Wednesday 12 October 2016

Banking


Banking

Banks - the reservoir of wealth, play an important role in our day-to-day life as they are the organisations that take care of the money of individuals and Corporates. These government authorized financial establishments are the best place to get the capital requirements or save money by different means like opening savings, current and fixed deposit accounts. Banks pay interest on the deposited money, provide loans to people for all their needs such as vehicle, home, business, education and offer services like foreign currency exchange, ATM's etc. The word bank was derived from the Italian word ' Banco' which means desk or bench, over which the transactions had happened during the earlier days.

In India, the banking system was introduced in 1786 with the establishment of General bank and the Bank of Hindustan, which are now out of date. In 1806, East India Company established Bank of Calcutta which later become Bank of Bengal, and Bank of Bombay and Bank of Madras in the respective years of 1840 and 1843. These three banks were merged in 1921 to form the Imperial Bank of India and after independence it was nationalized and became the State Bank of India (SBI) which is the oldest bank in India. The oldest Joint Stock bank in India, Allahabad Bank was started in 1865 and in 1894 the Punjab National Bank, the first complete Indian bank was established. There after, a number of banks came up such as the Bank of India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank and Bank of Mysore between the years 1906 and 1913. The Reserve Bank of India (RBI) was set up in 1935 and as per the Central Banking Authority, the RBI has got the powers for the supervision of banking in India. The government has formed SBI as the major agent of RBI and it handle all the transactions of Union and State Governments of the country. Of the 88 Scheduled Commercial Banks in India, there are 27 Public sector banks, 31 Private banks and 38 Foreign/ Multinational banks and all these banks together have a combined network of over 53,000 branches and 17,000 ATMs.

Banking, the business of handling money has become one of the most challenging sectors in the country. This well-paid, secure job is a coveted career choice of all times. Banking is a profession not only meant for Commerce/ Economics students but is open for all graduates with any academic background. By the liberalization of banking system and mushrooming of private and foreign banks, banking has become a wonderful profession that offer numerous career options. The responsibilities of the banking professionals vary according to the position.

With the boom in the IT field, a new dimension has been added to the face of banking. Earlier people have to wait for hours to make transactions like depositing, withdrawal, collection of drafts etc. But now all the operations in the banks have been computerized to provide more efficient service to the customers. Facilities and services like net banking, phone banking, credit cards, Automated Teller Machines (ATM) services, online information on the internet, home banking etc offers the customers help to make their life easier and simpler. Emergence of these technologies and the entry of financial institutions into short-term lending business provide an ample scope in this field and has created the requirement of more professionals.

Eligibility

Candidates after 10+2 of any stream can take up banking as their career, but graduates specialized in Commerce, Mathematics or Economics; post graduates, MBA holders, Chartered Accountants and Chartered Financial Analysts get more preference in the field. Many of the universities and B-schools like the Indian Institute of Banking and Finance provide specialized courses in Banking and Finance and the eligibility criteria will vary depending on the courses. Diploma courses offer practical insights into the subjects of Banking & Finance and give candidates an exposure to the operational processes of the modern banking environment.

Personal Skill : 

Banking is a competent field and those who have apt skills can taste the cup of success. Professionalism and dynamism are two major essential quality needed for this career. The other necessary skills include basic knowledge of the industry, good communication skills both written and verbal, interpersonal skills, leadership qualities, capacity to motivate team members, ability to deal with customers, ability to use computers and related technology and an alert nature. One should also possess a mathematical aptitude, a clear logical and analytical mind, diplomacy, sincerity and sound knowledge of the banking system with up-to-date knowledge of recent developments. However to join foreign sector banks one needs specialisation in some specific areas like project analysis, credit appraisal skills, managing huge loan portfolios and foreign exchange.

Job Prospects & Career Options

Banking is a career with great opportunities. Aggressive marketing and innovative policies hold the key to the success of banking operations. Lot of changes has been introduced to the banking sector due to international trade and industrial liberalization and several branches of public sector banks as well as private and foreign banks are coming up at each and every corner of the country. All these factors have created an increase in job opportunities and the requirement for people with marketing and technological skills apart from financial background. The candidates can look for jobs in many establishments such as RBI, Regional reserve banks, the State Bank of India and its associate banks, nationalized banks and private banks.

Nationalized banks recruit candidates through competitive examinations while private banks recruit candidates mainly MBA's and Chartered Accountants directly. Candidates with pleasing personality can find jobs as direct marketing executives, personal banking executives and home banking executives. Foreign banks usually go for experienced candidates for managerial posts. 

In a Nationalized bank, one can join in a bank as a clerk, grade I officer, grade II officer or as a manager. Those joining in a clerical cadre can retire as senior officer and those who join as probationary officer (grade I & II) can become General manager and even Managing Director or Chairman of the organization. The bank manager should be aware of the marketing strategy; the area and customers of the bank; be supportive to his staff and make sure the best service is offered to his customers. The main tasks of the manager involves organizing, controlling and supervising banking activities or holding overall charge of one or more departments or branches. The clerical post has got the responsibility to keep the records of accounts, loans etc and they also perform the services like payrolls and inventory accounting for the customers. Those who are appointed as probationary officers has to undergo a probation period of two years and during that time, services may be terminated at any time, if their work proves unsatisfactory. On completion of the probation period, the officers goes through various grades like scale I, scale II, scale II to scale VI, scale VII, scale VIII and scale IX. 

Investment Banking, Corporate Finance Banking, Personal, Retail and Rural Banking, Treasury Management etc are some of the major banking activities.


• Investment Banking: Investment banking supports the corporates and government by raising money through issuing and selling securities in the capital market and also advice them on strategies and helps them in implementing their plans.
• Corporate Finance Banking: Corporate Finance banking deals with the financial management of an organization by raising the capital or fund for that organization. It is through this corporate banking, the organizations are doing their transactions, deposits, fund transferring etc. It is a part of Investment Banking.
• Personal, Retail and Rural Banking: Individual customers belong to personal banking and this sector provide a range of financial advice to the customers. Retail banking also deals with direct customers, their money transactions and transfers etc. The Rural banking is for promoting loans to farmers for agriculture.
• Treasury Management: This sector deals with managing foreign currency and its collection. The treasury managers should be aware of the fluctuations of different currencies. They should manage the portfolio to avoid downgrading of the currency value.


Examination & Selection

Public sector banks recruit graduates at the entry level (as probationary officers) on the basis of an All India Level examination. They also conduct an All India Test for professionals (for senior post) who wish to enter the banking profession. Private sector/ Foreign banks prefer graduates with MBA, Chartered Accountants etc at junior positions and they are selected through campus recruitment and interviews. For the senior positions, they opt for experienced bankers. 

The Reserve Bank of India, the topmost financial institution in India conducts tests for three types of entry level positions, i,e. for clerical grade; for Grade I officers and for Grade II officers. The entry point for clerical staff is in the cash department as examiners of coins and notes, and they are promoted to the next grade when they successfully clear the relevant examinations after 5-10 years of service. RBI also conducts an All India Exam for graduates, postgraduates, professional graduates for the recruitment of Class I officers. The maximum age limit for this exam is 26 years and the candidates are tested in logical reasoning, mental ability, numerical aptitude and general English. Selected candidates are short listed for an interview for the final selection.

The selection of probationary officer in the public sector commercial banks is done by Banking Service Recruitment Board (BSRB) on the basis of a written test, which consists of test of reasoning, quantitative aptitude, general awareness, English language and descriptive test. Each region has its own BSRB which carries out the recruitment. Graduates between the age group of 21-28 years are eligible for the test which is followed by an interview. Private banks recruit Officer Trainees from amongst first class graduates, Management Trainees from amongst MBAs, and also recruit experienced personnel from the banking sector for middle and higher management positions.

The advertisements for the recruitment in various banks appear in newspapers as well as in the Employment News from time to time, according to their vacancies. All applicants are required to take the written test conducted by the respective Bank Recruitment Board. As the competition in the banking sector is very tough, only hard work, studies and practice can make one successful in the test. Number of book and magazines are available for the bank preparatory exam.
Institutes
Some institute offer diploma and certificate courses in banking while the Tamil Nadu and Manipur Universities offer graduate courses in banking. List of institutes offering courses in banking can be had from the following links.

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