Field of Social Work in Child Practice

Field of Social Work Practice in Child Welfare Definition of the Field The Encyclopedia Britannica defines child welfare as services and institutions concerned with the physical, social and psychological well-being of children, particularly children suffering from the effects of poverty or lacking normal parental care and supervision (Child Welfare, 2010). Working with children and families is the second largest area of practice for social workers, and it is most popular with those who have a Bachelor of Social Work (BSW) Degree (Berg-Weger, 2010).National Organizations Addressing Child Welfare Practice A brief description of The Child Welfare System helps to better understand the role of social workers in this field. Under the Child Abuse Prevention and Treatment Act (CAPTA), The Child Welfare system emerged. Primarily state and local regulated, this system encompasses the primary responsibility of implementing, overseeing and enforcing laws and policies aligned to protect the welfa re of children.Services provided under the child welfare system include the following: †¢ Support or coordinate service to prevent child abuse and neglect †¢ Provide services to families that need help protecting and caring for their children †¢ Oversee the investigation of reports of possible child abuse and neglect †¢ Oversee temporary and foster care of children when safety cannot be assured at home †¢ Support the well-being of children living with relatives or foster families, including ensuring their educational needs are addressed †¢ Oversee family reunification, adoption or other permanent family connections for children and youth leaving foster care Although each state has a public child welfare agency, the child welfare system is not a single entity. Public child welfare agencies often collaborate with private child welfare agencies, community-based organizations and other public agencies to ensure that abused or neglected children receive the services they need. The Children’s Bureau (CB), another national organization, is the first federal agency within the United States (U. S. ) overnment to focus exclusively on the improving the lives of children and families. The National Association of Social Workers (NASW) is a professional organization created specifically for the social work profession and serves to provide information and education to the profession and advocate on behalf of social work professionals (Berg-Weger, 2010). The Social Work Policy Institution (SWPI) is a unit within the NASW whose primary responsibility is to examine issues that relate to social workers and perform research to gather empirical data and statistics that directly and indirectly impact how public agencies and other structures deliver health and human services.The mission of SWPI is to strengthen the voice of social workers in public policy deliberations, inform policymakers through collection and dissemination of information on so cial work effectiveness, and to create a forum to examine current and future issues in health care and social service delivery (Social Work Policy Institute,2012 ). The Role of Child Welfare Social Workers The role of the social worker in the field of child welfare involves a wide variety of settings within the child welfare system which includes direct involvement with an array of external professions and agencies (e. g. courts, law enforcement, psychiatrists, psychologists and other health care delivery team professionals). This collaboration is necessary to better ensure a holistic and efficient resolution approach for clients such that the safety and best interest of the child is always first and foremost; while working toward the goal of family reunification when feasible.The role of the child welfare social worker entails: †¢ On-going follow-ups and investigation of reports of possible child abuse and/or neglect †¢ Meticulous assessments / detailed reports, and recom mendations to courts and other services within the child welfare system †¢ Coordination of supportive child care, parenting classes, and in-home family preservation services †¢ On-going follow-ups, monitoring child and family progress and evaluations of planned outcomes †¢ When applicable, coordination and follow-up of mental health services, counseling and substance abuse treatment †¢ A liaison between client(s)and other multi-collaborative team members In addition, one of the most significant roles of the child welfare social worker is the mandated reporting of child abuse. Social workers have a legal responsibility to report suspicion of any form of child abuse and/or exploitation regardless to whether the information is based on direct or indirect knowledge of incidents.The social worker works closely with local law enforcement agencies and family court systems that rely heavily on the high quality assessments as well as other recommendations from the social worker in order to implement immediate safeguards and/or take immediate action when necessary to remove a child from a harmful or potentially harmful environment. Family preservation and implementing measures that safeguard the child, and acting in the best interest of the child is always the overall goal collectively within the child welfare system and individually for the social worker when making decisions, recommendations and referrals on behalf of a child. Social Problems in the Field Although the field of child welfare encompasses a variety of issues within the practice settings of family services, adoption programs and elementary and secondary school settings, child abuse is one of the most serious issues facing social workers in this field (Berg-Weger, 2010).This issue alone, reported by the SWPI, has created an emotional toll on social workers in the field of child welfare along with a steady increase in caseloads ranging from ten to one hundred and ten cases per social wor ker (The Social Work Career Center, 2012). This makes recruitment and retention in this field an on-going challenge. As front-line workers in the protection of children, social workers in this field are at high risk of becoming victims of violence as they are not usually accompanied by law enforcement during the initial follow-up on reports of abuse. Another area within the child welfare system that creates a social dilemma is the costs associated with child abuse and neglect mainly including hospital care and foster care.The social and economic consequences and costs of child abuse and neglect impact our society both directly and indirectly. The greatest cost being the displacement and offense against children. Professions that Compete with the Field of Child Welfare Political conservations and government cut backs on social reform, media and societal oppositions continue to be a constant challenge to the field of social work in general. Particularly in the field of child welfare, and despite the fortitude of those who remain committed to the client goal of finding families more quickly through safe reunification, adoption, and legal guardianship, the difficult and challenging daily tasks of child welfare social workers are seldom publicly acknowledged unless under scrutiny.Moreover, due to the complexities of the child welfare system, one hundred percent safety for all children is a goal to be achieved, but is rarely attained. Child welfare is a field of practice that is identified by the public as being primarily a social work domain. However, less than thirty percent of child welfare workers have a professional social work degree (BSW or Master of Social Work (MSW)). In some states the number of professional social workers in public child welfare is as low as three percent, with fewer than fifteen percent of states requiring a BSW or MSW degree for any child welfare position (Social Work Policy Institute,2012).In addition, there is a high turnover with the highest turnover rates from those who are hired with the least educational background and training (Social Work Policy Institute,2012). This dilemma creates a higher caseload and workload on those who hold the longest record of remaining in the field. That is, the degreed professionals (Social Work Policy Institute,2012). Job Opportunities According to the U. S. Bureau of Labor Statistics (BLS), the number of children under the age of 18 in the U. S. has grown from forty-seven million since 1950 to seventy-three point five million. By the year 2030, this number is expected to grow to eighty-five point seven million.The BLS also estimates the need for 595,000 social workers, with an expected growth of twenty percent employment of child welfare social workers. The average growth rate for all occupations is fourteen percent. The demand for child and family social workers should continue to grow because they will be needed to investigate child abuse cases and to place children in foste r care and with adoptive families. However, growth in this occupation is subject to limited budget constraints at all levels of government which will have impact on closing the gap on the shortage of social workers in this field and overall job opportunities. Salaries vary depending on location, experience and benefits offered.However, the median annual wage as reported by BLS is $40,210 annually (Bureau of Labor and Statistics, 2012). Important Trends The CB reported that in any given year an estimation of one million children come to the attention of the child welfare system. In 2010 an estimated 701,158 children were determined to be victims of abuse and neglect and an estimated 1,537 children died related to child abuse or neglect. As the NASW Center for Workforce Studies states, child abuse and neglect occur in all segments of society, within families from all walks of life, at all income levels, all religious denominations and all racial and cultural backgrounds.These facts in dicate that child welfare requires knowledge and skills in assessment, active engagement, intervention, the use of authority, and an expert ability to negotiate and manage appropriate community resources for an immeasurable client base. This further indicates a need for more comprehensive strategies that target both the recruitment and education of the next generation of professional social workers, and the training of current practitioners. The NASW reports that currently, hiring requirements for social workers in child welfare vary. Targets for action as reported by the SWPI include influencing social work education as a requirement to practice in the field, expanding use of data and research, influencing service delivery, and strengthening policy and practice linkages.The NASW continues to advocate for measures to decrease the shortage of social workers in the field of child welfare social work and to ensure consumers have access to qualified professionals. One such measure to re cruit more degreed child welfare social workers is promoting student loan forgiveness for social work college graduates. For example, while The Higher Education Act has been authorized by Congress to offer loan forgiveness, they have yet to allocate the funds toward this program to pay-off student loans (The Social Work Career Center, 2012). However, the NASW remains vocal on behalf of social workers to get funds appropriated for this program. These are just a few examples of the on-going work to improve working conditions, salaries and other benefits for members of the profession.Other sources include the College Cost Reduction Act of 2007 that also offers a loan forgiveness program that will discharge any remaining educational debt after ten years of full-time employment in public service. These shifts mark significant trends toward improved support of social workers particularly in the field of child welfare, and even more promising employment opportunities for social work gradua tes who are interested in child welfare. Summary A unique aspect in the area of child welfare is working closely and diligently to combat one of the most sensitive issues of our society, that is, the abuse and/or neglect of children. This aspect alone makes the decision to pursue a career in child welfare a most rewarding one but challenging at the same time.The field of child welfare is professionally, emotionally, and personally taxing, and often misunderstood and under-supported. With the reported rates of child population growth and the alarming rates of reported child abuse, the need for well trained and educated social workers is critical to this field of social work in particular. In order to provide adequate and improved support for social workers and the children and families who encompass this field, supportive efforts on the part of state and federal levels, and other organizations like NASW and SWPI helps to offer a more promising outlook and outcomes for all who remain committed to achieve a most difficult task of one hundred percent safety of all children.

Morality, Meet Brave New World Essay

â€Å"The books that the world calls immoral are books that show the world its own shame.†1 Concerning Aldous Huxley’s dystopian novel, Brave New World, readers find themselves thinking the theme of the novel is not of proper conduct and it would not take place in their current world. Brave New World follows a futuristic society, the World State, where citizens are mass-produced and conditioned to suit the ways of the government and the society as a whole. Everyone is born to fit in certain classes and they crave pleasure, order and conformity. John the Savage, the protagonist, is of strict Christian moral codes and is shocked by the government’s control over citizens and their behavior. He rejects their mentality and tries to go against it, with no avail. The citizens’ sexual freedom, conditioning, risky use of drugs, dissolution of families and manipulation of religion to accommodate the society irritates many a moral critic. â€Å"Moral education, which ought never, in any circumstances, to be rational,† is said by a director (Huxley 32). It implies that the leaders do believe in moral education. However, without God or sense, it is they who make the morals. Huxley warns readers of how technology and power in the hands of the government can cause the downfall of man. With the concept of socialist morality in mind, the World State’s power is absolute and citizens follow societal codes and morals whether they like it or not, without a fight. Babies are born and nurtured in the community for the purpose of becoming productive members of the society. Citizens are conditioned to think that everyone is equal and they are made useful for the good of the society and the government. They satisfy themselves through food, sex, clothes, drugs and other entertainment promoting fun and consumption. This ensures the State’s stability. Hypnopaedic (sleep-teaching) messages such as â€Å"Every one works for every one else. We can’t do without anyone†¦Ã¢â‚¬  (Huxley 66), and â€Å"Ending is better than mending. The more stitches, the less riches†¦Ã¢â‚¬  (Huxley 50) promote the part of socialism where every member of the society must work in a way that benefits the community. The second part promotes  consumerism; people must throw away old possessions and buy newer ones. The State’s ability to satisfy these desires of the people promises economic growth and affluence. Humans are just devices in this social and scientific world, manipulated and controlled by the World State for the good of the community. â€Å"Wheels must turn steadily, but cannot turn untended. There must be men to tend them, men as steady as the wheels upon their axles, sane men, obedient men, stable in contentment,† reasons Mustapha Mond, the World Controller (Huxley 44). This quote entails that this dictatorial government knows what is best for the society, not individuals, and that is why the leaders have set the moral standards. The State maintains power through technology and medical operations which allows citizens to feel so happy, they do not care about personal freedom, thoughts or choices. At the beginning, the Director says, â€Å"Bokanovsky’s Process is one of the major instruments of social stability!† (Huxley 18) The Bokanovsky’s Process is a biological version of Henry Ford’s assembly line. It is a means of churning out test tube babies, who will live and work in a predetermined society. The populace, the social castes and the mental processes of embryos are easier to control due to this process. There is also a lack of individuality with the concept of the assembly line where everyone is indistinguishable and managed by the government to maximize efficiency and profit. Individuality does not represent community to them and therefore, is not beneficial. With the World State’s control over birth, life and death of its citizens, it is able to achieve community amity. Effective people are needed for an effective society. To accomplish this task, definite stability is needed. Progress and science allows the State to create a happy and a superficial world. World Controllers, the leaders of the society, are careful with the use of science and technology. The use of soma, which clouds present reality and makes people experience happy hallucinations, ‘feelies’, hypnopaedia and conditioning machines are tools to promote social stability. It is to keep citizens busy with work and entertainment. In the novel, citizens must go through different kinds of conditioning. â€Å"All conditioning aims at that; making people like their inescapable social destiny,† (Huxley 24) says the Director of Central London Hatchery and Conditioning Centre, where test tube babies, called â€Å"bottle  babies†, are decanted. Members of the society are taught to never be unsatisfied with their jobs, which eliminates individuals going against their â €˜destinies’. In turn, stability is created. Citizens learn through slogans, rhymes and hynopaedic messages to use soma and have sex with countless members of society. The Director shouts triumphantly, â€Å"Till at last the child’s mind is these suggestions and the sum of the suggestions is the child’s mind. And not the child’s mind only. The adult’s mind too – all his life long. The mind that judges and desires and decides is made up of these suggestions. But these suggestions are our suggestions†¦suggestions from the State.† (Huxley 34) They do not realize this but individual thoughts are done away with in the novel. Humans are just followers for the governments who can’t think for themselves because they’ve been conditioned to become that way. Elimination of emotion, families, history and literature also plays a significant part in achieving stability. Mond explains to boys touring the Hatchery, â€Å"Mother, monogamy, romance†¦ What with mothers and lovers, what with the prohibitions they were not conditioned to obey, what with the temptations and the lonely remorses, what with all the diseases and the endless isolating pain, what with the uncertainties and the poverty-they were forced to feel strongly. And feeling strongly and strongly, what was more, in solitude, in hopelessly individual isolation, how could they be stable?† (Huxley 43) Mond says by doing away with things such as mother, monogamy, â€Å"feeling strongly† and other things mentioned in the quote is how stability and harmony is gained in a society. This quote also shows the viewpoint of the World State that all humans must conduct themselves in one way. In the system, members must always remain happy for the sake of social stability. A recent report in Psychology Today concluded, â€Å"The most significant predictor of a person’s moral behavior may be religious commitment.†2 Huxley uses Christian morality to further illustrate the socialist morality of the plot. The religious conviction in man has been evident throughout the ages. The World State recognizes this urge and manipulates it toward the relevance of supporting and indulging society. The State in Brave New World creates a single religion for its people based on Henry Ford, his teachings and his representation of an assembly-line society than based on a Christ, his  teachings and a spiritual God with whom people may communicate by themselves. The services are government-funded and are mandatory, such as, the Solidarity Service, which is a parody and a substitution of the Christian Communion Service. The song of the service goes like this, â€Å"Ford, we are twelve; oh, make us one, Like, drops within the Social River; Oh, make us now together run†¦Orgy-porgy gives release.† (Huxley 74) This gives readers an idea about of the control the government has on religion and sexual practices. Though trivial, it is an example of a religion the World State forms to keep citizens in line and in accord. The phrase, â€Å"Ford, we are twelve; oh, make us one†¦Ã¢â‚¬  (Huxley 74) summons Ford and reinforces the lack of individuality where humans are the same as items on the assembly line. Twelve members are the same as one, without any difference. This service gives release of emotions, a human nature the World State had not been able to stop through conditioning. It is advantageous as it does not pose a threat to power and control of the State. Karl Marx is quoted to have said, â€Å"Religion is the opiate of the people.†3 He means to say that religions are organized to relieve people’s anxieties about their personal responsibilities for the unfairness in life. In the novel, it is soma that is substituted for religion. Mond refers soma as, â€Å"Christianity without tears†¦Ã¢â‚¬  (Huxley 185) Soma allows the public to feel at ease than the sadness and guilt caused by Christianity. Their act of prayer is taking in soma and they feel fulfilled and happy. In Brave New World Revisited, Huxley states that soma is the religion of the people.4 It can be said that the citizens of the World State are very religious in adhering to moral standards organized by the government for themselves. With the caste system strict and firm, authority in the World State is not questioned nor challenged. As a group, members fear and respect the government and would never go against it. Members may feel dissatisfied with their way of living. When the Director asks Bernard, â€Å"†¦ can you show any reason why I should not now execute the judgment passed upon you?’, Bernard answers with a confident â€Å"Yes, I can.† (Huxley 121) He proceeds to present the Director his son, John. Having a son goes against all the social morals taught by the World State. Although Bernard did not act in an anarchist fashion, he took a small step towards being disrespectful to and humiliating  a man of authority. John the Savage does not like what he sees. With â€Å"O brave new world† resonating in his head, John cries out for people at the Park Lane Hospital of Dying to stop taking the soma rations. He attempts to throw out the soma through the window and asks the people to choose freedom (Huxley 168). John hadn’t been able to go against the government. Although chaos doesn’t fully place take and seeds of confusion have been planted in the society, the government is still in control. The goals of morality, as described by C.S. Lewis, are to ensure fair play and harmony between individuals, help form good people to have a good society and keep them in a good relationship with the power that is responsible for creating them. By their motto of â€Å"Community, Stability, Identity† (Huxley 18), the Brave New World achieves these goals, given through questionable methods. The State’s ability to satisfy needs and wants of the public through entertainment, work and consumption leads to stability and economic growth for society. The government’s different conditioning techniques, intentional drug use, manipulation of religion and view that everyone belongs to and works for everyone else are used to benefit society in creating useful citizens. The consequences are a loss of dignity, values and emotions – in short, a loss of humanity. This is the idea of extreme socialist morality that takes place in the book. This version of society reflects the current society’s economic values – individual happiness is the satisfaction of his or her needs and success of growth and prosperity. The social moral codes of Brave New World create a superior society where people cooperate instead of compete. Although some critics and readers may think this is accomplished through wrong conduct, this may be what our current society strives for. WORKS CITED 1. Oscar Wilde. â€Å"Oscar Wilde Quotes†. Thinkexist.com. 2006. Thinkexist.com. 2. Morality By Design. Allaboutphilosophy.org 3. Religion: An Opaite of People?† www.ancientdays.net 4. Brave New World Revisited 5. atheism.about.com Brave New World by Aldous Huxley â€Å"Moral Criticism of Brave New World.† Associated Content. News, 2007

Christianity and Islam Essay

A few months ago, when a Vatican official announced that Catholicism was surpassed by Islam as the world’s largest faith, many news agencies around the world carried what seemed to have been a largely unnoticed issue for this present generation – religion. At least for some time, renewed debates about whether or not one should indeed consider Islam as a religion that commands world’s largest followers surfaced one after another. The issue many people think should not be dismissed is the fact that Christianity – a religion which combines an array of all its offshoots namely Roman Catholicism, Orthodox, Protestantism, Anglicanism, Evangelicals, among others – still has the largest adherents compared to any other religion, including Islam. Even if Christianity may be broken down into some larger or other smaller denominations, many people subscribe to idea that since all Christians root their belief in Christ, one must take them as belonging to a singular religion, the largest in the world to be exact. To consider Christianity as a single religion involves rounds of new separate debates. Surely, when the differences between the mainstream Christian blocks and the thousand of other minor denominations are brought into the fore, their respective beliefs will manifest diversity, resemblance, opposition, and even contradiction. Tedious as this process may appear, one may not yet consider the fact that even in the Islam religion itself there are further classifications of membership that must be taken into careful account. Again, it is legitimate to inquire whether it is proper to take Islam as a unitary religion, or they too must be broken down into their finer types. As one may correctly observe, inner divisions within the world’s largest religions – Christianity, Islam, Judaism, Hinduism, etc. – appear to be a fundamentally given fact. One can perhaps inquire whether it is possible to identify a major religion with millions, if not a billion of adherents, which does not have any, or have not suffered from any inner rift at any given point of its history. It may be interesting to ask therefore, what accounts for the eventual internal fall out of world religions in history? Better yet, how must we attempt to understand what happens in a religion that has been divided into smaller aggregate types in the course of history? II. Rationale and Scope This brief study presents a case for divisions transpiring within world religions. But since the scope of studying the issue is broad (considering that there are many major world religions to cite), this research shall be restricted at tackling Christianity and Islam as chosen types. Specifically, the study shall describe the events that transpired during the Catholic-Protestant divide of the mid 1500’s for Christianity, and the Shiite-Sunni divide for Islam. To be sure, there are other identifiable divisions which can be noted in the history of Christianity. While there are small schisms involving â€Å"heretics† who refuse to accept fundamental Christian teachings, Christianity is said to have been divided into two major blocks during the 11th century. It produced the dichotomization between the Roman Catholics and the Eastern Orthodox, which until the present still exists. For the purposes of limiting this study, the Christian division which shall be discussed in this study shall dwell on the Luther-led Reformation of the 1500’s. Meanwhile, it is also insightful to note even in the Islam religion, there have been various types of smaller divisions and schisms. For the purposes of this study too, the rift between the Shiites and the Sunnis that was created in the early years of Islam religion shall be the one in focus. A short analysis and interpretation of the sample religions used shall comprise the conclusion of this study. III. Discussion Proper a. Nature of Religion Before relating the events defining the divisions that were experienced both by Christianity and Islam, it will be helpful to cite some theories to help explain the dynamics of religion. This is important since it shall provide a working perspective which is to be used later on in the analysis. Religion is a phenomenon which may be understood in many ways. Basically speaking, it refers to the common innate feeling or â€Å"belief in a Supreme Being† (McCutcheon, 2007, p. 22). Religion obviously stems from a belief that there is a higher being that must be worshiped or adored. But religion does not pertain to kind of personal belief alone. It also describes how a believer finds the need to belong to a community which shares the same belief, and thus obey a given set of rules within it. Thus, another definition for religion may also be expressed as a â€Å"unified system of belief and practices relative to sacred things† which â€Å"unites (believers) into one single moral community† (McCutcheon, 2007, p. 22). Combing both definitions enable one to fully appreciate the fact that religion pertains to both a personal ascent to God, and a commitment to a community, a set of rules and a specific set rituals. When seen under the lenses of scientific inquiry (e. g. anthropology, sociology, philosophy, etc. ) religion reveals patterns and dynamism consistent with human belief system, knowledge, interest and relationships. This means that religion is molded into the belief system of the believers. For instance, if Christians hold that Christ in his lifetime was compassionate to the poor, it follows that they too, since they follow Christ, must do something good for their less fortunate brethren. Or if Moslems take Mohammad as their example, and Mohammad was a deeply spiritual man, they too must not take spirituality lightly in their lives. Religious mindset is committed to certain courses of action (Slater, 1978, p. 6); and these actions are meaningful only because believers draw their identities from a person or a belief system they embrace – be it the Lordship of Christ, or the greatness of the Prophet Muhammad (Slater, 1978, p. 82). This is one of the primary reasons why religions possess their â€Å"continuing identities† (Slater, 1978, p. 82). So long as a group of Christians identify themselves to the teachings of their religion, say Catholic Church, they will remain to be Catholics. As indeed, so long as a group of Moslems identify themselves to the teachings of their religion, say Shiite group, they will remain to be identified with it. What explains the shift in a belief system is when one cannot anymore identify either with a teaching, or specific religious structures. It is a general rule that key to a religion’s perpetuity is establishing an identity. When people start to feel alienated with what they used to hold or believe it, it can explain why a group of believers create their own groups to accommodate their otherwise alienated belief system. To help establish the point, it may be good to lay down two glaring examples. b. The Shiite-Sunnis Divide Islam was born at least five hundred years after Christianity was already an institutionalized religion. But what started out only as a small community following Muhammad, Islam grew in exponential proportion in just a short span of time. Within the rapid growth came bitter disputes and eventual breakaways. Although Islam is a religion which does not readily recognize that there are divisions within them, scholars are almost unanimous in agreeing that some factions already broke from within the Moslem community dating back to the days when the religion itself was merely beginning to be established. In a sense, Islam is a religion broken down into at least two major divisions even before it got to be formally established as a religious phenomenon. It all started when a certain man named Muhammad, who by the way was born in 570 to a very poor family, begun to attract followers after experiencing visions and revelations (Renard, 1998, p. 7). His reputation spread in neighboring places, and soon found himself at odds with ruling empires for the large number of followers he had gathered. After this increasingly expanding community finally settled in Mecca in 630, Muhammad would die two years after (Renard, 1998, p. 7). His death would then see his community figure in a prolonged tug-of-war for rightful succession, and would officially begin the drift within the newly established religious community. One group claimed that Muhammad chose his rightful successor in the person of his son named Ali before he died. The other group contested the claim and said, no instructions were made by the Prophet whatsoever. Instead, they held that it was appropriate for to appoint leaders themselves, and eventually chose Abu Bakr, Muhammad’s father-in-law, as the first of the four caliphs (meaning head), to rule the Islam community. Those who embraced the leadership of Ali were eventually known as the Shiites, while the followers who believed Abu Bakr’s caliphate eventually came to be known as Sunnis. As such, the neat separation within the just-emerging Islamic religion has been established. Since it exists up until today, it can be described as the â€Å"largest institutional division within the Muslim community† so far (Renard, 1998, p. 13; Ayoub, 2004, 72). c. The Catholic-Protestant Divide The era that colored the Catholic-Protestant divide was a Church marred with controversies, silent disenchantment and an ever growing discontent among Christian faithful. As history would show, it was through and because of Martin Luther – and his whole ebb generating protests against the Church – that the radical break from Catholicism was to be established. But hundreds of years before the supposed break, there had already been numerous events that point to the restlessness within the membership of the Church which it tried to quell. What were the controversies about? As early as the 1300’s, roughly two hundred years before Luther was born, an ordained priest by the name of John Wycliffe started to publish series of attacks against some of the major teachings and traditions of the Church. In 1372, he was summoned and reprimanded by Church authorities for his teachings that dwelled on the following: his denial of the doctrine of transubstantiation (a belief that the bread and wine used in celebrating the Eucharist is transformed into the real body and blood of Christ), attacks on the authority of the Pope as the head of the Church, corrupt practices within the Church, and emphasis on preaching and the use of Scriptures for teaching the doctrines of the Church (Cook, 2008, p. 95). Wycliffe probably represented the first courageous voices which tried to confront what’s wrong with the Church. In fact, he did try to raise legitimate concerns about both the divisive doctrines and lamentable discipline which the Church at that time practiced. Years after, Luther would pick up from where his predecessors had left out. In 1517, he released his Ninety-Five Theses to the public – a collection of ninety-five protests against many Church teachings – both doctrinal and moral – and Church practices, such as indulgences (spiritual merits obtained in return for monetary donations), celibacy (the promise for priests not to marry), Eucharist, among others (Cook, 2008, p. 100). Since the general religious atmosphere at that time was already ripe for reforms, his ninety-five theses were easily duplicated and spread throughout the German empire – a testament, as it were, to a huge popular support he enjoyed for the risks he took. Luther’s break from the Church was formally established when he burned the Papal bull Exsurge Domine (a decree which threatened him of excommunication if he did not recant his protests) in front of many people in a public square (Cook, 2008, 101). After which, he did subsequently ask the authorities of the German kingdom to support his cause for Church reform. Luther is remembered as a man who broke the Catholic Church apart. True enough, even before he died, he already saw the far reaching effects of his call for reforms he perhaps initially did not intended to jumpstart. Thanks to Luther, Christianity would never be the same again. The â€Å"Germany after (the) Reformation† movement in the mid 1500’s became a home to a new breed of Christians who came to be branded as Lutherans, Calvinist, Reformers, or even Protestants (Pennock, 2007, p. 168). In principle, Luther earned the reputation of being an agent of division within the Christian religion. IV. Conclusion To be sure, Christianity and Islam are not the only major religions in the world which had suffered a kind of break-up from within. Religious divisions are commonplace, and that variations sprouting from within large communities may be brought about by various factors. When divisions occur, one normally observes that differences pertaining to a host of issues including (but not limited to) doctrines, practices, or even recognized leadership become patent. As earlier mentioned, the dynamics of religion may help explain why a feeling of alienation (or a loss of identity) can push a believer or a group to break-away from mainstream religion to form their own set of practices and norms independently. Christianity and Islam were taken as exemplifications. In the points that were developed, it was seen that they share a history with lots of bitter disputes, which in turn led to an eventual division. But both religions suffered from internal rifts quite differently as well. Islam’s division was more political in nature, as two major factions with their respective claims to rightful succession to their now-dead Prophet-leader tore the emerging community apart – thus, the Sunnis and the Shiites. Christianity on the other hand, after experiencing many breakaway groups in the course of history, had to suffer yet another major blow from internal disputes led by Martin Luther in the 1500’s on account of doctrine and practices. What followed was a Christian religion torn once again, which ushered the creation of a big faction named Protestants. Religious divisions can be put under rigorous inquiry. There are viewpoints that consider these divisions as something that separate one group after another, while there are those who propose to see the same divisions as something that merely distinguish (but not separate). While the two viewpoints may be valid in their respective senses, this study places much interest not on their â€Å"distinguishability† or â€Å"separability†, but on the fact that, truly, religious divisions from within happen. References Ayoub, M. (2004). Islam. Faith and History. Oxford: Oneworld. Cook, C.. (2008) The Routledge Companion to Christian History. New York: Routledge. McCutcheon, R. (2007). Studying Religion. An Introduction. London: Equinox. Pennock, M. (2007) This is Our Church. A History of Catholicism. Notre Dame, Indiana: Ave Maria Press. Renard, J. (1998)101 Questions and Answers on Islam. New York: Paulist Press. Slater, P. (1978). The Dynamics of Religion. Meaning and Change in Religious Traditions. San Francisco: Harper and Row. (Also consulted) http://ca. news. yahoo. com/s/capress/080330/world/vatican_muslims

Gang Theory Coursework Example | Topics and Well Written Essays - 500 words

Gang Theory - Coursework Example There exist the notion of alternatives in than one may reverse his decision on grounds that those alternative methods are either unavailable or their rewards are lower than expected. With the full knowledge of the consequences may opt in taking a risk. The size of a gang may limit the probability of an individual being caught and increase the chances of benefits in that if a gang member is caught the remaining members may still reap from their actions. Farrall and Bowling (1999) attributes this to the failure of human beings to leave up to their decisions as circumstances changes over a given period. Gang crimes operate mostly on assumption that their number creates a vulnerability effect to their victims in that they use their number to intimidate and organize their actions. The vulnerability aspect encourages the gangs to operate with less worry of the likeliness of being caught (Gottschalk, 2013). Those caught in crime gangs and then released due to either completing their jail term of lack of evidence may tend to ignore the risk involved in crime (Farrall & Bowling, 1999). The fear of uncertainty is what deters a person from committing crime and once experiences the consequences involved in crime some prefer to engage in crime life. Routine based crimes are what have attributed to the continuous growth of the gang-based crimes. The social rationality is also, what determines an individual’s choice in joining a gang group. The existing social inequality from, the judicial service and the unfairness by the community in terms of revenue allocation may prompt individuals with similar grievances to from gangs and recruit a sizeable number. The social aspect at this point runs paramount to the risk assessment effect of the rational choice theory. Once a group is formed under same circumstances, they tend to bond from a long

The customer pyramid ethical issues Essay Example | Topics and Well Written Essays - 500 words

The customer pyramid ethical issues - Essay Example Initially, Microsoft Corporation used functional structure in which various personnel would be categorized and placed under on department based on their specialization. As the company grew, functional structure was rendered inappropriate. In the current structure (divisional), the company has divisions with each unit focusing on a specific line of goods. Corporate culture is the shared beliefs, ideas, values, traditions and behavior patterns that uniquely identify one organization from another. The belief system and values that members of a particular company subscribe extensively influence the exhibited organizational behavior. Microsoft Corporation was founded on the values and principles held dearly by its pioneer, Bill Gates. Gates believed initiating a computer company that could ‘enlighten’ and make even the less fortunate persons in the society realize their dreams would be noble. It is this initial deep-rooted philosophy that Microsoft has been built on to become what it is today. Currently, the company subscribes to market culture in which all focus is on the customer. The company seeks to efficiently and diligently carry out its tasks to meet the demands of the worldwide customers (King and Lawley, 98). One of the major reasons why Microsoft has grown steadily in this competitive industry is the marketing unit. The company utilizes platforms such as the internet, retail outlets and other resellers to meet the targeted global market. The legal support Microsoft Corporation has received enables it to flex the agreements terms in a way that supports its marketing process. For example, the Enterprise Agreement Direct Advisors (EDA) is one of those that have substantially supported the company’s marketing. Consequently, the finance situation at Microsoft is a cornerstone in its sustainability and development. Recently,

Discuss the importance of recruitment and selection of sales people Essay

Discuss the importance of recruitment and selection of sales people. Explain the possible problem that you may encounter in selecting the wrong person for the job - Essay Example And in spite of the considerable expansion of the indirect sale, supported by the fast and phenomenal development of new technologies, the direct sale remains a privileged tool in the global sales process. Nevertheless, it is will be assigned here that even the sale is done by direct or indirect way; the salesman plays a major role in this process that we will try to highlight along this paper. In an intuitive way, we can say that â€Å"it is somebody who succeeds in convincing a customer to buy his product or his service at his price and his conditions†. We will be able to discourse a long time on the subject, but the real fact is that the salesman is currently engaged in order to achieve this objective and to improve the results continually (Doney and Canon 1997). Thus, the real mission of salesman is to accomplish a work with innovation, motivation and high confidence. Doney and Canon (1997) state that, more and more people beginning their sales career adopt an attitude which is harmful for themselves with respect to their work. They identified a series of reasons that lead to this kind of behaviors. Among those reasons they mentioned the lack of confidence in a product, the difficulty in making a final choice by the absence of priority sense, etc. More emotive reasons like personal rejection or fidelity towards their current supplier are also present and they are often among the most difficult to counter to. The internal conflicts at the various stages of intervention in large organizations are omnipresent and constitute serious problems but not insurmountable obstacles for salespeople (Forsyth 1980). We must remember here that in 67 % of the cases, the first objection of the customer is not "the true objection" and that the sale starts when the customer says "not". We wish to warn against the reflexes of defense which come with the rejection and which tend to

Midterm Essay Example | Topics and Well Written Essays - 500 words - 3

Midterm - Essay Example In this case, laptop is the product being offered to consumers in the market. The manufacturing of this design of laptops should include all the features available in the market together with other new ones that have been designed by the firm. Secondly, place is an element that encompasses a collection of all strategic choices which pertains to either accessibility or convenience of the products offered to the consumer (Tyagi and Arun 27). Places encompass making the products being offered available to the target consumers at the location and time they prefer. After the laptops have been manufactured, the marketers should make use of the available channels of distribution to avail them to the consumer. Price of the product measures the actual product’s value to consumers. Charging a high price for the particular type of laptop suggests the quality of the product and the status of the consumer who buys it. Price affects consumer choices, especially when the product is being introduced in a new target market. This is mainly because most consumers in this target market will make their choices based on the cost of the products. Finally, promotion entails the use of tools such as advertisement, personal selling, sales promotion and public relations that the marketer of a product uses when communicating the product’s benefits to the consumer with the aim of convincing them to buy the products they are offering in the target market (Tyagi and Arun 58). Marketers must clearly describe the features and specifications of the laptops t hey are selling in order to influence the consumers’ choices. Personal motivations and the role played by people’s perceptions vary from one person to another. This because different people forms different individual opinions regarding the stimuli they receive. People continuously receive messages through their five senses. Using of these senses in stimulating the consumers to test

English should be the official language of the United States Essay - 1

English should be the official language of the United States - Essay Example I connote that the identity issue in spite of the kind of state one is affiliated to is a generational crisis and the sooner we find its solution the better. A true definition of identity lies in our own understanding of the kind of language we normally use in all the aspects of our lives. But this true definition may be construed to mean; â€Å"a true sense of one’s self that continuously develops from birth to adult hood.† This kind of growth allows for the differentiation of different generations to believe in a single unifying factor that makes a society. Such important unifying factors make up a family, a society, or even a nation. But the most important of them all is the nation hood. Even though we might consider different kinds of identity, our major concern is the national identity. I am of the opinion that if we can make a language a source of this identity then, we should reflect upon the United States of America and how English may be used to create a source of identity. I can attest to the fact that language forms part of national emblem that unifies all American regardless of their cultural, political and economical standings. The existence of many immigrants who have actually reached the citizenship status and not adjusting to this language proficiency is thwarting the development of English as a language. Regardless of this, English is still an important component of America’s national emblem (Amanda, Ebon 55). I agree that English is still a vital part of America’s identity since the minute I hear a person is from America, I can’t visualize that this person speaks any other language(s) excerpt English. Samuel Huntington asserts that the basic fundamentals of America’s identity are; the Protestantism, English customs, and law. This kind of customs brings with it the language that unites the citizens. Thus, a real American is one who’s a protestant, keeps his culture and is able to speak fluent English. But according to Nancy

YouTube Ethnography Essay Example | Topics and Well Written Essays - 1500 words

YouTube Ethnography - Essay Example The study of sociolinguistics in different contexts of language usually indicates that the different languages in play contribute to the different sociological views that people have of the language users. In the same case, political, geographical and social ideologies are derived from the social study of the use of language in different individuals. The patterns with which language is spoken is used to make descriptive judgments of the individuals who are involved in the language itself. These patterns and structures of language define the different varieties of language use that are in play in the current population. These patterns are usually derived from the recurring sameness in sound that describe the physical action of speaking, and its use in conveying meaning to the audience. Sociolinguistics includes the study of several language systems that are in play in conversational situations to try to understand the meanings that are conveyed by the physical actions of speaking the language and the implications of the different variations on the individuals using the language. In this case, the YouTube video called â€Å"Shit Italians Moms Say† will be analyzed in terms of the different variations of language use evident in the video. This paper will discuss the themes of language ideology, code switching, multilingualism, diaglossia and dialect. One of the first analyses of language use is focused on diaglossia, which refers to the use of two or more different dialects in a language use. Diaglossia in different communities usually defines the use of closely related dialects in one language community for different situations (Fansold 152). For example, in community, one variation of a dialect can be used for formal situations and the other variation of the language can be sued for informal conversations. In sociolinguistics, diaglossia is usually divided into two main language varieties, the first being the normal vernacular usage of the language. The n ormal vernacular usage of a language is defined as a low-level variety, which is used for normal conversation outside formal areas of language use. The second variation of language use that concerns diaglossia is a highly codified variety, which refers to the language used in formal situations lime education or literature. The second high-codified branch of language use is usually not used in conversational situations, since it is too formal for this application. In this case, the highly codified variety of a language is usually an older stage of a language, for example, the use of Standard English, which is a derivation of common variations of normal English (Fansold 153. In the video being described, diaglossia is seen in the way the actors in the video use their English in informal situations, where the language is a low vernacular-based version of the language. The language is interjected with different language use mechanisms that would not qualify for use in formal settings. F or example, the use of the ‘phenomenal’ interjection by the mother in the video is not formally correct. The actors in the video use a localized version of the English language to communicate with other members, which, combined with the physical usage, defines a broad are of diaglossia. The effect of diaglossia in the video is also emphasized by the use of two languages of equal standing to convey meaning to the audience. The main speaker in the video repeatedly interjects Italian words into the English language, which defines the social structure of the audience in the video. This indicates that the main people in the video are Italian. The second language variety context use in the video is the

North Miami Council Meeting Essay Example | Topics and Well Written Essays - 1250 words

North Miami Council Meeting - Essay Example In this report, the meeting I attended was held in Miami city. The city council government organized the meeting among another stakeholder of the regional government. The meeting majorly put more emphasis and addressed some of the major problems affecting its citizens. The meeting was conducted on Tuesday 9th June 2015 in the evening exactly 7.00. as it is the order of every meeting, a role call was briefly performed to ascertain the members who were present and those who are not. The list of those who were absent with apology was noted and at the same time those without apology (Burrill, 1962). Pledge of allegiance by detective Rocio, who works with North Miami police, was conducted, and after that Pastor Gregory Toussaint, who led the tabernacle of glory, put members through invocation. Oath of office administration was the section that carried more attention of the meeting. Dr. Dorothy Bndross Mindingall assisted by the school board manager in District 2 conducted it. Other events preceded this main event. The order of the business has a breakdown of subsections. These subsections were additions and deletions, amendments and deferrals (Burrill, 1962). The meeting had more issues that were to be discussed. Among the questions comprised in the order of the business, individual presentations, city events, hurricane preparedness and consent agenda. The questions that the officials put more emphasis and discussed are the certification and of the results that were returned during the runoff election process. Pursue of this was retrieved from the previous meeting that was held at the same venue. As a council, they proposed the purchase of the order one of new transit to issue in by the police department at the agreed cost. Equipment that was brought up was scheduled to be purchased separately by the council for enforcing the law (Burrill, 1962). Another proposal that was passed

Limitations of Intelligence assessment Essay Example for Free

Limitations of Intelligence assessment Essay Intelligence is defined as the ability for abstract thinking . It is the ability of an individual to act in a purposeful manner and think rationally as well as interact with the environment in an effective way. Some have also said that intelligence is whatever the intelligence tests assess which is usually dependent on the preferences of the test developer. According to Piaget, Intelligence is an equilibrium state towards which successive adaptatations of cognitive and sensorimotor patterns as well as accomodatory and assimilatory interactions between organism and environment tend towards (Flynn, 2007). Limitations of Intelligence assessment An intelligence assessment test does not show what an individual can do in specific areas and does not assess specific conditions such as dyslexia. A person with dyslexia may still have high intelligence quotient. An intelligence quotient score can be deceptive in that people with same IQ can have very different intellectual abilities. Furthermore, an IQ test does not measure raw intelligence or any absolute, inherent or innate ability. The IQ test is just a relative index of intelligence assessment which only compares one person’s performance with another of his own age (Flynn, 2007). Strengths of Intelligence assessment The strength lies in its purpose which can be educational, medical, research and vocational. In terms of vocation, IQ tests are used for vocational guidance as different vocations call for different aptitudes . In research IQ test are used to study mental growth as mental ability develop sequentially from birth onwards and so intelligence assessment can be used to see direction of individual and group curve it is also used in research to indicate the extent of differences of IQs among children of same calendar age and this will imply the need to provide materials at the different levels of difficulty. In medicine, IQ assessment is used to characterize the degree of mental retardation so as to evolve adequate management strategies. In education, it is used to identify gifted children and for homogenous grouping of children for educational effectiveness.

Political Parties Essay Example for Free

Political Parties Essay Political parties are an essential component within a democratic society. By competing in elections and encouraging citizens with certain different views of society, parties also offer citizens a wide variety of choices in governmental representation, opportunities for political contribution, and chances to form their country’s future. Although political parties play such an influential role on a country, often the concerns of the people fall on deaf ears, breaking down the trust that the public had within the parties. When public assurance in political parties is diminished, the whole democratic system falls victim to it. In all democratic systems, the party system must be deeply and strongly rooted in the make up of society. Political parties are the main framework of any democratic society. They are the means by which the public come together freely to drive for the presidency, express their ideas, and define their ambitions for their civilization. There may be political parties without democracy being apparent, but there can be no democracy without political parties. Parties in many countries, including our own South African parties, may be faulty, but they are also crucial in democratic authority. When political parties function effectively, they succeed in developing a few common ideas between a large group of people, and in doing this, they place pressure on the ruling party. Thus, they help put citizens’ small concerns into a national context. Citizens may be separated over leaders, or policies but political parties can organize these differences by compromising certain things and helping societies to unite. In addition, political parties train and nominate political leaders who will accept a role in ruling society. Through their efforts to control and influence public policy, political parties play an in-between role, connecting the organisations of government to economic, ethnic, cultural, religious and other general groups. They can convey support behind law, improving the public wellbeing, and develop citizens’ interests. Their participation in elections allows citizens to hold them responsible for their policies and actions. In multi-party systems, and based on the countries they represent, political parties often express contradictory views on public plans. These just differences of ideas are not only an important part of the democratic course, but the exchanges they generate can also help to create a better understanding of the issues and possible solutions, possibly leading to new insights. Further, when parties in competition present themselves as an alternative, all parties always try to obtain the best plan in public interest, therefore the winner in the end is society.

An Overview of Indias Banking Sector

An Overview of Indias Banking Sector INTRODUCTION A bank is a financial institution whose primary activity is to act as a payment agent for customers, to borrow and to lend money. ‘BANK the name is derived from the italian word ‘banco, which means ‘desk/bench. The history of banks pave their way back to 3rd millenium B.C. They were probably the religious places where they started off. Then they developed gradually over years and currently it has taken a very complex shape. There are certain financial institutions whicu provide banking services but do not have the banking license,they are called NBFCs. There are various types of banks on the basis of activities and on the basis of ownership and above all is the central bank which is the last resort for all commercial banks in the country. Banks ought to get license for their working as a bank and there are regulations regarding the capital requirements and their reserves. The current scenario of banking industry is bad due to the net interest margin getting thinner because of incresed inflation and resultant hike in repo rates. MEANING AND DEFINITION The definition of a bank varies from country to country. Under English law, a bank is defined as a person who carries on the business of banking, which is specified as conducting current accounts for his customers paying cheques drawn on him, and collecting cheques for his customers. A Bank can be defined as : A bank is an institution that acts as an agent that provides financial services and that holds a banking license granted by bank regulatory authorities for carrying out the most fundamental banking services. There are also financial institutions that provide certain banking services without meeting the legal definition of a bank, a so called non-banking financial company. Banks are a subset of the financial services industry.Banks are a sub set of the financial services industry. Bank can be more clearly understood by the activities it perform: Accepting deposits and granting loans to customers. It also acts as credit intermediary- borrow and lend back-to-back on their own account as middle men. It also act as a collection agent, participate in inter-bank clearing and settlement systems. Issuer of money, in the form of banknotes and current accounts subject to cheque or payment at the customers order. In other words can be said that, Banker includes a body of persons, whether incorporated or not, who carry on the business of banking. HISTORY ‘BANK, the name is derived from the italian word ‘banco , which means ‘desk/bench , used during the Renaissance by Florentines bankers , who used to make their transactions above a desk covered by a green tablecloth. In fact, the word traces its origins back to the Ancient Roman Empire, where moneylenders would set up their stalls in the middle of enclosed courtyards called ‘macella on a long bench called a ‘bancu , from which the words banco and bank are derived. WORLD HISTORY The first banks were probably the religious temples of the ancient world, and were probably established sometime during the 3rd millennium B.C. Banks probably predated the invention of money. Deposits initially consisted of grain and later other goods including cattle, agricultural implements, and eventually precious metals such as gold.There are some extant records of loans from the 18th century B.C. in Babylon that were made by temple priests monks to merchants. Ancient Greece holds further evidence of banking. There is evidence too of credit, whereby in return for a payment from a client, a moneylender in one Greek port would write a credit note for the client who could cash the note in another city. In the late third century B.C., the barren Aegean island of Delos, known for its magnificent harbor and famous temple of Apollo, became a prominent banking center. Ancient Rome perfected the administrative aspect of banking and saw greater regulation of financial institutions and financial practices. Charging interest on loans and paying interest on deposits became more highly developed and competitive. The first modern bank was founded in Italy in Genoa in 1406, its name was Banco di San Giorgio (Bank of St. George). HISTORY OF BANKING IN INDIA: AN OVERVIEW Banking in India originated in the first decade of 18th century with The General Bank of India coming into existence in 1786. This was followed by Bank of Hindustan. Both these banks are now defunct. The oldest bank in existence in India is the State Bank of India being established as The Bank of Bengal in Calcutta in June 1806. The first fully Indian owned bank was the Allahabad Bank, which was established in 1865. By the 1900s, the market expanded with the establishment of banks such as Punjab National Bank, in 1895 in Lahore and Bank of India, in 1906, in Mumbai both of which were founded under private ownership. The Reserve Bank of India formally took on the responsibility of regulating the Indian banking sector from 1935. After Indias independence in 1947, the Reserve Bank was nationalized and given broader powers. Early history At the end of late-18th century, there were hardly any banks in India in the modern sense of the term. Subsequently, banking in India remained the exclusive domain of Europeans for next several decades until the beginning of the 20th century. At the beginning of the 20th century, Indian economy was passing through a relative period of stability. Around five decades have elapsed since the Indias First war of Independence, at that time there were very small banks operated by Indians, and most of them were owned and operated by particular communities. The banking in India was controlled and dominated by the presidency banks, namely, the Bank of Bombay, the Bank of Bengal, and the Bank of Madras which later on merged to form the Imperial Bank of India, and Imperial Bank of India, upon Indias independence, was renamed the State Bank of India. There was potential for many new banks as the economy was growing. many Indians came forward to set up banks, and many banks were set up at that ti me, a number of which have survived to the present such as Bank of India and Corporation Bank, Indian Bank, Bank of Baroda, and Canara Bank. During the Wars The period during the First World War (1914-1918) through the end of the Second World War (1939-1945), and two years thereafter until the independence of India were challenging for the Indian banking. The years of the First World War were turbulent, and it took toll of many banks which simply collapsed despite the Indian economy gaining indirect boost due to war-related economic activities. At least 94 banks in India failed during the years 1913 to 1918. Post-independence The partition of India in 1947 had adversely impacted the economies of Punjab and West Bengal, and banking activities had remained paralyzed for months. In 1948, the Reserve Bank of India, Indias central banking authority, was nationalized, and it became an institution owned by the Government of India. In 1949, the Banking Regulation Act was enacted which empowered the Reserve Bank of India (RBI) to regulate, control, and inspect the banks in India. The Banking Regulation Act also provided that no new bank or branch of an existing bank may be opened without a licence from the RBI, and no two banks could have common directors. Nationalisation By the 1960s, the Indian banking industry has become an important tool to facilitate the development of the Indian economy. Indira Gandhi, the-then Prime Minister of India expressed the intention of the GOI in the annual conference to nationalised the 14 largest commercial banks with effect from the midnight of July 19, 1969. A second dose of nationalisation of 6 more commercial banks followed in 1980. The stated reason for the nationalisation was to give the government more control of credit delivery. With the second dose of nationalisation, the GOI controlled around 91% of the banking business of India. After this, until the 1990s, the nationalised banks grew at a pace of around 4%, closer to the average growth rate of the Indian economy. Liberalisation In the early 1990s the then Narsimha Rao government embarked on a policy of liberalisation and gave licences to a small number of private banks. This move, along with the rapid growth in the economy of India, kickstarted the banking sector in India, which has seen rapid growth with strong contribution from all the three sectors of banks, namely, government banks, private banks and foreign banks. The next stage for the Indian banking has been setup with the proposed relaxation in the norms for Foreign Direct Investment, where all Foreign Investors in banks may be given voting rights which could exceed the present cap of 10%,at present it has gone up to 49% with some restrictions. Current Situation Currently, India has 88 scheduled commercial banks (SCBs) 28 public sector banks (that is with the Government of India holding a stake), 29 private banks (these do not have government stake; they may be publicly listed and traded on stock exchanges) and 31 foreign banks. They have a combined network of over 53,000 branches and 17,000 ATMs. According to a report by ICRA Limited, a rating agency, the public sector banks hold over 75 percent of total assets of the banking industry, with the private and foreign banks holding 18.2% and 6.5% respectively. INDUSTRY DYNAMICS The Indian Banking industry is one of the most robustly developed banking system in the world comprising 28 PSU banks, 33 private banks and 35 foreign banks. Together these are known as scheduled commercial banks (SCBs). Apart form the SCBs, there exists 133 regional rural banks (RRBs) and four local area banks, 1853 urban co-operative banks and 109924 rural co-operative banks. The government of India nationalised 14 banks in 1969 and another six in 1980. Privatisation in the sector was allowed in 1993. ICICI Bank and HDFC Bank were the first to thrive thereafter. PSU major Sate bank of India is one of the 100 largest banks in the world. Industry Size The size of Indias financial and banking sector is quite low when compared to other countries. Omnipresence Banking is the only sector influencing all components of the GDP in one way or the other. It is the only sector that can help you capitalise on all the three key themes of the India growth story — consumption, investment and foreign trade. It drives acts as a source of funds for the infrastructure sector (construction, basic materials like cement metals and engineering). It promotes consumption through its complex machanisms for the FMCG, auto, pharma and the real estate sector. Under penetrated From a Banking and Financial Services perspective, India is an under penetrated market. The total credit as a percentage of GDP is 53% as compared to 80% in case of Japan, 83% incase of Korea.China and Malaysia have the highest credit penetration of 108% and 109% respectively. Retail credit penetration is a measly 13% in India much lower than 61% in Malaysia and 41% 23% in case of Korea and Japan. Also, India is under-insured when it comes to life and non-life insurance (penetration of just 4% in case of life insurance and 1% in case of non life insurance). TYPES OF BANKS  § ON THE BASIS OF ACTIVITIES: Banks activities can be divided into: Retail banking, dealing directly with individuals and small businesses. Business banking, providing services to mid-market business. Corporate banking, directed at large business entities. Private banking, providing wealth management services to High Net Worth Individuals and families. Investment banking, relating to activities on the financial markets Most banks are profit-making, private enterprises. However, some are owned by government, or are non-profits. Central banks are normally government owned banks: charged with quasi-regulatory responsibilities, e.g. supervising commercial banks. They generally provide liquidity to the banking system and act as Lender of last resort in event of a crisis. ON THE BASIS OF OWNERSHIP: Banks as classified on ownership basis can be categorised into: Public banks,owned and managed by government. Private banks,owned and managed by private enterpreneurs. Foreign banks,owned and managed by foreign institutions. Commercial banks Commercial banks can have two meanings: Commercial bank is the term used for a normal bank to distinguish it from an investment bank. Commercial bank can also refer to a bank or a division of a bank that mostly deals with deposits and loans from corporations or large businesses, as opposed to normal individual members of the public (retail banking). Commercial bank is engaged in the following activities: processing of payments by way of telegraphic transfer, EFTPOS, internet banking or other means issuing bank drafts and bank cheques accepting money on term deposit lending money by way of overdraft, installment loan or otherwise providing documentary and standby letter of credit, guarantees, performance bonds, securities underwriting commitments and other forms of off balance sheet exposures safekeeping of documents and other items in safe deposit boxes currency exchange sale, distribution or brokerage, with or without advice, of insurance, unit trusts and similar financial products as a â€Å"financial supermarket† Types of loans granted by commercial banks Secured loan A secured loan is a loan in which the borrower pledges some asset (e.g. a car or property) as collateral (i.e., security) for the loan. Mortgage loan A mortgage loan is a very common type of debt instrument, used to purchase real estate. Under this arrangement, the money is used to purchase property. Commercial banks, however, are given security a lien on the title to the house until the mortgage is paid off in full. If the borrower defaults on the loan, the bank would have the legal right to repossess the house and sell it, to recover sums owing to it. Unsecured loan Unsecured loans are monetary loans that are not secured against the borrowers assets (i.e., no collateral is involved). These may be available from financial institutions under many different guises or marketing packages: credit card debt, personal loans, bank overdrafts credit facilities or lines of credit corporate bonds Retail banks Retail banking refers to banking in which banks undergo transactions directly with consumers, rather than corporations or other banks. Services offered include: savings and checking accounts, mortgages, personal loans, debit cards, credit cards, and so forth. Investment banks Investment banks are financial intermediaries that perform a variety of services. This includes underwriting, acting as an intermediary between an issuer of securities and the investing public, facilitating mergers and other corporate reorganizations, and also acting as a broker for institutional clients. In other words can be said that, Investment banks help companies and governments raise money by issuing and selling securities in the capital markets (both equity and debt), as well as providing advice on transactions such as mergers and acquisitions Types of investment banks Investment banks underwrite (guarantee the sale of) stock and bond issues, trade for their own accounts, make markets, and advise corporations on capital markets activities such as mergers and acquisitions. Merchant banks were traditionally banks which engaged in trade financing. The modern definition, however, refers to banks which provide capital to firms in the form of shares rather than loans. Unlike venture capital firms, they tend not to invest in new companies. Private banking Private banking is a term for banking, investment and other financial services provided by banks to private individuals disposing of sizable assets. The term private refers to the customer service being rendered on a more personal basis than in mass-market retail banking, usually via dedicated bank advisers. Personalized financial and banking services that are traditionally offered to a banks rich,high net worth individuals (HNWIs). Public banks Banks, which are incorporated, owned and regulated by government. Private banks Private banks are banks that are not incorporated. A non-incorporated bank is owned by either an individual or a general partner(s) with limited partner(s). In any such case, the creditors can look to both the entirety of the banks assets as well as the entirety of the sole-proprietors/general-partners assets. Private banks and private banking can also refer to non-government owned banks in general, in contrast to government-owned (or nationalized) banks. NON-BANKING FINANCIAL CORPORATION Non-bank financial companies (NBFCs) are financial institutions that provide banking services without meeting the legal definition of a bank, i.e. one that does not hold a banking license. Operations are, regardless of this, still exercised under bank regulation. However this depends on the jurisdiction, as in some jurisdictions, such as New Zealand, any company can do the business of banking, and there are no banking licences issued. NBFCs are doing functions akin to that of banks, however there are a few differences: (i) A NBFC cannot accept demand deposits; (ii) it is not a part of the payment and settlement system and as such cannot issue cheques to its customers; and (iii) deposit insurance facility of DICGC is not available for NBFC depositors unlike in case of banks. It is mandatory that every NBFC should be registered with RBI to commence or carry on any business of non-banking financial institution as defined in clause (a) of Section 45 I of the RBI Act, 1934.However, to obviate dual regulation, certain category of NBFCs which are regulated by other regulators are exempted from the requirement of registration with RBI viz. Venture Capital Fund/Merchant Banking companies/Stock broking companies registered with SEBI, Insurance Company holding a valid Certificate of Registration issued by IRDA, or Housing Finance Companies regulated by National Housing Bank. All NBFCs are not entitled to accept public deposits. Only those NBFCs holding a valid Certificate of Registration with authorization to accept Public Deposits can accept/hold public deposits. The NBFCs accepting public deposits should have minimum stipulated Net Owned Fund and comply with the Directions issued by the Bank. There is ceiling on acceptance of Public Deposits. A NBFC maintaining required NOF/CRAR and complying with the prudential norms could accept public deposits as follows: Category of NBFC Ceiling on public deposits AFCs maintaining CRAR of 15% without credit rating. AFCs with CRAR of 12% and having minimum investment grade credit rating. 1.5 times of NOF or Rs.10crore whichever is less. 4 times of NOF LC/IC with CRAR of 15% and having minimum investment grade credit rating. 1.5 times of NOF AFC-Asset financing Company LC-Loan Company IC-Investment Company If a NBFC defaults in repayment of deposit, the depositor can approach Company Law Board or Consumer Forum or file a civil suit to recover the deposits Some other types of banks: An advising bank (also known as a notifying bank) advises a beneficiary (exporter) that a letter of credit (L/C) opened by an issuing bank for an applicant (importer) is available and informs the beneficiary about the terms and conditions of the L/C. The advising bank is not necessarily responsible for the payment of the credit which it advises the beneficiary of. Community development banks (CDBs) are banks designed to serve residents and spur economic development in low- to moderate-income (LMI) geographical areas. When CDBs provide retail banking services, they usually target customers from financially underserved demographics. a custodian bank, or simply custodian, refers to a financial institution responsible for safeguarding a firms or individuals financial assets. The role of a custodian in such a case would be the following: to hold in safekeeping assets such as equities and bonds, arrange settlement of any purchases and sales of such securities, collect information on and income from such assets, provide information on the underlying companies and provide regular reporting on all their activities to their clients A depository bank is a bank organized in the United States which provides all the stock transfer and agency services in connection with a depository receipt program. This function includes arranging for a custodian to accept deposits of ordinary shares, issuing the negotiable receipts which back up the shares, maintaining the register of holders to reflect all transfers and exchanges, and distributing dividends. Islamic banking refers to a system of banking or banking activity that is consistent with Islamic law (Sharia) principles and guided by Islamic economics. In particular, Islamic law prohibits the collection and payment of interest.In addition, Islamic law prohibits investing in businesses that are considered unlawful. A mutual savings bank is a financial institution chartered through a state or federal government to provide a safe place for individuals to save and to invest those savings in mortgages, loans, stocks, Bonds and other securities. An offshore bank is a bank located outside the country of residence of the depositor, typically in a low tax jurisdiction that provides financial and legal advantages. Banking Industry Strucure in India CENTRAL BANK A central bank, reserve bank, or monetary authority is the entity responsible for the monetary policy of a country. Its primary responsibility is to maintain the stability of the national currency and money supply, but more active duties include controlling subsidized-loan interest rates, and acting as a bailout lender of last resort to the banking sector during times of financial crisis. ). It may also have supervisory powers, to ensure that banks and other financial institutions do not behave recklessly or fraudulently. History The oldest central bank in the world is the Riksbank in Sweden, which was opened in 1668 with help from Dutch businessmen. This was followed in 1694 by the Bank of England, created by Scottish businessman William Paterson in the City of London at the request of the English government to help pay for a war. Activities and responsibilities Functions of a central bank implementation of monetary policy controls the nations entire money supply the Governments banker and the bankers bank (Lender of Last Resort) manages the countrys foreign exchange and gold reserves and the Governments stock register; regulation and supervision of the banking industry: setting the official interest rate used to manage both inflation and the countrys exchange rate and ensuring that this rate takes effect via a variety of policy mechanisms Monetary policy: Central banks implement a countrys chosen monetary policy. At the most basic level, this involves establishing what form of currency the country may have, whether a fiat currency, gold-backed currency, currency board or a currency union. Currency issuance: Many central banks are banks in the sense that they hold assets (foreign exchange, gold, and other financial assets) and liabilities. Central banks generally earn money by issuing currency notes and selling them to the public for interest-bearing assets, such as government bonds. Interest rate interventions: Typically a central bank controls certain types of short-term interest rates. These influence the stock- and bond markets as well as mortgage and other interest rates. Policy instruments The main monetary policy instruments available to central banks are: open market operation bank reserve requirement interest rate policy credit policy capital adequacy is important, it is defined and regulated by the Bank for International Settlements, and central banks in practice generally do not apply stricter rules. Open Market Operations: Through open market operations, a central bank influences the money supply in an economy directly. Each time it buys securities, exchanging money for the security, it raises the money supply. Conversely, selling of securities lowers the money supply. Buying of securities thus amounts to printing new money while lowering supply of the specific security. Reserve Requirement: Another significant power that central banks hold is the ability to establish reserve requirements for other banks. By requiring that a percentage of liabilities be held as cash or deposited with the central bank (or other agency), limits are set on the money supply. Interest Rate Policy: By far the most visible and obvious power of many modern central banks is to influence market interest rates. The mechanism to move the market towards a target rate is generally to lend money or borrow money in theoretically unlimited quantities, until the targeted market rate is sufficiently close to the target. Central banks may do so by lending money to and borrowing money from (taking deposits from) a limited number of qualified banks, or by purchasing and selling bonds. Capital requirements: All banks are required to hold a certain percentage of their assets as capital, a rate which may be established by the central bank or the banking supervisor. Capital requirements may be considered more effective than deposit/reserve requirements in preventing indefinite lending: when at the threshold, a bank cannot extend another loan without acquiring further capital on its balance sheet. Entry regulation Currently in most jurisdictions commercial banks are regulated by government entities and require a special bank licence to operate. Unlike most other regulated industries, the regulator is typically also a participant in the market, i.e. government owned bank (a central bank). The requirements for the issue of a bank licence vary between jurisdictions but typically incude: Minimum capital Minimum capital ratio Fit and Proper requirements for the banks controllers, owners, directors, and/or senior officers Approval of the banks business plan as being sufficiently prudent and plausible. Banking channels A branch, banking centre or financial centre is a retail location where a bank or financial institution offers a wide array of face-to-face service to its customers ATM. Mail. Telephone banking Online banking Bank crisis liquidity risk -the risk that many depositors will request withdrawals beyond available funds credit risk -the risk that those who owe money to the bank will not repay interest rate risk- the risk that the bank will become unprofitable if rising interest rates force it to pay relatively more on its deposits than it receives on its loans. Profitability A bank generates a profit from the differential between the level of interest it pays for deposits and other sources of funds, and the level of interest it charges in its lending activities. This difference is referred to as the spread between the cost of funds and the loan interest rate. Bank Regulations Bank regulations are a form of government regulation which subject banks to certain requirements, restrictions and guidelines. The objectives of bank regulation, and the emphasis are: Prudential to reduce the level of risk bank creditors are exposed to Systemic risk reduction to reduce the risk of disruption resulting from adverse trading conditions for banks causing multiple or major bank failures Avoid Misuse of Banks to reduce the risk of banks being used for criminal purposes, e.g. laundering the proceeds of crime To protect banking confidentiality Credit allocation to direct credit to favoured sectors . General Principles of Bank Regulation Banking regulations can vary widely across nations and jurisdictions. Thes are some of the general principles of bank regulation throughout the world Minimum Requirements Requirements are imposed on banks in order to promote the objectives of the regulator. The most important minimum requirement in banking regulation is minimum capital ratios. Supervisory Review Banks are required to be issued with a bank licence by the regulator in order to carry on business as a bank, and the regulator supervises licenced banks for compliance with the requirements and responds to breaches of the requirements through obtaining undertakings, giving directions, imposing penalties or revoking the banks licence. Market Discipline The regulator requires banks to publicly disclose financial and other information, and depositors and other creditors are able to use this information to assess the level of risk and to make investment decisions. As a result of this, the bank is subject to market discipline and the regulator can also use market-pricing information as an indicator of the banks financial health. Instruments and Requirements of Bank Regulation Capital requirement The capital requirement is a bank regulation, which sets a framework on how banks and depository institutions must handle their capital. The categorization of assets and capital is highly standardized so that it can be risk weighted. The capital ratio is the percentage of a banks capital to its risk-weighted assets. Reserve requirement The reserve requirement sets the minimum reserves each bank must hold to demand deposits and banknotes. The purpose of minimum reserve ratios is liquidity rather than safety. Corporate Governance Corporate governance requirements are intented to encourage the bank to be well managed and also to achieve certain objectives as to maintain it as a body corporate, maintaining minimum number of members and organisational structure etc. Financial Reporting, Disclosure and Prospectus Requirements Banks may be required to: Prepare annual financial statements according to a financial reporting standard, have them audited, and to register or publish them . Prepare more frequent financial disclosures. Have directors of the bank attest to the accuracy of such financial disclosures. Prepare and have registered prospectuses detailing the terms of securities it issues. Credit Rating Requirement Banks may be required to obtain An Overview of Indias Banking Sector An Overview of Indias Banking Sector INTRODUCTION A bank is a financial institution whose primary activity is to act as a payment agent for customers, to borrow and to lend money. ‘BANK the name is derived from the italian word ‘banco, which means ‘desk/bench. The history of banks pave their way back to 3rd millenium B.C. They were probably the religious places where they started off. Then they developed gradually over years and currently it has taken a very complex shape. There are certain financial institutions whicu provide banking services but do not have the banking license,they are called NBFCs. There are various types of banks on the basis of activities and on the basis of ownership and above all is the central bank which is the last resort for all commercial banks in the country. Banks ought to get license for their working as a bank and there are regulations regarding the capital requirements and their reserves. The current scenario of banking industry is bad due to the net interest margin getting thinner because of incresed inflation and resultant hike in repo rates. MEANING AND DEFINITION The definition of a bank varies from country to country. Under English law, a bank is defined as a person who carries on the business of banking, which is specified as conducting current accounts for his customers paying cheques drawn on him, and collecting cheques for his customers. A Bank can be defined as : A bank is an institution that acts as an agent that provides financial services and that holds a banking license granted by bank regulatory authorities for carrying out the most fundamental banking services. There are also financial institutions that provide certain banking services without meeting the legal definition of a bank, a so called non-banking financial company. Banks are a subset of the financial services industry.Banks are a sub set of the financial services industry. Bank can be more clearly understood by the activities it perform: Accepting deposits and granting loans to customers. It also acts as credit intermediary- borrow and lend back-to-back on their own account as middle men. It also act as a collection agent, participate in inter-bank clearing and settlement systems. Issuer of money, in the form of banknotes and current accounts subject to cheque or payment at the customers order. In other words can be said that, Banker includes a body of persons, whether incorporated or not, who carry on the business of banking. HISTORY ‘BANK, the name is derived from the italian word ‘banco , which means ‘desk/bench , used during the Renaissance by Florentines bankers , who used to make their transactions above a desk covered by a green tablecloth. In fact, the word traces its origins back to the Ancient Roman Empire, where moneylenders would set up their stalls in the middle of enclosed courtyards called ‘macella on a long bench called a ‘bancu , from which the words banco and bank are derived. WORLD HISTORY The first banks were probably the religious temples of the ancient world, and were probably established sometime during the 3rd millennium B.C. Banks probably predated the invention of money. Deposits initially consisted of grain and later other goods including cattle, agricultural implements, and eventually precious metals such as gold.There are some extant records of loans from the 18th century B.C. in Babylon that were made by temple priests monks to merchants. Ancient Greece holds further evidence of banking. There is evidence too of credit, whereby in return for a payment from a client, a moneylender in one Greek port would write a credit note for the client who could cash the note in another city. In the late third century B.C., the barren Aegean island of Delos, known for its magnificent harbor and famous temple of Apollo, became a prominent banking center. Ancient Rome perfected the administrative aspect of banking and saw greater regulation of financial institutions and financial practices. Charging interest on loans and paying interest on deposits became more highly developed and competitive. The first modern bank was founded in Italy in Genoa in 1406, its name was Banco di San Giorgio (Bank of St. George). HISTORY OF BANKING IN INDIA: AN OVERVIEW Banking in India originated in the first decade of 18th century with The General Bank of India coming into existence in 1786. This was followed by Bank of Hindustan. Both these banks are now defunct. The oldest bank in existence in India is the State Bank of India being established as The Bank of Bengal in Calcutta in June 1806. The first fully Indian owned bank was the Allahabad Bank, which was established in 1865. By the 1900s, the market expanded with the establishment of banks such as Punjab National Bank, in 1895 in Lahore and Bank of India, in 1906, in Mumbai both of which were founded under private ownership. The Reserve Bank of India formally took on the responsibility of regulating the Indian banking sector from 1935. After Indias independence in 1947, the Reserve Bank was nationalized and given broader powers. Early history At the end of late-18th century, there were hardly any banks in India in the modern sense of the term. Subsequently, banking in India remained the exclusive domain of Europeans for next several decades until the beginning of the 20th century. At the beginning of the 20th century, Indian economy was passing through a relative period of stability. Around five decades have elapsed since the Indias First war of Independence, at that time there were very small banks operated by Indians, and most of them were owned and operated by particular communities. The banking in India was controlled and dominated by the presidency banks, namely, the Bank of Bombay, the Bank of Bengal, and the Bank of Madras which later on merged to form the Imperial Bank of India, and Imperial Bank of India, upon Indias independence, was renamed the State Bank of India. There was potential for many new banks as the economy was growing. many Indians came forward to set up banks, and many banks were set up at that ti me, a number of which have survived to the present such as Bank of India and Corporation Bank, Indian Bank, Bank of Baroda, and Canara Bank. During the Wars The period during the First World War (1914-1918) through the end of the Second World War (1939-1945), and two years thereafter until the independence of India were challenging for the Indian banking. The years of the First World War were turbulent, and it took toll of many banks which simply collapsed despite the Indian economy gaining indirect boost due to war-related economic activities. At least 94 banks in India failed during the years 1913 to 1918. Post-independence The partition of India in 1947 had adversely impacted the economies of Punjab and West Bengal, and banking activities had remained paralyzed for months. In 1948, the Reserve Bank of India, Indias central banking authority, was nationalized, and it became an institution owned by the Government of India. In 1949, the Banking Regulation Act was enacted which empowered the Reserve Bank of India (RBI) to regulate, control, and inspect the banks in India. The Banking Regulation Act also provided that no new bank or branch of an existing bank may be opened without a licence from the RBI, and no two banks could have common directors. Nationalisation By the 1960s, the Indian banking industry has become an important tool to facilitate the development of the Indian economy. Indira Gandhi, the-then Prime Minister of India expressed the intention of the GOI in the annual conference to nationalised the 14 largest commercial banks with effect from the midnight of July 19, 1969. A second dose of nationalisation of 6 more commercial banks followed in 1980. The stated reason for the nationalisation was to give the government more control of credit delivery. With the second dose of nationalisation, the GOI controlled around 91% of the banking business of India. After this, until the 1990s, the nationalised banks grew at a pace of around 4%, closer to the average growth rate of the Indian economy. Liberalisation In the early 1990s the then Narsimha Rao government embarked on a policy of liberalisation and gave licences to a small number of private banks. This move, along with the rapid growth in the economy of India, kickstarted the banking sector in India, which has seen rapid growth with strong contribution from all the three sectors of banks, namely, government banks, private banks and foreign banks. The next stage for the Indian banking has been setup with the proposed relaxation in the norms for Foreign Direct Investment, where all Foreign Investors in banks may be given voting rights which could exceed the present cap of 10%,at present it has gone up to 49% with some restrictions. Current Situation Currently, India has 88 scheduled commercial banks (SCBs) 28 public sector banks (that is with the Government of India holding a stake), 29 private banks (these do not have government stake; they may be publicly listed and traded on stock exchanges) and 31 foreign banks. They have a combined network of over 53,000 branches and 17,000 ATMs. According to a report by ICRA Limited, a rating agency, the public sector banks hold over 75 percent of total assets of the banking industry, with the private and foreign banks holding 18.2% and 6.5% respectively. INDUSTRY DYNAMICS The Indian Banking industry is one of the most robustly developed banking system in the world comprising 28 PSU banks, 33 private banks and 35 foreign banks. Together these are known as scheduled commercial banks (SCBs). Apart form the SCBs, there exists 133 regional rural banks (RRBs) and four local area banks, 1853 urban co-operative banks and 109924 rural co-operative banks. The government of India nationalised 14 banks in 1969 and another six in 1980. Privatisation in the sector was allowed in 1993. ICICI Bank and HDFC Bank were the first to thrive thereafter. PSU major Sate bank of India is one of the 100 largest banks in the world. Industry Size The size of Indias financial and banking sector is quite low when compared to other countries. Omnipresence Banking is the only sector influencing all components of the GDP in one way or the other. It is the only sector that can help you capitalise on all the three key themes of the India growth story — consumption, investment and foreign trade. It drives acts as a source of funds for the infrastructure sector (construction, basic materials like cement metals and engineering). It promotes consumption through its complex machanisms for the FMCG, auto, pharma and the real estate sector. Under penetrated From a Banking and Financial Services perspective, India is an under penetrated market. The total credit as a percentage of GDP is 53% as compared to 80% in case of Japan, 83% incase of Korea.China and Malaysia have the highest credit penetration of 108% and 109% respectively. Retail credit penetration is a measly 13% in India much lower than 61% in Malaysia and 41% 23% in case of Korea and Japan. Also, India is under-insured when it comes to life and non-life insurance (penetration of just 4% in case of life insurance and 1% in case of non life insurance). TYPES OF BANKS  § ON THE BASIS OF ACTIVITIES: Banks activities can be divided into: Retail banking, dealing directly with individuals and small businesses. Business banking, providing services to mid-market business. Corporate banking, directed at large business entities. Private banking, providing wealth management services to High Net Worth Individuals and families. Investment banking, relating to activities on the financial markets Most banks are profit-making, private enterprises. However, some are owned by government, or are non-profits. Central banks are normally government owned banks: charged with quasi-regulatory responsibilities, e.g. supervising commercial banks. They generally provide liquidity to the banking system and act as Lender of last resort in event of a crisis. ON THE BASIS OF OWNERSHIP: Banks as classified on ownership basis can be categorised into: Public banks,owned and managed by government. Private banks,owned and managed by private enterpreneurs. Foreign banks,owned and managed by foreign institutions. Commercial banks Commercial banks can have two meanings: Commercial bank is the term used for a normal bank to distinguish it from an investment bank. Commercial bank can also refer to a bank or a division of a bank that mostly deals with deposits and loans from corporations or large businesses, as opposed to normal individual members of the public (retail banking). Commercial bank is engaged in the following activities: processing of payments by way of telegraphic transfer, EFTPOS, internet banking or other means issuing bank drafts and bank cheques accepting money on term deposit lending money by way of overdraft, installment loan or otherwise providing documentary and standby letter of credit, guarantees, performance bonds, securities underwriting commitments and other forms of off balance sheet exposures safekeeping of documents and other items in safe deposit boxes currency exchange sale, distribution or brokerage, with or without advice, of insurance, unit trusts and similar financial products as a â€Å"financial supermarket† Types of loans granted by commercial banks Secured loan A secured loan is a loan in which the borrower pledges some asset (e.g. a car or property) as collateral (i.e., security) for the loan. Mortgage loan A mortgage loan is a very common type of debt instrument, used to purchase real estate. Under this arrangement, the money is used to purchase property. Commercial banks, however, are given security a lien on the title to the house until the mortgage is paid off in full. If the borrower defaults on the loan, the bank would have the legal right to repossess the house and sell it, to recover sums owing to it. Unsecured loan Unsecured loans are monetary loans that are not secured against the borrowers assets (i.e., no collateral is involved). These may be available from financial institutions under many different guises or marketing packages: credit card debt, personal loans, bank overdrafts credit facilities or lines of credit corporate bonds Retail banks Retail banking refers to banking in which banks undergo transactions directly with consumers, rather than corporations or other banks. Services offered include: savings and checking accounts, mortgages, personal loans, debit cards, credit cards, and so forth. Investment banks Investment banks are financial intermediaries that perform a variety of services. This includes underwriting, acting as an intermediary between an issuer of securities and the investing public, facilitating mergers and other corporate reorganizations, and also acting as a broker for institutional clients. In other words can be said that, Investment banks help companies and governments raise money by issuing and selling securities in the capital markets (both equity and debt), as well as providing advice on transactions such as mergers and acquisitions Types of investment banks Investment banks underwrite (guarantee the sale of) stock and bond issues, trade for their own accounts, make markets, and advise corporations on capital markets activities such as mergers and acquisitions. Merchant banks were traditionally banks which engaged in trade financing. The modern definition, however, refers to banks which provide capital to firms in the form of shares rather than loans. Unlike venture capital firms, they tend not to invest in new companies. Private banking Private banking is a term for banking, investment and other financial services provided by banks to private individuals disposing of sizable assets. The term private refers to the customer service being rendered on a more personal basis than in mass-market retail banking, usually via dedicated bank advisers. Personalized financial and banking services that are traditionally offered to a banks rich,high net worth individuals (HNWIs). Public banks Banks, which are incorporated, owned and regulated by government. Private banks Private banks are banks that are not incorporated. A non-incorporated bank is owned by either an individual or a general partner(s) with limited partner(s). In any such case, the creditors can look to both the entirety of the banks assets as well as the entirety of the sole-proprietors/general-partners assets. Private banks and private banking can also refer to non-government owned banks in general, in contrast to government-owned (or nationalized) banks. NON-BANKING FINANCIAL CORPORATION Non-bank financial companies (NBFCs) are financial institutions that provide banking services without meeting the legal definition of a bank, i.e. one that does not hold a banking license. Operations are, regardless of this, still exercised under bank regulation. However this depends on the jurisdiction, as in some jurisdictions, such as New Zealand, any company can do the business of banking, and there are no banking licences issued. NBFCs are doing functions akin to that of banks, however there are a few differences: (i) A NBFC cannot accept demand deposits; (ii) it is not a part of the payment and settlement system and as such cannot issue cheques to its customers; and (iii) deposit insurance facility of DICGC is not available for NBFC depositors unlike in case of banks. It is mandatory that every NBFC should be registered with RBI to commence or carry on any business of non-banking financial institution as defined in clause (a) of Section 45 I of the RBI Act, 1934.However, to obviate dual regulation, certain category of NBFCs which are regulated by other regulators are exempted from the requirement of registration with RBI viz. Venture Capital Fund/Merchant Banking companies/Stock broking companies registered with SEBI, Insurance Company holding a valid Certificate of Registration issued by IRDA, or Housing Finance Companies regulated by National Housing Bank. All NBFCs are not entitled to accept public deposits. Only those NBFCs holding a valid Certificate of Registration with authorization to accept Public Deposits can accept/hold public deposits. The NBFCs accepting public deposits should have minimum stipulated Net Owned Fund and comply with the Directions issued by the Bank. There is ceiling on acceptance of Public Deposits. A NBFC maintaining required NOF/CRAR and complying with the prudential norms could accept public deposits as follows: Category of NBFC Ceiling on public deposits AFCs maintaining CRAR of 15% without credit rating. AFCs with CRAR of 12% and having minimum investment grade credit rating. 1.5 times of NOF or Rs.10crore whichever is less. 4 times of NOF LC/IC with CRAR of 15% and having minimum investment grade credit rating. 1.5 times of NOF AFC-Asset financing Company LC-Loan Company IC-Investment Company If a NBFC defaults in repayment of deposit, the depositor can approach Company Law Board or Consumer Forum or file a civil suit to recover the deposits Some other types of banks: An advising bank (also known as a notifying bank) advises a beneficiary (exporter) that a letter of credit (L/C) opened by an issuing bank for an applicant (importer) is available and informs the beneficiary about the terms and conditions of the L/C. The advising bank is not necessarily responsible for the payment of the credit which it advises the beneficiary of. Community development banks (CDBs) are banks designed to serve residents and spur economic development in low- to moderate-income (LMI) geographical areas. When CDBs provide retail banking services, they usually target customers from financially underserved demographics. a custodian bank, or simply custodian, refers to a financial institution responsible for safeguarding a firms or individuals financial assets. The role of a custodian in such a case would be the following: to hold in safekeeping assets such as equities and bonds, arrange settlement of any purchases and sales of such securities, collect information on and income from such assets, provide information on the underlying companies and provide regular reporting on all their activities to their clients A depository bank is a bank organized in the United States which provides all the stock transfer and agency services in connection with a depository receipt program. This function includes arranging for a custodian to accept deposits of ordinary shares, issuing the negotiable receipts which back up the shares, maintaining the register of holders to reflect all transfers and exchanges, and distributing dividends. Islamic banking refers to a system of banking or banking activity that is consistent with Islamic law (Sharia) principles and guided by Islamic economics. In particular, Islamic law prohibits the collection and payment of interest.In addition, Islamic law prohibits investing in businesses that are considered unlawful. A mutual savings bank is a financial institution chartered through a state or federal government to provide a safe place for individuals to save and to invest those savings in mortgages, loans, stocks, Bonds and other securities. An offshore bank is a bank located outside the country of residence of the depositor, typically in a low tax jurisdiction that provides financial and legal advantages. Banking Industry Strucure in India CENTRAL BANK A central bank, reserve bank, or monetary authority is the entity responsible for the monetary policy of a country. Its primary responsibility is to maintain the stability of the national currency and money supply, but more active duties include controlling subsidized-loan interest rates, and acting as a bailout lender of last resort to the banking sector during times of financial crisis. ). It may also have supervisory powers, to ensure that banks and other financial institutions do not behave recklessly or fraudulently. History The oldest central bank in the world is the Riksbank in Sweden, which was opened in 1668 with help from Dutch businessmen. This was followed in 1694 by the Bank of England, created by Scottish businessman William Paterson in the City of London at the request of the English government to help pay for a war. Activities and responsibilities Functions of a central bank implementation of monetary policy controls the nations entire money supply the Governments banker and the bankers bank (Lender of Last Resort) manages the countrys foreign exchange and gold reserves and the Governments stock register; regulation and supervision of the banking industry: setting the official interest rate used to manage both inflation and the countrys exchange rate and ensuring that this rate takes effect via a variety of policy mechanisms Monetary policy: Central banks implement a countrys chosen monetary policy. At the most basic level, this involves establishing what form of currency the country may have, whether a fiat currency, gold-backed currency, currency board or a currency union. Currency issuance: Many central banks are banks in the sense that they hold assets (foreign exchange, gold, and other financial assets) and liabilities. Central banks generally earn money by issuing currency notes and selling them to the public for interest-bearing assets, such as government bonds. Interest rate interventions: Typically a central bank controls certain types of short-term interest rates. These influence the stock- and bond markets as well as mortgage and other interest rates. Policy instruments The main monetary policy instruments available to central banks are: open market operation bank reserve requirement interest rate policy credit policy capital adequacy is important, it is defined and regulated by the Bank for International Settlements, and central banks in practice generally do not apply stricter rules. Open Market Operations: Through open market operations, a central bank influences the money supply in an economy directly. Each time it buys securities, exchanging money for the security, it raises the money supply. Conversely, selling of securities lowers the money supply. Buying of securities thus amounts to printing new money while lowering supply of the specific security. Reserve Requirement: Another significant power that central banks hold is the ability to establish reserve requirements for other banks. By requiring that a percentage of liabilities be held as cash or deposited with the central bank (or other agency), limits are set on the money supply. Interest Rate Policy: By far the most visible and obvious power of many modern central banks is to influence market interest rates. The mechanism to move the market towards a target rate is generally to lend money or borrow money in theoretically unlimited quantities, until the targeted market rate is sufficiently close to the target. Central banks may do so by lending money to and borrowing money from (taking deposits from) a limited number of qualified banks, or by purchasing and selling bonds. Capital requirements: All banks are required to hold a certain percentage of their assets as capital, a rate which may be established by the central bank or the banking supervisor. Capital requirements may be considered more effective than deposit/reserve requirements in preventing indefinite lending: when at the threshold, a bank cannot extend another loan without acquiring further capital on its balance sheet. Entry regulation Currently in most jurisdictions commercial banks are regulated by government entities and require a special bank licence to operate. Unlike most other regulated industries, the regulator is typically also a participant in the market, i.e. government owned bank (a central bank). The requirements for the issue of a bank licence vary between jurisdictions but typically incude: Minimum capital Minimum capital ratio Fit and Proper requirements for the banks controllers, owners, directors, and/or senior officers Approval of the banks business plan as being sufficiently prudent and plausible. Banking channels A branch, banking centre or financial centre is a retail location where a bank or financial institution offers a wide array of face-to-face service to its customers ATM. Mail. Telephone banking Online banking Bank crisis liquidity risk -the risk that many depositors will request withdrawals beyond available funds credit risk -the risk that those who owe money to the bank will not repay interest rate risk- the risk that the bank will become unprofitable if rising interest rates force it to pay relatively more on its deposits than it receives on its loans. Profitability A bank generates a profit from the differential between the level of interest it pays for deposits and other sources of funds, and the level of interest it charges in its lending activities. This difference is referred to as the spread between the cost of funds and the loan interest rate. Bank Regulations Bank regulations are a form of government regulation which subject banks to certain requirements, restrictions and guidelines. The objectives of bank regulation, and the emphasis are: Prudential to reduce the level of risk bank creditors are exposed to Systemic risk reduction to reduce the risk of disruption resulting from adverse trading conditions for banks causing multiple or major bank failures Avoid Misuse of Banks to reduce the risk of banks being used for criminal purposes, e.g. laundering the proceeds of crime To protect banking confidentiality Credit allocation to direct credit to favoured sectors . General Principles of Bank Regulation Banking regulations can vary widely across nations and jurisdictions. Thes are some of the general principles of bank regulation throughout the world Minimum Requirements Requirements are imposed on banks in order to promote the objectives of the regulator. The most important minimum requirement in banking regulation is minimum capital ratios. Supervisory Review Banks are required to be issued with a bank licence by the regulator in order to carry on business as a bank, and the regulator supervises licenced banks for compliance with the requirements and responds to breaches of the requirements through obtaining undertakings, giving directions, imposing penalties or revoking the banks licence. Market Discipline The regulator requires banks to publicly disclose financial and other information, and depositors and other creditors are able to use this information to assess the level of risk and to make investment decisions. As a result of this, the bank is subject to market discipline and the regulator can also use market-pricing information as an indicator of the banks financial health. Instruments and Requirements of Bank Regulation Capital requirement The capital requirement is a bank regulation, which sets a framework on how banks and depository institutions must handle their capital. The categorization of assets and capital is highly standardized so that it can be risk weighted. The capital ratio is the percentage of a banks capital to its risk-weighted assets. Reserve requirement The reserve requirement sets the minimum reserves each bank must hold to demand deposits and banknotes. The purpose of minimum reserve ratios is liquidity rather than safety. Corporate Governance Corporate governance requirements are intented to encourage the bank to be well managed and also to achieve certain objectives as to maintain it as a body corporate, maintaining minimum number of members and organisational structure etc. Financial Reporting, Disclosure and Prospectus Requirements Banks may be required to: Prepare annual financial statements according to a financial reporting standard, have them audited, and to register or publish them . Prepare more frequent financial disclosures. Have directors of the bank attest to the accuracy of such financial disclosures. Prepare and have registered prospectuses detailing the terms of securities it issues. Credit Rating Requirement Banks may be required to obtain