Prepare an overview of the Banking Sector of INDIA. Mention your Essay

Prepare an overview of the Banking Sector of INDIA. Mention your sources - Essay Example This has led to competition and generated new level of expectations among the consumers. The Reserve Bank of India (RBI) is the central bank of the country and it closely monitors the developments in the financial sector. The banking sector is dominated by Scheduled Commercial Banks (SCBs) including 27 Public Sector Banks (PSBs), 31 Private, 42 Foreign and 196 Regional Rural Banks as of March 2002 (Research & Markets, 2009). In addition, there were 67 scheduled co-operative banks consisting of 51 scheduled urban co-operative banks and 16 scheduled state co-operative banks. State Bank of India (SBI) is the largest bank in India with a market share of 20 percent while ICICI is the second largest bank in India. The commercial banks include the former development financial institutions (DFI) such as the ICICI and the IDBI. The commercial banks have on their books very long-duration GOI securities with some banks holding as much as 45 percent in these securities (Mor, Chandrasekhar & Wahi, 2005). The GOI and the RBI together direct and govern the functioning of the banks (Ra vichandran, 2003). The initiatives or the stimulus package by the GOI has transformed the banking industry which reflects in the significant growth in the banking sector as studied by Dun & Bradstreet, an international research body. Taking into account all banks of India, as of 2009, there are 56,640 branches or offices, 893,356 employees and 27,088 ATMs (IBEF, 2009). Public sector banks dominate the industry comprising of 87.7 percent of all offices, 82% of staff and 60.3% of all ATMs. As on 2nd January 2009, the aggregate bank deposits stood at 21.2% while the ban credit touched 24% against 21.4% as on January 4, 2008. There has also been an increase in the total flow of resources from the banking sector to the commercial sector which stood at US$ 58.83 billion up to January 2, 2009. Credit expansion varies across bank groups.