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Topic : Trends In Banking
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Are banks necessary for banking?

Created by : Pankaj Gautam, Client Servicing/Key Account Manager, ICICI Bank  | 09 10 2008 07:05:40 +0000
Industry : BankingFunctional Area : Personal Finance(Personal Interests)
Keywords : Banks Banking Necessary
Activity:  1478 views;  last activity : 04 14 2011 06:09:56 +0000

Is it really important that an organization should be a  bank in order to carry out the various functions that a bank generally does like- deposits, lending, investing etc. This can be an interesting debate if we all contribute to this

  
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Presently NBFCs are having some control of RBI than in the past. There are several guide lines existing from RBI on this matter. Still who can assure a total foolproof guarantee of money deposited by the common man in NBFCs albeit a corpus deposit with RBI. Where as the banks under Govt control is safe and satisfying for depositors. One should remember that the Govt control only saved Indian Banks from the recent turmoil in the world financial market. The people can have a good night sleep once they park their money in a bank .Where as the NBFCs may venture into greedy and hasty profit making ventures like share market and divert the funds to non credible companies (with less ratings) which are always risky and do not hold good for the prospects of depositors Many are less experienced in lending and recovering though they can boast a history of long experience in their sector. But the safety aspect is the prime concern for every customer. Stating that banking can stay not banks seems really out of context. The functions of NBFCs even though differ from banks but a day to day analysis (just one has to step into those premises) can find that the very similar functions of the banks are performed now by NBFCs. So what is just in a name? Hence the banks are going to stay along with banking and the effort of alienating banks from banking seems a futile exercise. Opening the field of banking should be understood in a wider perspective as it would help only the people. Instead of people going to the bank the Govt has assured that by giving the license for banking to several players the banks and the banking are going to the people. This facility if stays at a place being a stone throw away will benefit people enmass. Looking at the credibility angle and growth (57.35 for NBFCs and 25.3% for banks as per latest survey in May 2009), a few NBFCs have done very well. But past experiences of common man really does not give much credo to them until impeccable safety and durable growth of the deposits with satisfaction are assured by NBFCs totally spreading over a larger spectrum. Whereas banks with their lasting credentials and untarnished image assures common man a dependable institution in need indeed and care for day to day hassle free transactions without any doubt in mind.
By c Mohanachandran, Team Leader -(Technical), NIFE Kochi  06 01 2009 03:57:37 +0000
 
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Banking is essential in a modern community, banks are not. Now there very much little that banks do that could not equally be done by markets, non-bank financial institutions or non-financial banking institutions. As entry barriers are eroded, a wide range of competitors have emerged: Department stores, supermarkets, a range of industrial banks, unit trusts and money market funds, telephone companies etc. Some life insurance companies have recently obtained banking licenses and offer a range of banking services. So it’s not only the banks that offer services like banking, now it’s an open field.
By Omkar Bapat, Client Servicing/Key Account Manager, HDFC Bank  09 10 2008 07:07:29 +0000
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I believe that banks are essential for the important functions. In the mordern era we know these functions like deposits, lending are very important for stable economy.

These important functions have to be taken care by a organised industry, we all know that banking is organised and it can keep the economy stable..
By Japan Shah, H.O.D, Oxford School of Management  | 06 01 2009 10:28:37 +0000
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Banks have traditionally played the key role in the financial system by acting as financial intermediaries between ultimate savers and borrowers. They are not only institutions where assets are transformed, they have also built up trusts and value over the course of their effective operations. Banking as a service is incomplete without that and hence it is apparent that when we take the psychological things into consideration, the above question seems to be irrelevant.

 
By Pankaj Gautam, Client Servicing/Key Account Manager, ICICI Bank  | 09 10 2008 07:05:40 +0000
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Eko India Financial Services Private Limited provides Eko, a technology solution for banks to offer mobile banking services in India. Its solution provides peer-to-peer money transfers, cash deposits and withdrawal, wage and salary payments, micro-insurance, and micro-credit functionalities to individuals by dialing numbers on a mobile handset at various customer service points, including kirana stores, grocer shops, petrol pumps, and PCOs. The company�s solution enables banks to provide banking facilities to urban, rural, and far flung areas, as well as to people who are unbanked section of the population. Eko India Financial Services Private Limited was founded in 2007 and is based in New Delhi, India
By Harender Singh, Marketing Manager, Eko India Financial Services  | 04 14 2011 06:09:56 +0000
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