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Indian Banking Industry

How has the Indian banking Sector evolved during the last decade?

India’s banking sector has gone through a paradigm shift in the last few years. The ever-changing and evolving banking industry has played an essential role in the growth and development of the Indian economy. The changes and the shifts in this industry are asset quality, technology, and regulations. 

From physical banking services, including customer walk-ins and face-to-face interactions, to digital anchors (including new age contactless technologies), the Indian banking sector has seen a lot.The Indian banking system has commercial banks consisting of public, scheduled, non-scheduled, regional, private, rural, and cooperative banks. 

There are 27 public sector banks, 49 foreign banks, 21 private sector banks, 56 regional rural banks, 1526 urban cooperative banks, and 94,384 rural cooperative banks with cooperative credit institutions. The Banking Companies Act of 1949 defines the entire banking system in India.

To make our readers well-informed about the changes taking place in the banking sector, we are here with a clearer picture of how the Indian banking sector has evolved over the last few years.

The Changing Scenario

According to the Reserve Bank of India (RBI), India’s banking sector is sufficiently capitalized and well regulated. Moreover, the Indian banks have also survived the global recession. Further, the digital revolution has played a crucial role in building and shaping India’s banking sector. It has helped to promise unparalleled customer experiences and ensure extraordinary gains in productivity. 

The digital payment systems in India have also evolved with Immediate Payment Service (IMPS), which helps in faster payment methods. Especially if we study the post-demonetization period, the finance industry has witnessed a significant shift towards digitization, and now the stakeholders are fully equipped in using the technology diligently. The undergoing changes are leading to the revolution of this industry in the last few years and have been witnessing determined growth and an array of benefits.

With every phase, the Indian banking sector has adapted and diversified itself to make its customer’s financial needs easier and smoother to grow the global financial economy.

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The Driving Economy 

Over the years, banks in India have transformed the financial landscape and growth. The Indian banking system keeps the country’s economy afloat in the present scenarios. The Demonetization of the currency notes in 2016 is one of the prime examples. The existing currency notes were wiped out overnight, throwing the entire nation into chaos. The banks helped the economy regain and recover from the shock by allowing people across the nation to exchange invalid banknotes.

With India’s continuously evolving banking industry, the ability to provide robust support to the nation’s financial development also increases.

The Recent Development – Financial Inclusion 

Financial Inclusion is the availability and equality of opportunities for accessing financial services like banking. It is the primary key to driving any country’s economic growth and development. 

In pursuance of the RBI, the Indian Government is actively trying to propagate financial inclusions through various schemes. These government-run schemes are formed to enhance the outreach of financial services in India. Some of the schemes include –

  1. Pradhan Mantri Jan Dhan Yojana (PMJDY)
  2. Atal Pension Yojana (APY)
  3. Pradhan Mantri Vaya Vandana Yojana (PMVVY)
  4. Stand Up India Scheme
  5. Pradhan Mantri Mudra Yojana (PMMY)
  6. Pradhan Mantri Suraksha Bima Yojana (PMSBY)
  7. Sukanya Samriddhi Yojana
  8. Jeevan Suraksha Bandhan Yojana

The Emergence in the Use of Technology Based Services

Technological advancement is another important element leveraging the enhancement and productivity in the Indian Banking Sector. In 2002, Core Banking Solutions (CBS) was adopted for incorporating sophisticated technological solutions. It was an important step taken for the technological advancement of the Indian banking sector. 

This solution has contributed to the bank-to-client interactions and has also helped calculate penalties, interests, maturity, etc. After 2011, technological integration has raised the customer experience with the digital age. Here are a few current digitally-enabled and government-approved banking platforms, such as –

  1. Unified Payment Interface (UPI)
  2. National Unified USSD Platform
  3. Bharat Interface For Money (BHIM)
  4. Aadhar Enabled Payment System

The Merging of the Banks 

One other change in the banking sector in India is its structural change. The Indian Government is more focused on reducing the number of publicly owned banks by announcing mega-mergers. Thus, the number of public sector banks has been reduced from 27 to 12. We are here mentioning a list of public sector bank mergers until April 2020 –

  1. In April 2019, Vijaya Bank and Dena bank merged with Bank of Baroda.
  2. The 6 SBI associates and Bhartiya Mahila Bank merged with the State Bank of India.
  3. From April 1st 2020, the United Bank of India and Oriental Bank of Commerce were merged with Punjab National Bank. (It made them the second largest public sector bank in India)
  4. With effect from April 1st 2020, the Syndicate Bank got together with the Canara Bank.
  5. Allahabad Bank merged with the Indian Bank on April 1st, 2020.
  6. With effect from April 1st 2020, Andhra Bank and Corporation Bank of India merged with the Union Bank of India.

Conclusion

Technology has not only been the only transforming factor in the Indian banking sector. It has also changed the customers’ perception and has worked on their better experience in this industry. The entire Indian banking system is undergoing rapid growth and transformation with emerging digital technologies. 

There are also many scopes for more digitization and improvement to gain the overall profitability and efficiency in the services in this sector. The pace at which the entire industry is changing with the technological advancements is making it possible, which was not feasible to achieve in the earlier times.

 

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Indian Banking Industry

Why Should You Make a Career in the Banking Industry?

There always comes a time in the life of youngsters when they become highly confused thinking which career path is the best for them. This is completely natural as making a career choice is not easy as it appears since one gets fascinated by different career options available in a lot of industries. However, one should make his career in an industry for which he has a natural liking. 

If we talk about making a career in banking, it is a perfect option for those individuals who are good at numbers and would love to deal with people. Making a career in the banking industry is surely a very promising thing for young individuals. This is also due to the fact that the banking sector is a booming one and it offers a lot of good opportunities to the banking aspirants. 

Of course, everyone wants to earn well and have a satisfactory job in the end. This holds true in the case of the banking sector since it not only rewards you with great pay but also assures you of consistent growth. If you compare the starting salary of a banking professional with the other industries, it is pretty much satisfactory. So, you definitely get a good start when you join the banking industry apart from regular leaves and holidays in the entire year. 

Plus, anyone can join the banking sector irrespective of the study one has done before or the industry in which one was working. All you need to do is pass banking exams or get a professional banking certification and crack the interview. Job security is also something that concerns people but due to the zero recession effect on the banking sector, this also fades away in the minds of aspirants. In all, getting placed in banks not only secures your future but also rewards you with a happy financial, personal, and professional life. 

For further information on making a career in the banking industry, the following infographic will help you with the same and provide you with valuable insights into professional banking life.

Career-in-the-Banking-Industry

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Indian Banking Industry

Top 9 Banking Sector Myths Debunked

Cross-verify before you believe it! This statement holds true in all spheres of life, and if we talk about the professional world, the same applies there. Today, almost every industry faces newer myths around its processes which disrupts the faith of a common man towards an industry. 

These myths become even bigger and problematic when money is involved, making the banking sector one of the top myth favourites. So, let us throw light on some of the common myths prevailing around working in the banking sector and its processes. 

9 Banking Myths & Facts

Diabetes Myths - 10 Common Diabetes Myths

Myth 1: Online/Mobile Banking Exposes Sensitive Information 

Fact: This myth is not true since almost every bank today assures the best transaction security to its customers. However, it is extremely vital that customers educate themselves regarding the same. They should not leave any loopholes for the online exploiters i.e. they should follow bank guidelines strictly and not open any suspicious link that enables financial data access to exploiters.

Myth 2: Finance Degree is a Must for Working in Banks 

Fact: Just because the banking sector is all about financial numbers, it does not mean that one must possess a degree in finance if one aspires to be a banker. There are lots of bank course certifications that can make you eligible for working in the banking sector with respect to specific positions. For instance, India’s first e-learning bank portal Aspiring Bankers offers various banking course certifications that have got numerous individuals placed in leading Indian banks.

Myth 3: Top Banks offer More Security than Smaller Banks 

Fact: Just because your bank is a leading bank, it doesn’t mean you will be offered more transactional or financial security. The reason is every bank, irrespective of its size, has to take essential security measures which are needed for securing the financial details and transactions of its customers. Yes, leading banks do offer you more services but that has everything to do with enhancing your convenience/experience and not your financial security.

Myth 4: Working in Banks require On-the-Job Experience

Fact: Starting your career as a complete fresher is a common thing, and this holds true in the banking sector as well. If someone is looking for a career change, he/she must not skip the banking sector because of zero banking experience. Yes, there are skills and knowledge that make you perfect for a specific job but one can also learn while on the go after getting selected for a particular profile through banking certifications.

Myth 5: There’s No Career Progression in Banks

Fact: If you are willing to work hard and remain sincere in your work commitments, the banking sector has a lot to offer you on the plate. Apart from positional growth, one can also expect great financial progression. If you are working in a public sector bank, you’re entitled to promotions after you have successfully completed the required number of years for the same.

Myth6: Banks offer No Work-Life Balance

Fact: This myth is prevalent due to the fact that bank employees have to work extra at times to complete deadlines. However, this is a common working scenario in almost every industry. This does not make this myth true at all! Banks offer their employees regular leaves and family holiday packages whose expenses are completely borne by the banks, boosting the work-life balance of the employees eventually.

Myth 7: The Banking Sector is Male-Dominated

Fact: This myth is as false as it can get since every bank has a lot of women employees who have been working for years. If you take the example of Arundhati Bhattacharya, the ex-chairman of India’s leading public bank, State Bank of India, it clearly proves how much importance is given to women in the banking industry. If we talk about 2021, there would hardly be any department where women’s employment is not considered. One can even see females working in petrol stations and toll tax counters on the highways in India. Do we need to say anymore?

Myth 8: Digital Banking is Only for Young Account Holders

Fact: This is absolutely not true as digital banking is not restricted to young adults alone. This service is for every bank account holder, irrespective of his/her age. Such myths prevail citing the less ability of elders in using digital banking as compared to youngsters. However, using digital banking is extremely easy and such elders need not have too much technical expertise for the same.

Myth 9: Online Bank Courses is of No Use

Fact: This is not the truth as a lot of people have benefitted from online bank coaching and even got placed in top banks. In fact, online bank courses provide you with a lot of conveniences, especially where you can learn from anywhere anytime. If we talk about working individuals who want to make a shift in the banking sector, online coaching is probably the only thing that can make this dream of theirs come true. 

How to Keep Yourself Away from Such Banking Myths?

Myths can really take away a lot of your energy, focus, and time. Even worse, they can even make you act in a way that leads to your financial loss. Therefore, it is imperative to stay away from such myths through the following ways:

  • Do not trust every financial information/news that comes across your way, especially the ones that are forwarded on social media channels.
  • Keep yourself updated regarding the policies of your bank by visiting its website regularly and checking for any latest updates.
  • Listen to financial news daily so that you come to know of any major/minor changes that are happening or are about to happen in the banking sector in the coming future. 
  • Cross-verify the facts before you start to believe and act with respect to any news related to the banking sector and financial services by taking online search help or talking directly to bank representatives. 

Conclusion

These myths clearly tell us about the misinformation that is prevalent in society regarding the banking sector and its services. With the passing of time, new myths emerge in the market that can mislead people into making unwanted costly financial errors. 

So, it is essential to stop trusting any random financial news that emerges out of nowhere, especially the one that is not being discussed in society. Rather, one should take the above-listed preventive measures to keep the entire false financial information at bay, enhancing the account’s financial security eventually.