 1.31 Need: Needs are simply the differences between the current achievements and the desired accomplishments Thus, needs most commonly represent discrepanciesâ”often deï¬citsâ”between our ambitions and the results of our current performance. Figure 1.4: Relating Needs to Discrepancies between What Is (Current Results) and What Should Be (Desired Results) (Source: Based on Kaufman, Oakley-Brown, Watkins, and Leigh (2003) and Watkins (2007). In the same way, needs signify an over abundance of success when our current achievements surpass our desired accomplishments, thereby possibly suggesting an excess of resources going toward the results. 1.32 Need Assessment A needs assessment is simply a tool for making better decisions. From choosing a new car or ï¬nding a house to call home, or determining when training will build institutional capacity, needs assessments are used to make informed personal and professional decisions. Roger Kaufman, professor emeritus at Florida State University, deï¬nes a needs assessment in terms of gaps in results (Kaufman, Oakley-Brown, Watkins, and Leigh 2003). From a performance perspective, this deï¬nition offers two useful formulas for assessing needs. In the ï¬rst formula, needs are gaps between current results and desired results. The size and importance of the gaps can then be compared to inform the decisions. Kaufmanâs deï¬nition also provides a second formula for prioritizing needs. According to the deï¬nition, needs are prioritized through the comparison of (a) costs associated with addressing the needs (or closing the gap)and (b) costs associated with not addressing the needs (or leaving the gap). This comparison is the foundation for moving beyond merely identifying problems or opportunities, thereby offering an approach for using information about the needs so as to make decisions about what to do next. The ultimate aim of the need analysis is to establish: a) What needs actually exist b) Whether they are important c) How the need become apparent d) How they were defined e) How they may best be addressed and f) What the priorities are. If there is a variance between the desired and actual levels, a needs assessment explores the causes responsible for the gap and methods for closing the gap. 1.33 Training Need Assessment Meeting the many requirements of clients, fellow associates and society has become a requirement for organizational success (Popcorn, 1991; Kaufman, 1998). In response of this increasing demand of both internal and external clients âneed assessmentsâ have become a mainstay in organizational management of recent years. A Needs Assessment is a systematic exploration of the way things are and the way they should be. These âthingsâ are usually associated with organizational and/or individual performance (Stout, 1995). The assessment begins with a âneedâ which can be identified in several ways but is generally described as a gap between what is currently in place and what is needed now and in the future (Miller et al, 2002). A training need exists when there is a gap between what is required of a person to perform competently and what he actual knows. A âtraining needs assessmentâ, or âtraining needs analysisâ, is the method of determining if a training need exists and if it does, what training is required to fill the gap. The expectation of knowledge, skills and abilities of officials at different levels is different so there training needs are also different. The purpose of a training needs assessment is to identify performance requirements or needs within an organization in order to help direct resources to the areas of greatest need, those that closely relate to fulfilling the organizational goals and objectives, improving productivity and providing quality products and services. Training needs identification is the diagnostic part of the whole training process. Failure to conduct a sound analysis may result in wastage of efforts and training may not achieve its objectives. “The difference in the actual performance and desired performance [discrepancy] identifies the immediate and / or long range training needs. However, all performance issues are not training issues. Thus, if the problem or issues concern peopleâs behavior such as, knowledge, skill, attitude, technique and judgment, it is almost certain to be a training matter. 1.34 Why Conduct a Training Needs Assessment? A training need exists when there is a gap between what is required of a person to perform competently and what he actually knows. A âtraining needs assessmentâ, or âTraining Needs Analysisâ, is the method of determining if a training need exists and if it does, what training is required to fill the gap. The expectation of knowledge, skills and abilities of officials at different levels is different so their training needs are also different. Training Needs Assessment has therefore to be for different target groups for exactly knowing what training is required for each group. A Training Needs Assessment often reveals the need for well-targeted training (McArdle, 1998). Conducting an effective assessment ensures that training is the appropriate solution to a performance deficiency. Training Need Assessment is to identify the gap between the model situation and the actual situation and the way in which it can be bridged. As the gaps are identified, they are evaluated to determine the manner in which the gaps can be bridged. Some situations will indicate training needs. Some may need nonâ”training solutions (e.g., financial aspects, institutional strengthening, providing the right tools etc.). The results of training needs analysis will highlight the subject wise need to bridge the gap, to help in the preparation of training modules and facilitate in the development of Bank Employees. 1.35 Steps in Training Needs Assessment Good training needs assessment needs to be based upon a consistent and effective model that can be repeated and allowing the analyst, the freedom to produce solution focused on the business need. The following eight steps are suggested for effective training needs assessment by Tom Holden, a) Questioning the Business Case and Need, b) Deriving the Training Need, c) Meeting the Client. d) Planning the Training Needs Assessment [TNA], e) Gathering Data, f) Turning Data into Information, g) Presenting Your Solution and h) Completing Training Needs Assessment [TNA]. 1.36 Training Need Assessment Methods A key to any successful needs assessment project is the gathering of complete and accurate data and information regarding your target audience. There are seven basic assessment methods that can be used to gather data and information. a) Observation: A Needs Assessment can be an informal assessment based on observations. Observation means exactly what it sounds. It is a method of data collection based on watching a process or skill and systematically recording the events. For example, observing how clients use a workstation in the Information Center and keeping track of their requests for assistance with the product can be the first step to understanding what training would make the product easier to use. Patterns observed with particular user groups or when retrieving certain types of information can also point out training needs. b) Questionnaire: A questionnaire is a research instrument consisting of a series of questions and other prompts for the purpose of gathering information from respondents. Questionnaires are a survey instrument through which individuals respond to printed questions. c) Interviews: Interviews means one or more series of active interchanges between two or more people. They can be conducted either face to face or via technology. The main task in interviewing is to understand the meaning of what the interviewees say. (Kvale,1996) d) Peer Evaluation: Peer Evaluation is a process in which staff members use their own direct knowledge and experience to examine and judge the merit and value of another member in the organization. e) Job Analysis: Job analysis is the formal process of identifying the content of a job in terms activities involved and attributes needed to perform the work and identifies major job requirements.

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Digital Evolution in The Indian Banking System

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Essay on Banking

Banking is a very powerful instrument of social change. Banks are playing a crucial role in bridging the gap between the rich and the poor. In fact, banking is the backbone of the modern economy. It is difficult to visualize how trade, commerce or business can be conducted without an efficient banking system.

Banking had been in existence even in earliest times, though in other forms. In India, as in other countries, there were money-lenders who charged very heavy rates of interest. The money lenders did not have the welfare of the people at heart.

They only wanted to fill their own pockets and never missed an opportunity to exploit the poor and the needy. There was nobody to check these malpractices. People condemned the money lenders, but they could not do much. They felt helpless once they were caught in the vicious net of the money-lender.

The modern banking system has no scope for this kind of exploitation Before nationalisation, banks were catering to the needs of only a small section of people belonging to the upper strata of society. In rural areas, the needy until quite recently had no choice but to go to the money lender and take loans on his terms. So the benefits of modern banking did not reach the poor.

With a view to bringing commercial banks into the mainstream of economic development with definite social obligations and objectives, the Government acquired the control and ownership of 14 major banks in the country in July 1969.

Six more banks were nationalised in April 1980 Some of the objectives of the public sector banks were: (a) to mobilise savings of people to the largest possible extent and utilise these for productive purposes, (b) legitimate credit needs of the private sector, (c) to acutely foster opportunities for helping neglected and backward areas of the country, (d) curb, use of bank credit for speculative and unproductive purposes.

The philosophy behind nationalisation of banks was that they should function as an instrument for promoting economic and social development in more purposive manner. As against 8262 branches at the end of June 1969, the number of branches at the end of 1992 was more than 60,000.

The thrust of expansion policy has improved the availability of banking facilities in rural areas. They have started extending loans at concessional rates of interest to small farmers, entrepreneurs, artisans, labourers and members of ST and SC. Lead Bank scheme was also introduced in 1969.

Unfortunately, the expectations of the policy makers and the people have not been fulfilled. Since the nationalisation of banks, there has been a slow deterioration in their services.

The banking staff has become ineffi cient, callous and indifferent to the public. Political interference has also adversely affected the working of the banks. Writing off of the loans for political gain, has put the banking services off the rails.

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Essay on Internet Banking

In this essay we will discuss about Internet Banking. After reading this essay you will learn about: 1. Meaning of Internet Banking 2. Objectives and Drivers of Internet Banking 3. Trends in India 4. Facilities Available 5. Emerging Challenges 6. Main Concerns 7. Strategies to be Adopted by Indian Banks.

Essay on the Strategies to be Adopted by Indian Banks for Introducing Internet Banking

Essay # 1. Meaning of Internet Banking :

With the growth of internet and wireless communication technologies, telecommunications etc. in recent years, the structure and nature of banking and financial services have gone for a sea change. Internet banking or e-banking is the latest in this series of technological wonders in the recent past which involves use of internet for delivery of banking products and services.

Even the Morgan Stanley Dean Witter Internet Research emphasised that web is more important for retail financial services than that for many other industries. Internet banking or e-banking is changing the banking and its structure and is having major effects on banking relationships.

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Banking activity is now no longer confined to the branches where a customer has to approach the branch in person, for withdrawing cash or deposit a cheque or request for a statement of Accounts.

In accessing a true internet banking, any inquiry or transaction is processed online without any reference to the branch (anywhere banking) at any time. Thus providing Internet banking is gradually becoming a “need to have” than a “nice to have” service.

The net banking is, therefore, more of a norm rather than an exception in many developed countries because it is the cheapest way of providing banking services. Under this system, online banking is possible where every bank customer is provided with a personal identification number (PIN) for making online transactions with the bank through internet connections.

Internet banking or e-banking falls into four main categories, from Level 1—minimum functionality sites that offer only access to deposit account data—to level 4 sites highly sophisticated offering, enabling integrated sales of additional products and access to other financial services—such as investment and insurance.

In other works, a successful internet banking solution offers:

1. Exceptional rates on savings, CDs and IRAs.

2. Checking Account with no monthly fee, free bill payment and rebates on ATM surcharges.

3. Credit card facilities with low rates.

4. Easy online applications for all accounts including personal loans and mortgages.

5. 24-hour account access.

6. Quality customary service with personal attention.

Essay # 2. Objectives and Drivers of Internet Banking :

The internet has developed level playing field and thereby afforded open access to customers in the global market-place. Internet banking is a cost-effective delivery channel for the modernized financial institutions.

In this system, consumers are embracing many benefits of e-banking. To have access to one’s accounts at any time and from any location through world wide web (www) is a convenient practice, which was unknown a short time ago.

Thus, a bank’s internet presence transforms from ‘brochure/ware’ status to ‘internet banking’ status once the bank goes through a technology integration effort so as to enable its customer to access information about his or her specific account details.

Following are the six primary objectives or drivers of internet banking:

1. To improve customer access.

2. To facilitate the offering of more services.

3. To increase customer loyalty.

4. To attract large number of customers.

5. To provide cost-effective services offered by competitors.

6. To reduce customer attrition.

Keeping objectives in mind, the internet banking facilities has been progressing at a rapid pace throughout the world.

Essay # 3. Trends of Internet Banking in India :

In India, initially a beginning was made in internet banking only in some big cities which was just in rudimentary stage. After getting initial success, the internet banking facility is gradually being expanded in all cities and towns to make the system popular.

The banking industry in India is also facing unprecedented competition from non-traditional banking institutions which are now a day’s offering banking and financial services over the Internet. The deregulation of the banking industry along with emergence of new technologies are enabling the new competitors in the banking sector to enter the financial services market quite efficiently and quickly.

Core or Anywhere Banking:

In order to support internet banking facilities another new concept of banking i.e., core or anywhere banking is introduced. Initially introduced by the foreign banks, the same concept in new increasingly adopted by public sector banks and also the private sector banks.

Under this concept of banking, bank customers who have an account with any select branch can easily operate his account from different designated branches on the bank spread throughout the country.

Under this system, a customer can avail cash withdrawal, cash deposit, transfer of funds, inter-city and intra-city transactions, collection of draft and cheques etc. facilities from any of such designated branches conveniently irrespective of its locations.

Core banking concept has improved the standard of the banking services with the help of modern technology. In present times, most of the public sector banks have already adopted this concept and started extending these facilities to its customers gradually by including more and more of its important branches under this category.

Progress of Internet Banking:

In India, internet banking is gradually being developed throughout the country.

As per the recent study it is observed that:

(a) A number of banks have already adopted internet banking and are offering varied kind of services through it,

(b) These internet sites generally offer only most of the basic services. Only 50 per cent are known as ‘entry level’ sites offering little more than company information’s and basic marketing materials and 10 per cent are offering ‘advanced transactions’ such as online funds transfer, transactions and cash management services etc.; and

(c) Most of the foreign and private banks in India are much advanced in terms of the number of sites and their level of development in terms of rendering advanced technology linked services to its customers. Recently, an authority of ICICI Bank observed, “Our Internet banking base has been growing at an exponential pace over the last few years. Currently around 78 per cent of the bank’s customer base is registered for Internet banking.”

Security Precautions :

In order to make their bank account safe, one should follow certain security precautions. Customer should never share personal information like PIN number, passwords etc. with anyone, including employees of the bank. It is important that documents that contain confidential information are safeguarded. PIN or password should be changed immediately and memorized before destroying the mailers.

Customers are also advised not to provide sensitive account-related information over unsecured e-mails or over the phone. He must take simple precautions like changing the ATM, PIN and online login and transaction passwords on a regular basis. It is also important to ensure that the logged in session is properly signed out.

Essay # 4. Facilities Available Under Internet Banking in India:

Following facilities are made available for customers under internet banking in India:

(i) Bill Payment Service:

Bill payment service is a utility service of internet banking. Accordingly, each bank has tie-ups with various utility companies, service providers, insurance companies across the country. Such tie-ups can facilitate online payment of bills of electricity, telephone, mobile phone, credit card, insurance premium bills etc.

In order to make online payment of bills, a simple one-time registration for each bills has to be made and a standing instruction has to be made to make online payment of recurring bills automatically. Most interestingly, the bank usually does not charge customers for such online bill payment.

(ii) Fund Transfer:

Internet banking has made provision for transfer of any amount of fund from one account to another of the same or any other bank. Accordingly, customers can send money anywhere in India. Once a customer logs in his account, he needs to mention the payee’s account number, his bank and the branch. The transfer will take place in a day or so, whereas in a traditional method it takes about three to four working days. ICICI Bank recently reported that its online bill payment and fund transfer facility have been most popular online services.

(iii) Credit Card Customers:

Internet banking provides the facility of credit card to its customers. With internet banking, customers can not only pay their credit card bills online but also gets a loan on their cards. Not just this, they can also apply for an additional card, request a credit line increase and in case the card is lost, one can report lost card online.

(iv) Railway Pass and Online Booking:

Through Internet banking facility to issue Railway pass is also available. Indian Railways has tied up with ICICI bank for this purpose and one can now make railway pass for local trains online. The pass can be delivered to the customer at his doorstep. Initially, the facility was limited to Mumbai, Thane, Nashik, Surat and Pune. The bank would just charge Rs 10 + 12.24 per cent of service tax. Moreover, online booking of e-tickets of Railways, Airlines etc. can also be made with some arrangement with banks through Internet banking.

(v) Investing through Internet Banking:

Through Internet banking, opening a fixed deposit account has become easier. A customer can now open an FD account online through funds transfer. Online banking can also be a great friend for lazy investors. Moreover, investors with interlinked de-mat account and bank account can easily trade in the stock market and the amount will be automatically debited from their respective bank accounts and the shares will be credited in their de-mat account.

Besides, some banks provide its customers the facility to purchase mutual funds directly from the online banking system. Nowadays, most leading banks offer both online banking and de-mat account facilities. However, if a customer is having his de-mat account with independent share brokers, then he needs to sign a special form, which will link his two accounts.

(vi) Recharging Prepaid Phone:

Through Internet banking, recharging of prepaid phone has also become possible. It is no longer needed to rush to the vendor to recharge prepaid phones as and when talk time runs out. Here the customer just tops-up his prepaid mobile cards by logging in to Internet banking. By just selecting operator’s name, entering mobile number and the amount of recharge, the prepared phone of the customer is again back in action within few minutes.

(vii) Shopping at Fingertips:

Internet banking provides facility of shopping at fingertips. Leading banks have tied-up with various shopping websites. With a range of all kind of products. One can shop online and the payment is also made conveniently through his account. One can also buy railway and air tickets through Internet banking.

Essay # 5. Emerging Challenges of Internet Banking in India :

In India, a large sophisticated and highly competitive Internet Banking Market is gradually being developed with market pressure and is subjected to the following emerging challenges:

1. Demand side pressure due to increasing access to low cost electronic services.

2. Emergence of open standards for banking functionally.

3. Growing customer awareness and need for transparency.

4. Global players in the fray.

5. Close integration of bank services with web based E-commerce or even disintermediation of service through direct electronic payments (E-cash).

6. More convenient international transactions due to the fact that the Internet along the general deregulation trends, eliminate geographic boundaries.

7. Move from one stop shopping to ‘Banking Portfolio’, i.e., unbundled product purchases.

The Internet and its underlying technologies have been changing and transforming not just banking but all aspects of finance and commerce. It usually represents much more than a new distribution opportunity. Internet banking will also enable nimble players to leverage their traditional brick and mortar presence for improving customer satisfaction and gain share.

Essay # 6. Main Concerns in Internet Banking :

Internet banking in India has its areas of concern. In the mean time, a number of cases related to fraud and cheating of banks and customers by unscrupulous persons have already been lodged in India with this type of banking facilities. Irrespective of that attempts have been made by the RBI and the banking authorities for promoting safety and soundness of online and e-banking facilities in the country by issuing necessary guidelines.

In a recent survey conducted by the Online Banking Association, member institutions rated security as the most important issue of online banking. Thus there is a dual requirement to protect customers privacy and product against fraud.

Banking Securely:

Online Banking provides an overview of Internet Commerce and how one company can handle secure banking practices for its financial institution clients and their customers. Moreover, some basic information on the transmission of confidential data is presented in Security and Encryption on the web. In this respect, PC Magazine Online also offers a primer as to how encryption works.

Besides, a multi-layered security architecture comprising firewalls, filtering routers, encryption and digital certification ensures that customers account information is protected fully from un-authorised access in the following manner:

(i) Firewalls and filtering routers ensure that only the legitimate Internet users are usually allowed to access the system.

(ii) Encryption techniques used by the bank (including the sophisticated public key encryption) would ensure that privacy of data flowing between the browser and the Infinity system is protected.

(iii) Digital certification procedures provide the assurance that the data a customer receive is from the infinity system.

Essay # 7. Strategies to be Adopted by Indian Banks for Introducing Internet Banking :

In present times, Internet banking has no alternatives. Indian banking is gradually getting more and more access of Internet banking. Thus, Internet banking would drive us into an age of creative destruction due to non-physical exchange; complete transparency is also giving rise to perfectly electronic market place and customer supremacy.

At this moment, the question may be asked “what the Indian Banks should do under the present circumstances?” Whatever is the strategy chosen and options adopted, certain key parameters would largely determine the success of banks on web.

In order to attain long term success, in respect of Internet banking, a bank may follow:

(i) Adopting a webs mindset.

(ii) Catching on the first mover’s advantage.

(iii) Recognising the core competencies.

(iv) Enabling handling multiplicity with simplicity.

(v) Initiating senior management to transform the organisation from inward to outward looking.

(vi) Aligning roles and value propositions with customers segments.

(vii) Redesigning optimal channel port-folio.

(viii) Acquiring new capabilities through strategic alliances.

However, the above mentioned steps can be implemented by following four steps mentioned below:

(i) In the first phase, the customer be familiarized to new environment by demo version of software on banks, website. This will enable users to give suggestions for improvements, which can be incorporated in its later versions wherever possible.

(ii) The second phase provides various services such as account information and balances, statement of account, transaction tracking, mail box, check book issue, stop payment, financial and customized information.

(iii) The third phase may include additional multi-utility services like fund transfers, DD issue, standing instructions, opening fixed deposits and intimation of loss of ATM cards.

(iv) The final phase should include advanced corporate banking services like third party payments, utility bill payments, establishment of L/Cs, Cash Management Services etc. Enhanced plan for the customers in future may include requests for demand drafts and pay orders and many more to bring in the ultimate in banking convenience.

Thus by following the above mentioned strategies, it will help banks to translate their traditional business model into a Internet banking one, falling into the following three main categories:

(i) One-stop shop.

(ii) Virtual one stop shop.

(iii) Best of Breed Supplier.

Thus by following the above steps, the Indian bankers can pave the way for the successful introduction and popularizing the new concept of Internet banking on a large scale.

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Essay Writing on Role of technology in Banking Sector – RBI Grade B 2023

Write an argrumentative essay on “Role of technology in the banking sector and its impact on customers” for RBI Grade B 2023

The banking sector has undergone a significant transformation in recent years, thanks to the role of technology. Technology has revolutionized the banking industry by making it more efficient, secure, and accessible. This essay argues that the role of technology in the banking sector has had a positive impact on customers.

One of the most significant impacts of technology in the banking sector is the convenience it offers to customers. Customers can now access their bank accounts and conduct transactions from the comfort of their homes or offices, thanks to online and mobile banking. This has eliminated the need for customers to visit their bank branches, which can be time-consuming and inconvenient. Customers can now transfer funds, pay bills, and access account information with ease.

Technology has also made banking transactions more secure. With the implementation of measures such as two-factor authentication and biometric identification, customers can be sure that their transactions are safe and secure. This has reduced the incidence of fraud and made it more difficult for cybercriminals to steal customer information.

The role of technology in the banking sector has also increased the speed and efficiency of transactions. Automated teller machines (ATMs) and online banking have reduced the time it takes for customers to access their funds and conduct transactions. Customers can now withdraw cash, deposit cheques, and transfer funds quickly and easily.

Another significant impact of technology on customers is the access it has provided to banking services. Technology has made it possible for banks to offer their services to customers who previously did not have access to banking services. This has had a positive impact on financial inclusion, especially in developing countries.

In conclusion, the role of technology in the banking sector has had a positive impact on customers. It has made banking more convenient, secure, and accessible. Technology has also increased the speed and efficiency of transactions and contributed to financial inclusion. However, it is important for banks to ensure that they maintain the privacy and security of their customers’ information to ensure that technology continues to have a positive impact on customers.

Essay on Bank

Banks are financial institutions that deal in monetary transactions. Banks form an integral part of any society. There are numerous banks located in different parts of our country. While earlier there were limited number of banks with a few branches in big cities and towns in India, a number of new banks have opened in the last few decades with branches in every nook and corner of the country. Banks provide a lot of services based on the customer’s requirements. They provide locker facilities, safe deposits, ATM Services, Fixed Deposits, money transfer, loan for business and houses and several other monetary services to their customers.

Long and Short Essay on Bank in English

Here are essay on Bank in English of varied lengths to help you with the topic whenever you required.

After going through these Bank essay, your knowledge about banks, their functioning and their usefulness will enhance and you will emerge as a knowledgeable person.

These essays will prove useful in your school or college assignments, especially for students of commerce or banking.

You can select any bank essay of your choice given below:

Bank Essay 1 (200 words)

The banking system that involves accepting deposits and lending money initiated centuries back in various parts of the world. The system improvised over the time and the banks these days offer various other facilities in addition to the basic depositing and lending of money.

People are encouraged to keep their money in the banks because it is a safe and secure way to store the money. The money stored in the bank in the form of fixed deposits and recurring deposits also fetches a good amount of interest. In addition to money, one can also keep jewellery and important papers in the bank lockers.

Providing loans, which is another primary function of the banks, is also beneficial for individuals and businesses in many ways. Salaried people can build their assets such as property, car, etc easily with the help of loans from the bank. Businessmen can expand their businesses with this facility. A number of other services are also provided to the businessmen to ease their financial transactions and aid in the growth of their business.

Online Banking has further enhanced the process of banking. Various banking services such as checking balance, transferring amount, applying for loan are now provided on the bank’s website. All the customers require doing is opting for internet banking service.

Bank Essay 2 (300 words)

Introduction

Banking system has been in place since centuries. The system has been prevalent in India as well as other parts of the world. Only the services provided and the functions carried out have enhanced over the time.

History of Banks

Banking service began back in the 14 th century in some parts of Renaissance Italy. It was initiated on the lines of the concept of lending and borrowing that took place among people since the ancient era. In the ancient times, the merchants gave grain loans to the traders and farmers. This was called the barter system. Over the time the system evolved to accepting deposits and lending money.

The Fuggers, the Medicis, the Berenbergs, the Rothschilds are among some of the banking dynasties that are known to play a central role in the history of banking. They dominated this sector for centuries. Modern banking services such as issuance of banknotes and reserve banking started in the 17 th century. Bank of England and The Royal Bank of Scotland are some of the oldest banks in the world.

History of Banks in India

In India, the banking system dates back to the Vedic civilization. Loans were given to the needy in that era too only the nitty-gritty’s involved in the same were different. Loans deeds in that period were known by the name rnalekhya or rnapatra.

Big businessmen and landlords gave money to the small traders and farmers on interest in the earlier times. This culture is still prevalent in some villages in the country. The lands or other valuable assets of those who were unable to pay the amount were confiscated just as the banks do these days.

The first bank established in India was the Bank of Hindustan. It was opened in the year 1770 in Calcutta. Bank of Bombay, Bank of Calcutta and Bank of Madras were set up later in the early 19 th century.

There are numerous types of banks in every country to cater to the needs of different customers. They provide various services and aid in the growth of the country’s economy.

Bank Essay 3 (400 words)

A bank is an institution that accepts money deposits from the public and provides funds on credit to individuals as well as firms. These are the primary functions of a bank but not the only functions. They provide various other services to its customers such as locker facility, transfer of funds, issuance of drafts and portfolio management to name a few.

Importance of Banks

Banks are important for the individuals as well as the development of the country’s economy. Here is why these institutions are of importance:

Provides Safety and Security

Money kept at home is not safe. It is prone to burglary. When you keep your money in the bank, it is the bank’s responsibility to safeguard it. You do not have to worry about its security.

Encourages Saving Habits

Banks offer various schemes from time to time to encourage saving habits in people. The money put in the bank is not only saved but also grows. You have the option of withdrawing it any time you want.

Eases Trade and Commerce

Banks promote trade within the country by providing loans and advances to the traders. It also eases the process of trading between different countries. They provide easy money transaction options to smoothen the process. It is easy to send and receive funds from anywhere with the advancement in the banking system.

Promotes Agricultural Sector

Agricultural sector is an important part of the economy. There are special banks that provide loans to the farmers at low interest to promote agricultural activities. Banks thus aid in promoting the agricultural sector.

Aids in Development of Industries

Banks accept deposits from individuals and businesses and provide loads to the industries. They thus aid in the development of various industries in this way. The loan can be repaid in easy instalments.

Provides Employment Opportunities

Banks provide loans for the growth and development of the agricultural and industrial sectors. As these sectors expand, a number of employment opportunities are created for the public.

Banks are an important part of any country. The modern banking services have helped in easing the process of trade, development of industries and other activities that help in the development of the country’s economy. Banks and other financial institutions that promote the growth of businesses and safeguard the money and other valuable assets of individuals are certainly play an integral role in the development of a country’s economy.

Bank Essay 4 (500 words)

Banks play an important role in maintaining financial stability in the country. They offer numerous services to help you manage your finances better. These institutions thus form a vital part of any society.

Functions of Banks

The functions of banks have broadly been classified into two categories. These are the primary functions and the secondary functions. Here is a look at these in detail:

Primary Functions

Primary functions are the main functions of the banks. These include accepting deposits and providing loans. Here is a brief look at these functions:

Accepting Deposits

These deposits are basically of four different types:

Saving Deposits: These deposits encourage public to save money. The money can easily be withdrawn and deposited in the saving account without much restriction. The interest rate here is however quite low.

Current Deposits: This account is especially for the businessmen. These accounts offer facilities such as overdraft that are beneficial for the businesses. No interest is paid in this account.

Fixed Deposits: In a fixed deposit a considerable big amount is deposited in the account for a fixed period of time. The rate of interest is high in such deposits.

Recurring Deposits: A certain amount is deposited at regular intervals in such an account. The rate of interest is high. However, the amount cannot be withdrawn before a certain period.

Providing Loans

Here are the types of loans and advances offered by the banks:

Loans: Loans are offered for both short term and long term period. The rate of interest charged on the same varies based on the type and duration of loan. It can be repaid in instalments.

Cash Credits: The customers have the facility to take cash credit up to a certain amount which is fixed in advanced. A separate cash credit account needs to be maintained for this.

Overdraft: This facility is for businessmen. It is thus provided to the current account holders. They do not require maintaining a separate account to avail this facility.

Secondary Functions

Secondary functions, also known as non-banking functions, are of two types. These are agency functions and general utility functions. Here is a brief look at both these types of functions:

Agency Functions

The bank also acts as an agent for its customers. A number of agency functions are performed by this institution. These include collection of cheques, periodic payments, portfolio management, periodic collections and transfer of funds. Banks also act as executors, administrators, advisors and trustees for their customers. They help their customers deal with other institutions.

General Utility Functions

Banks also perform general utility functions that include providing locker facility, underwriting of shares, dealing in foreign exchange, issuance of drafts and letter of credits, drafting project reports, undertaking social welfare programmes such as public welfare campaigns and adult literacy programmes.

Discounting of bill of exchange is another service provided under this.

While initially the functions of banks only included accepting deposits and providing loans; they have started providing various other services now. All these facilities are aimed at helping the customers with their finances.

Bank Essay 5 (600 words)

Banks are financial institutions that lend money and accept deposits from general public. Banks maintain the flow of money in the country and are important for its economic growth. There are different types of banks that offer different kinds of services to individuals as well as businesses.

Types of Banks

Here are the various types of banks and their functions:

National Banks

Also known by the name, Central or Federal bank, these banks manage the financial system of the government. These non-profit making institutes serve as bankers to the other banks. There is one Central bank in every country. Some of the functions of National banks include supervising foreign exchange, controlling the country’s currency and issuance of paper currency. They do not deal with the general public.

Retail Banks

These are the most common types of banks. These are mainly set up to focus on the requirements of the general public. They open your savings account, provide credit cards, give loans and provide locker facility among other services.

Saving Banks

These are especially established to inculcate the habit of saving money among the people. The deposits from the customers are turned into securities and bonds in these banks. These were set up way back in the 18 th century in European countries. Besides, accepting deposits from individuals these banks offer various other services too.

Commercial Banks

The main aim of these banks is to aid the business class. They provide loans to the businessmen and also provide other services that are useful for the business men. Some of these services include bill of exchange, overdraft and cheque collection.

Investment Banks

These banks are also set up to aid the businesses. These banks help the businessmen establish a foothold in the financial markets. Investment banks facilitate those businessmen who require selling debt to the investors or want to go public with their business.

Land Mortgage Banks

Also known as agricultural banks or Land Development banks, these are mainly set up to aid the agricultural sector by financing it. These banks also play an important part in land development. The reason why this special category of banks has come into being is that there is a lot of risk in financing the agricultural sector and the commercial banks that support other businesses are not ready to take such risk.

Co-operative Banks

Co-operative banks provide loans to small-scale farmers, small-scale businesses and salaried people. They provide both commercial and retail services to people. These banks are registered under Co-operative Societies Act, 1912.

Consumer Banks

These banks have exclusively been set up to provide loan for purchasing durable consumer goods such as car, washing machine, refrigerator, furniture, etc. These banks give their consumers the leverage to repay loans in easy instalments. These are mostly found in first world countries.

Industrial Banks

Also known by the name Development Banks, these banks are established to aid the industrial sector. These banks accept cash by issuing shares and debentures. They provide long-term loan to the industries to help them expand and develop. Many such banks have been established in the country post independence.

Exchange Banks

These banks are particularly engaged in financing foreign trade. Some of the main functions of these banks include discounting foreign bills, purchasing and selling silver and gold and providing assistance in carrying out export and import trade.

Banks are established to ease the financial issues of the general public as well as the country as a whole. Different types of banks serve different purposes and have been set up to cater to the needs of various classes.

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EssayBanyan.com – Collections of Essay for Students of all Class in English

Essay on Bank

All of us have seen a bank and most probably have also visited them. But very few of us know about their types and all of their functions. I have brought these essays containing all the details about a bank and will also help you in wiring your essays.

Short and Long Essays on Bank in English

Essay on Bank for students of class 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11 and class 12 in English in 100, 150, 200, 250, 300, 500 words. Also find short Bank essay 10 lines.

Bank Essay 10 Lines (100 – 150 Words)

1) Banks are the place where people keep their money.

2) Works related to money like loans, transactions, etc are done in banks.

3) In 16 th to 19 th centuries, modern banks came into existence.

4) Banks keep our money, ornaments, important papers, etc safe.

5) The loan facility of banks provides great help to the people.

6) There are many government and private banks in India.

7) In India all the banks are controlled and managed by the Reserve Bank of India (RBI).

8) Banking sector employs a huge population.

9) The first bank of India was the Bank of Calcutta which was later named as State Bank of India.

10) Today internet and technology have made banking easier.

Essay 1 (250 Words) – Bank

Introduction

Banks are the places where we keep our money or do all our money-related work. Either it is getting a loan or something else. This type of place has been addressed as a bank. Although the word has various meanings, all of them mean the same. It is a place where you feel relaxed. When we are in pressure or have to solve some money-related problems we visit a bank.

How Banks Came into Existence

The existence of a bank was seen for the first time in Mesopotamia in 8000 BC. The evidence of bank and temples were seen in this civilization. These banks were not made for lending money because the money came afterword. These banks were made for lending seeds and agricultural stuff. They also used to keep records of trading.

Modern banking came into existence between the 17th to 19th centuries. It is said that Goldsmiths were the first bankers and they use to lend money to people and people use to keep their valuable things near goldsmiths.

The first-ever bank which offered bank noted was the Bank of England. It further developed and today we have well-established banks. We also have ATMs and Credit cards, etc. All these things have made banking easy.

Everything established in this world slowly. Either it was a man or a bank. Things develop and progress as per time. Today things seem so simple to us but they were not so simple and easy years before. A bank is one of the best examples which show development and change in society.

Essay 2 (400 Words) – Bank and Its Importance

Banks are denoted as one of the most important pillars of our economy. People keep their savings in these banks and this helps our nation to progress. Banks help people in various ways; they lend money for different work. Like if you have to buy a house, a car, even a laptop, banks give us money on certain interests and we can easily pay it in different instalments. Apart from this, there are many more uses of a bank.

Importance of Banks

Banks are important and useful in many ways and I have mentioned some of the most important uses below;

Provides Safety

We feel safe when we keep our money in a bank. Not only money people also keep other valuable things in banks like ornaments, important papers, etc. They provide overall security and many of our parents really feel thankful that they can safely keep their money somewhere. It will be not wrong if I say that we sleep peacefully because we have banks to protect us.

Saves our Money

It is a human tendency that if we have money in our pocket, we will definitely spend it. Whereas if they are in a bank, we feel a bit lazy to use and also banks provide interesting profits and sometimes they also double your money in some schemes. This saves our money and we develop a good bank balance.

Develops Employment

There are more than thousands of employees working in a particular bank and there are 34 banks and all of them have more than 3 branches in a particular city. They are also available in villages, really one of the hottest sectors which provide employment. Many of us just love to be a part of a bank because it is a reputed job.

Provides Loan Facilities

It was a time when people use to help each other and families use to do everything for their near and dear ones. But time has changed how people live in nuclear families and they do not have many contacts. People in cities hail from different places as a result they won’t trust. Then who will help you financially, who will trust you and give you some money when you need it. It is a bank which provides loan and helps you financially.

Banks are important parts of our life and have become very necessary for us. We can’t imagine a society without a bank. We can’t trust others, but we can trust a bank and they are our true friends who never ditch us and also protect our money.

Essay 3 (500 – 600 Words) – Types of Banks

We go to school for education, we visit a temple for prayer similarly there is a place where we visit to solve our money-related problems. We save our money, valuable things and also get a loan. A one-stop solution for all types of money related problems. There are many banks in India and some of them are government whereas some of them are private. All of them do the same job and help people in different ways.

The First Bank

Banca Monte dei Paschi di Siena or Berenberg Bank holds the credit of the world’s oldest bank and it was established in the year 1624.

Whereas Bank of Calcutta was the first bank of India established in the year 1806. The name was further changed as Bank of Bengal and also today known as SBI.

Types of Banks:

Banks are of different types some help people in their agricultural problems whereas some help us in our day-to-day problems. I have defined them below;

Central Banks

Banks that are controlled by legislative bodies are central banks. It can be a central bank or reserve bank. We can also state them as the main bank which decides the interest rates as per inflation in the country. They are not only a bank but they also keep an eye on other banks and controls the overall money supply. They also take care of any kind of foreign exchange as well as government bonds. We can call them as the head of all banks.

Commercial Banks

A bank, that is, specially designed for the development of business. They provide loans and some business benefiting offers. They especially support middle to big size business.

Retail Banks

Another name of Retail bank is consumer bank; these banks provide all kinds of facilities to costumers. They won’t lend money to companies or other institutions. People save their money in these banks and they have their easy access to their accounts. They can take or deposit money whenever they want. They provide credit cards, debit cards, ATM facilities, etc to the customer.

Private Banks

Private Banks are also banks having people with personal profits. They provide all facilities like other retail banks just they are not authorized by government agencies. Although the government has an eye on every bank they have very few shares owned by government sectors.

Online Banks

Online banking or internet banking is one of the most convenient forms of banking. They are easily available where ever you want on your fingertips. It is also termed as virtual banking and is a branch of banking. Digital transactions are specially used in this mode of banking and it is most popular these days.

Savings Bank

That bank where we simply deposit our money and they provide us with some interest in our money is saving bank.

Regional Rural Bank

These banks are specially designed for people living in rural areas. They are commercial banks but they are operated at the regional level. They provide all kinds of financial facilities to people living in that area and work for their betterment.

Banks are the basic structures of our economy; they are very helpful in developing a nation. They secure our money and also invest that money in other sectors and generate new income. Really banks are very important and they also help normal people in developing a new business or even buying a house. They have multiple uses and they are available everywhere. We can easily find ATMs and have our money whenever needed.

FAQs: Frequently Asked Questions

Ans . There are 12 public sector banks in India after the merge of smaller banks into larger ones.

Ans . The State Bank of India is the largest public sector bank in India.

Ans . IndusInd Bank, originated in 1994, is the India’s first private bank.

Ans . The ICICI bank is now partnered with PhonePe for UPI transactions.

Ans . The first governor of Reserve Bank of India was Osborne Smith.

Ans . The ICICI bank has recently started the Whatsapp banking services.

Ans . The best bank in India is HDFC bank.

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In this essay we will discuss about Internet Banking. After reading this essay you will learn about: 1. Meaning of Internet Banking 2. Objectives and Drivers of Internet Banking 3. Trends in India 4. Facilities Available 5. Emerging Challenges 6. Main Concerns 7. Strategies to be Adopted by Indian Banks. Contents: Essay on the Meaning of Internet Banking Essay on the Objectives and Drivers of ...
Essay Writing on Role of technology in Banking Sector
March 3, 2023. Write an argrumentative essay on "Role of technology in the banking sector and its impact on customers" for RBI Grade B 2023. The banking sector has undergone a significant transformation in recent years, thanks to the role of technology. Technology has revolutionized the banking industry by making it more efficient, secure ...
Reserve Bank Of India English Language Essay
The Reserve Bank of India Act, 1934 was commenced on April 1, 1935. The Act, 1934 (II of 1934) provides the statutory basis of the functioning of the Bank. The Bank was constituted for the need of following: To regulate the issue of banknotes. To maintain reserves with a view to securing monetary stability and.
Long and Short Essay on Bank in English for Children and Students
Bank Essay 2 (300 words) Introduction. Banking system has been in place since centuries. The system has been prevalent in India as well as other parts of the world. Only the services provided and the functions carried out have enhanced over the time. History of Banks.
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Essay on Bank for all Class in 100 to 500 Words in English
Bank Essay 10 Lines (100 - 150 Words) 1) Banks are the place where people keep their money. 2) Works related to money like loans, transactions, etc are done in banks. 3) In 16 th to 19 th centuries, modern banks came into existence. 4) Banks keep our money, ornaments, important papers, etc safe. 5) The loan facility of banks provides great ...

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Essay on Internet Banking

Essay # 1. Meaning of Internet Banking :

Essay # 2. Objectives and Drivers of Internet Banking :

Essay # 3. Trends of Internet Banking in India :

Core or Anywhere Banking:

Progress of Internet Banking:

Security Precautions :

Essay # 4. Facilities Available Under Internet Banking in India:

(i) Bill Payment Service:

(ii) Fund Transfer:

(iii) Credit Card Customers:

(iv) Railway Pass and Online Booking:

(v) Investing through Internet Banking:

(vi) Recharging Prepaid Phone:

(vii) Shopping at Fingertips:

Essay # 5. Emerging Challenges of Internet Banking in India :

Essay # 6. Main Concerns in Internet Banking :

Banking Securely:

Essay # 7. Strategies to be Adopted by Indian Banks for Introducing Internet Banking :

Essay Writing on Role of technology in Banking Sector – RBI Grade B 2023

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