The Indian capital market has been revolutionized by the introduction of E-Trading and Demat. The use of Demat and Trading accounts has made buying and selling shares much faster and more efficient compared to traditional trading with a physical broker. This integration of banks, brokers, stock exchanges, and depository participants eliminates the laborious process of investing in the stock exchange. Nowadays, individuals must contact a broker via phone or in person to place an order if they want to invest in the stock market.
Before, brokers primarily concentrated on offering specialized services to affluent clients. However, the emergence of online trading has created possibilities for average or small-scale investors to take advantage of these benefits. Additionally, the cost is significantly lower compared to what a traditional broker would charge for phone transactions. Internet trading provides customers with immediate access to account information, detailed stock quotes, extensive market analysis, and interactive trading functions. To participate in online trading, individuals require a computer, modem, and telephone connection while also registering with a broker and having both a bank account and depository account.
From a societal standpoint, banks act as intermediaries between those who need to borrow money and those who have funds but cannot use them. This helps activate the unused resources within the community and put them to productive use. The banking system can increase the overall money supply through credit creation. Banks are commonly used as a tool for monetary policy because they can control credit. They have the ability to prioritize where funds go or provide loans with favorable terms, which allows them to influence the flow of funds and ultimately impact economic development.
In India, public sector banks hold a dominant position in the banking industry. They play a vital role in the country’s financial market by providing credit and collecting savings from the majority of the population. These banks have been instrumental in driving the growth and progress of the nation, aligning with socialist ideologies and promoting a welfare state. Notably, public sector banks have consistently supported key sectors like agriculture and other priority areas.
Indian banking can be divided into nationalized banks (government-owned), private banks, and specialized banking institutions. The Reserve Bank of India serves as a centralized authority overseeing any problems or deficiencies in the system. Following the nationalization of banks in 1969, public sector banks (or nationalized banks) have become prominent and made significant advancements. The necessity to prioritize customer satisfaction has compelled these traditionally slow public sector banks to adopt a more efficient approach.
The Indian banking sector has experienced a noteworthy transformation, shifting from a conventional and inactive institution to an active and adaptable entity. This change can be accredited to the liberalization and economic reforms that have empowered banks to explore new business prospects instead of depending solely on traditional revenue sources like borrowing and lending.
Indian nationalized banks are government-owned institutions that have a pivotal role in the economy. With their wide reach and substantial scale, these banks are able to attract significant deposits. The Indian banking sector comprises of nationalized banks, private banks, and specialized financial institutions. Overseeing this system and addressing any deficiencies or anomalies is the Reserve Bank of India, which acts as the central authority. Monitoring the Indian financial sector falls under its primary responsibility.
Industry estimates indicate that there are a total of 274 commercial banks in operation in India. Among these, 223 banks belong to the public sector while 51 banks are categorized as private sector institutions. Furthermore, there are 24 foreign banks that have established their operations within the private sector. The Government of India’s liberalization policy enabled the entry of private sector banks into the banking industry. Consequently, nine new generation private banks have emerged and distinguish themselves from other Indian banks by providing exceptional levels of customer service.
The government has the power to appoint key personnel in the bank, including the chairman. The RBI develops various policies based on an analysis of the current situation in the country. These policies cover cash reserve ratio, interest rate regulation, licensing, statutory liquidity ratio, prime lending rates, bank rate, selective credit control measures, and open market operations. The aim of these policies is to enhance control over banks.
During India’s independence, there was already a well-established banking system. However, many banks prioritized financing industrial units and neglected important sectors like agriculture, small industries, and exports. In order to exercise social control over banks and ensure proper flow of funds in the economy, the government nationalized them in 1969 and 1980.
Every year, RBI declares its semi-annual policy, and as a result, various measures and rates are implemented that have an impact on the banking sector. Additionally, the Union budget affects the banking sector in order to stimulate the economy by providing certain concessions or facilities. If the budget promotes savings, it will attract more deposits to banks, enabling them to lend more money to the agricultural and industrial sectors and thus boost the economy. Moreover, if the FDI limits are relaxed, it will result in more foreign direct investment being brought into India through banking channels.
Socio Cultural Environment: Prior to the nationalization of banks, control of banking in India was held by private parties, resulting in only wealthy business houses and affluent sections of society benefiting from it. In 1969, the government nationalized 14 banks to incorporate social development in the banking sector. This move was deemed necessary for rapid economic progress that aligns with social justice within a democratic political system that is free from legal domination and offers equal opportunities for all.
With national and social objectives in mind, bankers are directed to support economically disadvantaged individuals and provide flexible and liberal financing to all sectors of the economy. Nowadays, banks offer various loans to farmers, working women, professionals, and traders. Additionally, they offer education loans to students, as well as housing loans, consumer loans, and more. Banks that serve big clients or corporations must offer personalized banking services to meet their needs, as these customers are not willing to wait in queues. In order to maintain these lucrative business relationships, bankers may also provide special provisions and benefits such as food and parties. Despite the associated costs, banks are willing to bear them due to the value these clients bring to the bank.
The use of credit cards has promoted a cashless society. Currently, MasterCard and Visa are the most commonly used cards worldwide. Banks are now issuing smartcards or debit cards that serve as electronic purses for making payments. Additionally, some banks offer home banking services through telecommunications and computer technology. Customers can use terminals installed at home to check their balances, obtain account statements, and give instructions for fund transfers.
By using ECS, we can receive dividends and interest directly into our account, eliminating any potential delay or risk of losing the post. Additionally, banks now leverage SMS and the Internet as powerful promotional tools, providing great convenience to their customers. SMS functionality operates through brief text messages sent from our mobile devices, which the bank then recognizes to provide us with the necessary information. As a result of these technological advancements, bankers have shifted from a product-focused approach to a customer-centric approach.
Gururaj B H
Alliance Business Academy
Many individuals find investments to be fascinating because they can participate in the decision making process and see the results of their choices. Not all investments will be profitable, as investor wills not always make the correct investment decisions over the period of years; however, you should earn a positive return on a diversified portfolio. In addition, there is a thrill from the major success, along with the agony associated with the stock that dramatically rose after you sold or did not buy.
Investing is a serious matter with significant consequences for an investor’s future well-being. Almost everyone engages in investments, whether they choose specific assets like stocks or participate in pension plans, employee saving programs, life insurance, or homeownership. These investments share common traits such as potential returns and the accompanying risk. As the future is uncertain, individuals need to gauge their tolerance for risk since higher returns typically involve greater risk.
To start investing, the initial step is to establish investment objectives. Once these goals are determined, comprehending the functioning of investments and the factors affecting investment choices becomes crucial. This entails understanding the procedure of issuing and trading securities, as well as complying with regulations and tax laws implemented by various government levels. Moreover, being aware of accessible sources for investment information is essential. Acquiring knowledge about these financial aspects leads to three pivotal financial concepts that hold significance in investing.
Today, the investment field has become more dynamic in comparison to just ten years ago. World events can rapidly alter specific asset values. With the abundance of available assets and continuously growing information for investors, selecting an investment has become a challenging task. To find the perfect investment, one must first analyze investor needs.
If an investment meets all of these needs, it can be considered the perfect investment. (Source: Gururaj B H Alliance Business Academy Page 16 Analysis of online trading and Dematerialization) Many investors and advisors devote a significant amount of time studying the advantages of the numerous investments available in India. Unfortunately, they often do not dedicate adequate time to understanding the investor’s needs and selecting the most suitable investments for them.
The financial environment’s competitiveness has improved and the transmission mechanism of monetary policy has been strengthened in recent years. The sequencing of interest rate deregulation has also brought better price discovery and greater efficiency to the resource allocation process. Following the deregulation, banks gained the freedom to set their own lending interest rates.
In 1957, Chartered Bank acquired Eastern Bank and the Cyprus Branches of Ionian Bank, establishing a presence in the Gulf.
The Standard Bank, founded by John Paterson in South Africa’s Cape Province in 1862, commenced its operations in Port Elizabeth in January 1863. It played a significant role in financing the diamond fields of Kimberley from 1867 and later expanded to Johannesburg in 1885 when gold was discovered there.
Standard Bank continued expanding throughout Southern, Central, and Eastern Africa and had a total of 600 offices by 1953. In 1965, it merged with the Bank of West Africa, extending its operations to Cameroon, Gambia, Ghana Nigeria, and Sierra Leone.
Standard Chartered Bank is a London-based British bank that operates across over seventy countries. It has an extensive network encompassing more than 1,700 branches and outlets including subsidiaries, associates, and joint ventures. The bank employs around 73,
000 individuals. Despite being headquartered in the UK,
it primarily generates profits from Asia,
and the Middle East rather than having a significant customer base within the country itself.
The bank primarily operates in former British colonies, as its history is closely tied to the growth of the British Empire. Nevertheless, it has also expanded into countries with less historical British influence within the last two decades. Its main goal is to serve as a reliable regulatory link between these developing economies. Currently, its primary areas of concentration encompass consumer, corporate, and institutional banking, along with providing treasury services – domains where the Group possesses considerable expertise and capabilities.
In 1969, Chartered and Standard decided to merge in a friendly manner. The merger progressed smoothly until 1986, when Lloyds Bank of the United Kingdom attempted a hostile takeover of the Group. After successfully repelling the bid, Standard Chartered faced a period of transformation. Precautions had to be taken regarding debt exposure in developing countries and loans to corporations and entrepreneurs who were unable to fulfill their obligations. Standard Chartered subsequently initiated several divestments, particularly in the United States and South Africa, and engaged in various asset sales.
Standard Chartered has prioritized expanding its presence in Asia, the Middle East, and Africa by leveraging its operations in the United Kingdom and North America. This allows customers to benefit from a connection between these markets. Additionally, the bank has concentrated on consumer, corporate, and institutional banking as well as treasury services where they possess extensive skills and capabilities.
Standard Chartered credits its achievements to the collaborative efforts, partnerships, and diverse range of skills within its staff. Diversity and inclusion are fundamental principles that underpin our culture and continue to be a major priority as we strive to become the leading global bank. Presently, our company has a workforce of 73,000 people from 115 different nationalities, with our top 500 executives comprising professionals from 61 distinct national backgrounds. We firmly believe that this diverse mix fosters creativity and innovation, enabling us to create compelling new products for our global customer base.
Standard Chartered PLC is a company listed on the London Stock Exchange and the Stock Exchange of Hong Kong. It ranks among the top 25 FTSE-100 companies in terms of market capitalization. After acquiring Korea First Bank, Standard Chartered now operates with 38,000 employees across 950 locations in over 50 countries. Their presence spans across Asia Pacific Region, South Asia, Middle East, Africa, United Kingdom, and Americas. The company caters to both Consumer and Wholesale Banking customers by offering services such as credit cards, personal loans, mortgages, deposit taking,and wealth management for individuals and small to medium-sized enterprises.
Wholesale Banking offers a range of services to corporate and institutional clients, including trade finance, cash management, lending, securities services, foreign exchange, debt capital markets, and corporate finance. Standard Chartered, a well-established institution in growing markets, strives to be the preferred partner for its customers. The Bank leverages its extensive local expertise alongside global reach. Trustworthy and reputable, the Bank is known throughout its network for its strong governance standards and dedication to making a positive impact in the communities it serves.
Gururaj B H Alliance Business Academy Page 25 Analysis of online trading and Dematerializat ion
Standard Chartered Bank (Hong Kong) Limited is one of the three banks responsible for issuing banknotes in Hong Kong. The other two banks are The Hongkong and Shanghai Banking Corporation and the Bank of China (Hong Kong). Standard Chartered Bank also actively supports marathons in various cities around the world, such as London (The City Run), Jersey, Singapore, Dubai, Lahore, Mumbai, Hong Kong, and Nairobi. The bank has a global presence across America, Asia, Africa, the Middle East, and Europe.
Standard Chartered, an international bank with a strong franchise, leverages its unique position to provide effective financial solutions by combining local market knowledge with global product expertise. The bank utilizes its presence in Asia, Africa, and the Middle East to offer customers convenient access to a wide range of currency markets, up-to-date local market information, country-specific risk management strategies, and customized solutions for capital raising and liquidity management. Gururaj B H Alliance Business Academy Page 27
Standard Chartered became the largest foreign bank in India after integrating most of Grindlays’ operations, despite reducing branches and staff from 5500 to 3500 people. They also acquired Korea First Bank on 15th April 2005, surpassing HSBC in the bid. The bank subsequently rebranded the branches as SC First Bank. In October, Standard Chartered completed the integration of its Bangkok branch and Standard Chartered Nakornthon Bank, and renamed the new entity Standard Chartered Bank (Thailand).
Standard Chartered has formed strategic alliances with Fleming Family & Partners to expand private wealth management in Asia and the Middle East. They have also acquired stakes in ACB Vietnam, Travelex, American Express Bank in Bangladesh, and Bohai Bank in China. In addition, on 9th August 2006, Standard Chartered announced that it had acquired an 81% shareholding in the Union Bank of Pakistan. This deal, ultimately worth $511 million, marked the first acquisition by a foreign firm of a Pakistani bank. As a result of the merger, the bank is now known as Standard Chartered Bank (Pakistan) and holds the position of Pakistan’s sixth largest bank.
On 22 October, 2006, Standard Chartered announced that it has received tenders for more than 51% of the issued share capital of Hsinchu International Bank. As of 30 June, 2006, Hsinchu was Taiwan’s seventh largest private sector bank by loans and deposits. Additionally, in 2006, Standard Chartered in Bangladesh formed an alliance with Dutch Bangla Bank Ltd to share their respective ATM operations. (source: Gururaj B H Alliance Business Academy Page 28 Analysis of online trading and Dematerialization)
Standard Chartered acquired a 49 percent stake in UTI Securities, an Indian brokerage firm, for $36 million in cash. They also had the option to increase their stake to 75 percent in 2008 and possibly to 100 percent by 2010, pending agreement with the Securities Trading Corporation of India Ltd. UTI Securities provides broking, wealth management, and investment banking services in 60 Indian cities. Additionally, on February 29, 2008, Standard Chartered announced that it had received all necessary approvals for its acquisition of American Express Bank Ltd from American Express Company.
Eight years later, the Calcutta agent greatly praised the local credit and flourishing business of the bank, especially the significant turnover in rice bills with leading Arab firms. Initially, when the Chartered bank entered India, Calcutta held the highest significance as a commercial city, serving as the hub for the jute and indigo trades. However, with the expansion of the cotton trade and the inauguration of the Suez canal in 1869, Bombay surpassed Calcutta and retained its position as a crucial trading and banking center.
Standard Chartered is now the largest international banking group in India, with a combined balance sheet of Rs 94515.9 cr as of March 31, 2007. The bank has a customer base of 2.4 million in retail banking and over 1200 corporate customers. Its key business areas include consumer banking (including credit cards, mortgages, personal loans, wealth management), trade finance, treasury, and custody services. As it celebrates its 150th year, the bank remains dedicated to providing innovative banking solutions for both corporate and retail customers. The group in India is led by Gururaj B H from Alliance Business Academy.
Analysis of online trading and Dematerialization is credited with several industries firsts and product innovations. These include the issuance of the first global credit card in India and the first photo card. Standard Chartered Bank was the first to issue a picture card and credit card, earning them the ISO 9002 certification. Standard Chartered group operates 78 branches in India, making it the largest international banking group in the country with a presence in 30 cities. The Bank serves a combined customer base of 2.5 million in retail banking and over 1200 corporate customers.
Standard Chartered Bank in India has two main businesses: consumer banking and wholesale banking. In consumer banking, the Bank offers various services such as credit cards, mortgages, personal loans, and wealth management. In wholesale banking, the Bank specializes in providing cash management, trade finance, treasury services, and custody services.
Standard Chartered Bank in India has also introduced innovative products. One such product is the ‘Sapnay’ credit card. The bank has also launched an international debit card that allows free access to over 1500 Visa ATMs, which is a first in the banking industry. Additionally, they offer Mileage, an overdraft facility secured by a car, and Smart Credit.