ABSTRACT
Different types of financial products and services penetrate our daily activities. As a major group of financial institutions, banks have been expanding their service scope, and hence, universal banks, which provide a variety of financial products and services in one house, have experienced growing popularity in some industrialized countries. In India, banking institutions have assumed a key role in the simplistic financial sector. Commercial banks have made effort to diversify their products and services, but a lengthy process is expected for their transition into truly universal banks. It is argued that the current structure and practices of the local market also contribute to this lengthy transformation. Thus, banks, which assume a leading position in most financial systems, have to be prepared for the growing need of their customers. Also, government should provide necessary assistance to banks for aiding them to get converted into universal banking system for the benefit of Indian customers.
INTRODUCTION
Banking institutions are dominant operators in modern financial systems and important business entities in an economy. They are divided into two separate types of institutions, namely commercial banks and investment banks in some countries, while in other countries such division is vague or even non-existent. The so-called universal banks engage in all forms of commercial and investment banking, not only including lending and deposit taking, but also underwriting securities and securities trading. In particular, some universal banks may own significant equity interests in companies with voting rights.
Germany is the typical example running the universal banking system. Canada and Switzerland, among others, are noteworthy examples moving towards universal banking. Despite the growing popularity of universal banks in a global context, the United States continues to block commercial banks from engaging in securities transaction and underwriting. Hence, it is argued that the practice of universal banking may not be suitable for all financial systems.
This project is designed to discuss primary practices of universal banks and their relevance to banking activities in India. The objective is to analyze whether the concept of Universal Banking, if implemented by Indian banks, have potential for Indian market consumers.
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Different types of financial products and services penetrate our daily activities. As a major group of financial institutions, banks have been expanding their service scope, and hence, universal banks, which provide a variety of financial products and services in one house, have experienced growing popularity in some industrialized countries. In India, banking institutions have assumed a key role in the simplistic financial sector. Commercial banks have made effort to diversify their products and services, but a lengthy process is expected for their transition into truly universal banks. It is argued that the current structure and practices of the local market also contribute to this lengthy transformation. Thus, banks, which assume a leading position in most financial systems, have to be prepared for the growing need of their customers. Also, government should provide necessary assistance to banks for aiding them to get converted into universal banking system for the benefit of Indian customers.
INTRODUCTION
Banking institutions are dominant operators in modern financial systems and important business entities in an economy. They are divided into two separate types of institutions, namely commercial banks and investment banks in some countries, while in other countries such division is vague or even non-existent. The so-called universal banks engage in all forms of commercial and investment banking, not only including lending and deposit taking, but also underwriting securities and securities trading. In particular, some universal banks may own significant equity interests in companies with voting rights.
Germany is the typical example running the universal banking system. Canada and Switzerland, among others, are noteworthy examples moving towards universal banking. Despite the growing popularity of universal banks in a global context, the United States continues to block commercial banks from engaging in securities transaction and underwriting. Hence, it is argued that the practice of universal banking may not be suitable for all financial systems.
This project is designed to discuss primary practices of universal banks and their relevance to banking activities in India. The objective is to analyze whether the concept of Universal Banking, if implemented by Indian banks, have potential for Indian market consumers.
Download Full Project Report
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