Banking Challenges

In: Business and Management

Submitted By tushaar143
Words 418
Pages 2
Existing and future challenges
The banking industry in India has a huge canvas of history , from traditional banking practices of Britishers to reforms period, nationalization to privatization of banks and now increasing numbers of foreign banks in india. Now expectations and well as level of services are increasing due to emergence of IT and competition in the market. This has created various challenges and opportunities for Indian commercial banks. A few of them are listed below.
Rural : The banking in India is fairly mature in terms of supply, product range and reach even though reach still remains a challenge for private sector and foreign banks . Consequently there have been a few instances of inorganic growth like ICICI Bank Ltd merged with Bank of Rajasthan Ltd to increase its market share in rural market and increase the market share significantly.
Management of Risks : The growing competition increases the competitiveness among banks. But existing global banking scenario is posing threats for Indian Banking Industry. The three types of risk are Commercial banks foreign exchange risk , credit risk and operating risk To offset these Mergers and Acquisition have increased and risk management capabilities have been improved.
Market Discipline and Transparency : Transparency and disclosure norms are accepted as part of corporate governance practices. Expectation is growing to be more responsible and accountable to investors. Movement of NPAs, capital, provisions, shareholding to the government, maturity profiles of assets and liabilities in balance sheets have to be disclosed .
Competition from global banks : It is impossible to live in isolation in banking sector. Hence for sustainable development integration process has to be adopted. In India we have 36 foreign banks which owing to their expertise , large size and presence in other parts of the world…...

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