Economical Environment Of Banking Sector
Banking is as old as authentic history and the modern commercial banking are traceable to ancient times. In India banking has been existed in one form or the other from time to time. The present era in banking may be taken to have commenced with establishment of bank of Bengal in 18089 under the government charter and with government participation in share capital. Allah bad bank was started in the year 1865 and Punjab national bank in 1895, etc…
Every year RBI declares its 6 monthly policy and accordingly the various measures and rates are implemented which has impact on the banking. Also the union budget affects the banking sector to boost the economy by giving certain concessions or facilities. If in budget savings are encouraged more deposits will attract the banks and in turn they can lend more money to the agricultural sector and industrial sector, therefore booming the economy. If the FDI limits are relaxed then more FDI are brought in India through banking channels.
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