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Banking ombudsman, a quasi-judicial authority is formed with an intent to resolve the complaints of the customers of the Bank.Section 35A of the Banking Regulation Act, 1949 deals with Banking Ombudsman Scheme. It came into effect in 1995 and presently the Banking Ombudsman Scheme 2006 is in operation.

• The Reserve Bank of India in 2006 announced the revised Banking Ombudsman Scheme with enlarged scope to include customer complaints on certain new areas, such as, credit card complaints, deficiencies in providing the promised services even by banks’ sales agents, levying service charges without prior notice to the customer and non-adherence to the fair practices code as adopted by individual banks.

• Applicable to all commercial banks, regional rural banks and scheduled primary cooperative banks having business in India, the revised scheme came into effect from January 1, 2006.


• Introduced by Dr. K S KrishnaswamyCommitteein 1972, aimed to provide institutional credit to those sectors and segments for whom it is difficult to get credit.

•The overall objective of priority sector lending programme is to ensure that adequate institutional credit flows into some of the vulnerable sectors of the economy, which may not be attractive for the banks from the point of view of profitability.

Categories under PSL

• Agriculture: Small and Marginal Farmers.

• Micro, Small and Medium Enterprises 7.5 percent.

• Export Credit

• Education

• Housing

• Social Infrastructure

• Renewable Energy

• Others: SHG, JLG etc.

• Beneficiary of certain govt. sponsored schemes,

• SCs/STs,

• SHGs,

• Person with disabilities etc.


An asset, including a leased asset, becomes non-performing when it ceases to generate income for the bank and is overdue for a period of 90 days.Banks are required to classify NPAs further into

Sub-standard Assets : which has remained NPA for a period less than or equal to 18 months.

Doubtful Assets: which has remained NPA for a period exceeding 18 months.

Loss Assets : A Loss asset is one where the loss has been identified by the bank, through the internal or external auditor or by the central bank inspectors. The amount has not been written off, wholly or partly.


The Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (also known as the SARFAESI Act) is an Indian law. It allows banks and other financial institution to auction residential or commercial properties (of Defaulter) to recover loans.


Banking Sector reforms in India were conducted on the basis of Narasimham Committee reports I and II (1991 and 1998 respectively). This committee was appointed against the backdrop of the Balance of Payment Crisis. It was set up to analyze all factors related to financial system and give recommendation to improve its efficiency and productivity.

Mission Indradhanush

For revamping Public Sector Banks

The mission includes the seven key reforms of appointments, board of bureau, capitalisation, de-stressing, empowerment, framework of accountability and governance reforms.


• Concepts of White label ATMs is adopted from Canada. Since 2006, some banks have been pressing with RBI to introduce white label ATMs in India too.

• White Label ATM or White Label Automated Teller Machines in India will be owned and operated by Non-Bank entities.

• From such White Label ATM customer from any bank will be able to withdraw money, but will need to pay a fee for the services.

Regional Rural Banks(RRBs)

•RRBs are Indian Scheduled Commercial Banks (Government Banks) operating at regional level in different States of India. They have been created with a view of serving primarily the rural areas of India with basic banking and financial services. However, RRBs may have branches set up for urban operations and their area of operation may include urban areas too.

•The area of operation of RRBs is limited to the area as notified by Government of India covering one or more districts in the State.

•The development process of RRBs started on 2nd October,1975,Gandhi Jayanti with the forming of the first RRB, the Prathama Bank,Head Office at Moradabad (U.P.). Gour Gramin Bank,which was the first RRB in the Eastern Region of India.

•The Regional Rural Banks were owned by the Central Government, the State Government and the Sponsor Bank (Any commercial bank can sponsor the regional rural banks) who held shares in the ratios as follows Central Government – 50%, State Government – 15% and Sponsor Banks – 35%


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