Merchant Banking
(1) Deals in commercial loans and investments.
(2) Purpose: Facilitate and/or finance production and trade of commodities.
(3) Offerings: Issue management, portfolio management, credit syndication, acceptance credit, counsel on mergers and acquisitions, insurance, etc.
Overseas Banking
(1) The kind of banking in which bank operates its branches outside India. It Provides and ensures stateside like banking services and specialized services required to conduct financial transactions.
(2) Offerings: Online loan application system that reduces the need for paperwork and provides customers with instant loan decision.
Offshore Banking
(1) Bank accepts currencies of countries abroad.
(2) Provides financial and legal benefits like privacy and minimal taxation.
Islamic Banking
(1) Islamic banking is a kind of banking activity which strictly follows the principles of the Islamic law (Sharia).
(2) A better and more apt term for Islamic banking is Sharia Compliant Finance.
In late 2008, a committee on Financial Sector Reforms, headed by former RBI governor Raghuram Rajan, had stressed on the need for a closer look at the issue of interest-free banking in the country. However, the Reserve Bank of India (RBI) has decided not to pursue a proposal for introduction of Islamic banking in the country.
Para banking
(1) Activities which are excluded from routine bank-work (deposits, withdrawals, giving credit, etc.) are para banking activities.
(2) Banks can undertake certain eligible financial services or activities.
(3) Para Banking activities which for banks are limited to those permitted by RBI. (4) Example: Insurance, portfolio management services, to become pension fund managers, mutual funds business, money market mutual funds, underwriting of bonds of PSUs, investment in venture capital funds, etc.
Narrow Banking (Safe Banks)
(1) Narrow banks do not lend money and are therefore called ‘safe banks’. Hence, they carry ‘zero credit risk’.
(2) They use the deposits done by customers to buy government bonds only.
(3) Advantages: (i) No danger of NPAs (ii) RBI can easily supervise them (iii) ‘Deposit Insurance’ is not required
(4) 11 banks that RBI, under PCA, is turning into Narrow Banks:- Allahabad Bank, United Bank of India, Corporation Bank, IDBI Bank, UCO Bank, Bank of India, and Central Bank of India, Indian Overseas Bank, Oriental Bank of Commerce, Dena Bank, Bank of Maharashtra.
Green Banking
(1) Promoting environmental-friendly Practices
(2) Encourages reducing carbon footprint from banking activities.
(1) Institute for Development and Research defines Green Banking as an umbrella term that refers to
(1) Practices & guidelines that make banks sustainable in economic, environment and social dimensions.
(2) It aims to use IT and physical infrastructure in a efficient and effective way, with zero or minimal impact on the environment.
(3) IDRBT offers guidelines for greening banking at 2 levels:
(i) Making day-to-day business operations, banking products and services greener by following simple practices and making them environmentally friendly.
(ii) Making IT infrastructure (including data center) and physical infrastructure (including buildings) greener.
For example taking initiatives so that a bank could itself generate electricity for its own consumption
Wholesale Banking
(1) Services provided to organisations such as mortgage Brokers, large corporate clients, mid-sized companies, real estate developers & investors, international trade finance businesses, etc.
(1) Deals in commercial loans and investments.
(2) Purpose: Facilitate and/or finance production and trade of commodities.
(3) Offerings: Issue management, portfolio management, credit syndication, acceptance credit, counsel on mergers and acquisitions, insurance, etc.
Overseas Banking
(1) The kind of banking in which bank operates its branches outside India. It Provides and ensures stateside like banking services and specialized services required to conduct financial transactions.
(2) Offerings: Online loan application system that reduces the need for paperwork and provides customers with instant loan decision.
Offshore Banking
(1) Bank accepts currencies of countries abroad.
(2) Provides financial and legal benefits like privacy and minimal taxation.
Islamic Banking
(1) Islamic banking is a kind of banking activity which strictly follows the principles of the Islamic law (Sharia).
(2) A better and more apt term for Islamic banking is Sharia Compliant Finance.
In late 2008, a committee on Financial Sector Reforms, headed by former RBI governor Raghuram Rajan, had stressed on the need for a closer look at the issue of interest-free banking in the country. However, the Reserve Bank of India (RBI) has decided not to pursue a proposal for introduction of Islamic banking in the country.
Para banking
(1) Activities which are excluded from routine bank-work (deposits, withdrawals, giving credit, etc.) are para banking activities.
(2) Banks can undertake certain eligible financial services or activities.
(3) Para Banking activities which for banks are limited to those permitted by RBI. (4) Example: Insurance, portfolio management services, to become pension fund managers, mutual funds business, money market mutual funds, underwriting of bonds of PSUs, investment in venture capital funds, etc.
Narrow Banking (Safe Banks)
(1) Narrow banks do not lend money and are therefore called ‘safe banks’. Hence, they carry ‘zero credit risk’.
(2) They use the deposits done by customers to buy government bonds only.
(3) Advantages: (i) No danger of NPAs (ii) RBI can easily supervise them (iii) ‘Deposit Insurance’ is not required
(4) 11 banks that RBI, under PCA, is turning into Narrow Banks:- Allahabad Bank, United Bank of India, Corporation Bank, IDBI Bank, UCO Bank, Bank of India, and Central Bank of India, Indian Overseas Bank, Oriental Bank of Commerce, Dena Bank, Bank of Maharashtra.
Green Banking
(1) Promoting environmental-friendly Practices
(2) Encourages reducing carbon footprint from banking activities.
(1) Institute for Development and Research defines Green Banking as an umbrella term that refers to
(1) Practices & guidelines that make banks sustainable in economic, environment and social dimensions.
(2) It aims to use IT and physical infrastructure in a efficient and effective way, with zero or minimal impact on the environment.
(3) IDRBT offers guidelines for greening banking at 2 levels:
(i) Making day-to-day business operations, banking products and services greener by following simple practices and making them environmentally friendly.
(ii) Making IT infrastructure (including data center) and physical infrastructure (including buildings) greener.
For example taking initiatives so that a bank could itself generate electricity for its own consumption
Wholesale Banking
(1) Services provided to organisations such as mortgage Brokers, large corporate clients, mid-sized companies, real estate developers & investors, international trade finance businesses, etc.
Universal Banking
(1) Recommended by R H Khan committee.
(2) It means allowing Financial Institutions & banks to carry out all types of banking or development financing activity (as allowed and permitted by RBI, Govt. & related legal Acts).
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