March 9, 2022

Banking In India: Everything You Need To Know!

May it be a child or an elderly person in our family, all of us have to go to a bank. But have you ever wondered what goes on in the world behind the closed door of the bank? The endless banking types in India, and all the professional opportunities in those fields! Well, worry not, you’re going to find out everything about Banking In India now!

What is a Bank?

The banking industry handles finances in a country that includes both cash and credit. Banks are the institutional bodies that accept deposits and grant credit to entities and play a major role in maintaining the economic stature of a country.

 It is a financial intermediary licensed to receive deposits and make loans. A primary role of banks is connecting those with funds, such as investors and depositors, to those seeking funds, such as individuals or businesses needing loans, therefore, serving as a link between customers that have capital deficits and customers with capital surpluses.
Therefore one can say that banks and money are essential and important when it comes to maintaining economies. They also have the ability to impact entire societies and nations. Hence they are closely regulated and strict procedures and principles are advised to be followed by the banks by various authorities and governments in most countries. In India, the Reserve Bank of India (RBI) is the apex banking institution that regulates the monetary policy in the country.
This article is mainly for the students who aspire to get into the profession of banking or sit for the Banking Exams 2022

The Banking System in India:

The banking system in India provides a meeting ground for both investors and those who wish to save money. Since liberalization, the Indian banking system structure and our country’s financial markets have also experienced a huge transformation as more private banks have emerged in today’s world.

In the modern era, banks play a significant role in accumulating public savings and making them available for investment, while also enhancing the mobility of capital and creating demand deposits in granting loans and buying investment securities. A few financial regulators that the Indian economy is dependent upon are:

1. Reserve Bank of India (RBI):

The Reserve Bank of India is the central banking institution of our country, and all banks regulate and operate as per the guidelines issued by it.

2. Securities Exchange Board of India (SEBI)

SEBI is a statutory body solely responsible for regulating the securities and Indian capital markets under the jurisdiction of the Ministry of Finance. Primarily, SEBI protects the interest of investors by enforcing particular rules and regulations. It monitors & regulates the securities market and helps the issuer of securities act as the protector of investors, traders, & financial mediators.

3. Insurance Regulatory and Development Authority (IRDA)

IRDA is another regulatory body whose primary objective is to protect the interests of the insured person. It is solely responsible for monitoring insurance-related activities and ensuring the development of the insurance industry. It works under the jurisdiction of the Ministry of Finance and promotes the insurance industries in India.

Banking Types in India:

In India, Banks can be classified into four main categories:

1. Commercial Banks 

Commercial Banks are regulated under the Banking Regulation Act, 1949, and their business model is designed to make a profit. Their primary function is to accept deposits and grant loans to the general public, corporate organizations, and the government. They also provide services such as checking and savings accounts, credit cards, and, investment services. They can be further classified into
i). public sector banks
ii). private sector banks
iii) foreign banks
iv). Regional Rural Banks (RRB).

Due to deregulation, commercial banks are now competing more with investment banks in money market operations, bond underwriting, and financial advisory work.

2. Retail Banks:

These institutions provide basic banking services to individual consumers and help customers save money, acquire loans, and invest. They also offer a wide range of financial services to a broad customer base. For example – products and services include safe deposit boxes, checking and savings accounting, certificates of deposit (CDs), mortgages, and car loans.

3. Central Banks:

These banks are formed, owned, and regulated by the government to manage, regulate, and protect both the money supply and the other banking institutions. They guarantee stable monetary and financial policy from country to country and serve as the government’s banker by issuing currency and conducting monetary policy. Some of its main functions are implementing monetary policy, managing foreign exchange and gold reserves, making decisions regarding official interest rates, acting as bankers to the government and other banks, and regulating and supervising the banking industry.

A Career In Banking:

Preparing for a career in Banking generally means getting graduated with a degree in Finance, Economics, Banking, or Commerce and doing well in the bank examinations. In order to perform well in the bank exams, we must know quantitative aptitude, general awareness, reasoning, English, and basic computer skills.
There are numerous lucrative jobs in Banking that offer high salaries and job security, along with other employment benefits, but The minimum qualification needed for a job in Banking is a bachelor’s degree in Commerce or Management-related specialization.

There are quite a few avenues in India, where we can make a career for ourselves in Banking, some of them being:

i). Bank Manager
ii). Financial Accountant
iii). Financial Risk
iv). Investment Banker
v). Equity Analyst
vi). Certified Public Accountant (CPA)
vii). Asset Manager
viii). Business Analyst
ix). Internal Auditor
x). Foreign Exchange Trader
xi). Credit Analyst
xii). Loan Officer
xiii). Bank Teller
xiv). Financial Service Representatives
xv). Book-Keeper
xvi). Audit Clerks and more.

Banking today is a niche career for enthusiasts in the field of commerce. For beginners, it is the first step towards understanding the global economy, discovering the challenges of the marketplace, and identifying themselves with a career that provides them with tremendous opportunities, both within the country and abroad. With new banks coming up every year owing to the privatization of services, the industry indeed provides sufficient room for graduates in any field.

The banking industry is ever-growing, and working in the industry provides stability and growth to one’s career. The social status and respect, financial benefits, and, high salary associated with banking jobs is the primary reason behind the popularity of this field. This is why a huge number of candidates apply for various government and banking jobs in India. Banking, being the backbone of the Indian economy is also one of the most demanding sectors to work with and there is a lot of scope for growth. With many national, state, and regional banks, the Indian banking sector is growing rapidly and calls for more professionals in this field. 

Regardless of whether we choose to follow the career path of banking or not – we should always keep in mind, what would suit us the best and then build a career accordingly. Dheya offers you the best solutions for finding fields which you would excel by finding out your strengths and weaknesses. Contact us now to know more!

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