Bank Shastra

What is DICGC? The Reserve Bank of India in 1978 formed Deposit Insurance and Credit Guarantee Corporation (DICGC) as a fully owned subsidiary under the Deposit Insurance and Credit Guarantee Corporation Act, 1961 for the reason to provide insurance of deposits and credit guarantee scheme. DICGC assures that maximum of ₹5,00,000 for each user for both principal as well as on interest amount is insured, i.e. DICGC provides deposit insurance protection cover scheme to the depositor incase if bank fails. If the customer has accounts in different banks, they all are summed up as a single account and protection cover is applied to that single account. The premium paid by the banks to the Corporation is required to be soak up by the banks themselves so that the benefit of deposit insurance protection is made accessible to the depositors free of cost. In other words, the financial liability on account of payment of premium should be swallowed by the banks themselves and should not be passed o...

What is BCBS? The Basel Committee on Banking Supervision (BCBS) is the major global standard setter for the prudential regulation of banks. It also provides a forum for regular cooperation on banking regulatory matters. It has 45 members including central banks and bank supervisors from 28 jurisdictions which together accounts 95% of world GDP. In 1974 when it was established it had only 10 members, but later committee expanded its membership to more groups. Its vision is to improve understanding of key administrative issues and improve the quality of banking management worldwide. The Committee edges guidelines and standards in different areas – some of the better known among them are the international standards on capital acceptability. The headquarter for BCBS is located in Basel, Switzerland. The Bank for International Settlement (BIS) acts as a host for BCBS and other international institutions which are engaged in standardization and creating a financial stability. Current Secreta...

 Indian Banking Sector in 3 Phase Indian Banking Sector can be studied into 3 Phases as it has developed. Currently, Indian banking sector holds 27 Public sector banks, 49 foreign banks, 21 Private sector banks, 56 regional rural banks, 1,562 urban co-operative banks and 94,384 rural co-operative banks along with some other financial institutions. All these banks are regulated by the Reserve Bank of India. Phase 1: During this phase which lasted from 1786 to 1969, as it involved the inception of structural formation of the banking sector in India, many banks were set up to finance business and trades. The largest and oldest working bank in India is State Bank of India (S.B.I) which originated as Bank of Calcutta in 1806. It was one of the 3 banks founded by presidency government of British India. In 1921 all three banks were merged to form the Imperial Bank of India, which after 1947 became State Bank of India. Reserve Bank of India was also formed during this time in 1935 as the c...

History The Reserve Bank of India (RBI) is the central bank of India and manages the Indian Rupee’s supply. It is also the regulator of Indian Banking sector and plays a major role in functioning of Government of India. RBI was founded during colonial-era of India under the Reserve bank of India act of 1934 and was Nationalized in 1 January 1949.  Currently it functions under Monetary Policy Committee which was founded in 2016. Under this committee it monitors the monetary policies of India. Headquarters of RBI was setup in Calcutta (Kolkata) but was moved to Mumbai in 1937. RBI has also acted as central bank for Burma (Myanmar) until 1947 and for Pakistan until 1948, until their State Bank of Pakistan came into existence. RBI since 1949 after its nationalization is fully owned by Government of India. RBI is responsible for printing of currency Rupee under Government Supervision.  Role "To regulate the issue of Bank notes and keeping of reserves with a view to securing monetar...

 What Is the World Bank? World Bank is an international financial institution founded in 1944 which provides loans and technical assistance to 3rd world nations. It includes the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA). History World bank was founded during Bretton Woods Conference in 1944, International Monetary Fund (IMF) was also established along with World Bank and they work closely with each other. Both have their headquarters in Washington D.C, commonly president of both these institutions is an American. 189 countries around the world are members of the World Bank. After 1989, World Bank has also included many NGO’s and social active groups eligible to raise funds from them, to provide a sustainable healthcare, the World Bank also finance vaccines development, fight against diseases like AIDS, Malaria and Tuberculosis. Criteria World Bank has made a criterion were its funds will be distributed, countrie...

What Is the Central Bank? Generally central bank is involved in printing money and its distribution it also has the power to change monetary base of state. Central bank is also the lender at last resort to government and commercial banks during financial crisis. Most of the central banks of world are politically independent and operate on their own terms. Central banks are protected from insolvency due to their ability to create money and therefore operate with negative equality- European Central Bank published in 2016   Purpose Main purpose of Central bank is to oversee the printing of money and its distribution, design, and valuation. Central banks also hold the power to detain currency which are or were in circulation. This was seen during demonetization, were RBI under guideline of Indian government, banned ₹1000 and  ₹500 currency note as legal tender. They also serve to reduce unemployment in the nation by observing the macroeconomics by diverting the flow of money towar...

 Classification of Banks-World Banks have developed over time, many banks were founded to serve specific goals, some were founded to serve special category of people. So, it’s important to understand what are the types of banks or how are they categorized and how they perform. We can categorize them into six sectors Commercial Banks Exchange Banks Industrial Banks Agricultural or Co-operative Bank Saving Bank Central Bank Commercial Banks Everyone is aware of this type, here anyone with an account can deposit, request loan, earn interest on deposit and other services of banks. They earn money from the interest of loans which they have provided to consumers. They also provide many services like ATM, CDM, electronic banking system, phone banking, etc. Industrial and Commercial Bank of China is the largest commercial bank in the world with assets valuation of US$4027.44 Billion Exchange Banks Exchange bank facilitate import and export goods of their country, when someone imports good...