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Banking System in India - Important Key Points

Banking System in India - Important Key Points

For Upcoming SBI - IBPS - SSC CGL Exams

Highlighted Points - 
"Bank of Hindustan" was the first bank of India which was opened in Kolkata in 1770, After then in 1806, British Government established a bank named "Bank of Bengal", in 1840 Bank of Bombay and in 1843 Bank of Madras was established. All the three banks is also known as Presidency Bank. 
In 1921 Imperial Bank of India was established after amalgamation of the three Imperial banks. In 1955 after nationalisation of the Imperial Bank of India it was renamed as State Bank of India. 
At present State Bank of India is the biggest commercial bank of India which was established in 1st July 1955. And it is Headquarted at Mumbai. 
Awadh Commercial Bank was the first wholly commercial bank which was established in 1880. 
The Punjab National BANK was established in 1894 with its headquarters at Mumbai. 

Fast Facts About RBI - 
In 1st April 1935, Reserve Bank of India was established on the recommendations of Hilton Young Committee and its Headquarters at Mumbai. 
It is the Countries Central Bank of India. It was nationalised on 1st January 1949. Again on 19th July 1969 fourteen big commercial banks were nationalised. 
The one rupee note bears the signature of the Secretary, Ministry of Finance Govt. of India. Where as the remaining notes bears the signature of the Governor of Reserve Bank of India (RBI). 
The main function of RBI is to control the monetary policy of the country and exchange rate of Indian Currency. 

Fast Facts about NABARD -
National Bank of Agricultural and Rural Development (NABARD) was established in 19th July 1982 on the recommendation of Shivraman Committee. This bank is primarily engaged in issuing short-term and long-term loans for agricultural developments. 

Fast Facts about EXIM Bank -
Export-Import Bank (EXIM Bank) was established in 1982 to provide funds to exporters and importers. Finance Commission was established in 1952 and K.C.Niyogi was its first chairman. 
The chairman of 14th Finance Commission - YV Reddy. 

Banking Points - Fast Facts -
  • National Income - It is defined as a money value of all the final goods and services produced by a country during an accounting year. 
  • Per Capita Income - This can be measured by dividing the total national income of a country by its total population. 
  • Per Capita Income = National Income/ Population
  • Direct Taxes - Income tax and Corporate tax are the two main direct taxes. 
  • Indirect Taxes - Central Excise duty and Customs Duty are the two main indirect taxes. 
  • Balance of Payment (Or Trade) - The difference betweeen the visible exports and visible imports of two countries in trade with each other is called as balance of Payment. If the difference is positive the balnce of payment (B.O.P) is called favourable and if it is negative it is called unfavourable. 
  • Bank Rate - It is the rate of interest charged by the Reserve Bank of India for lending money to commercial banks. 
  • Black Money - It means unaccounted money, concealed income and undisclosed wealth. In order to evade taxes some people falsify their bank accounts and do not record all transactions in their books. The money which thus remains unaccounted for and is illegally accumulated is called as "Black Money". 
  • Inflation - It is an increase in the amount of paper money which tends to raise general price level of the commodities. 
  • Deflation - A state of decrease in money circulation resulting in low prices and unemployement. 
  • Devaluation - It is a term indicating a definite official downwards valuation of country's currency in terms of its exchange value with other currencies. 
  • Hard Currency - Hard Currency is hard or difficult to secure. 
  • Hot Money - It describes money or currency which everybody is anxious to drop for fear of a fall in its exchange rate.
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