Knowledge Track

History of Bank Mergers Today we will read about the bank merger in this article and learn what has been the history of bank mergers and acquisitions in India. When an economy becomes obliged to merge banks, it will also try to know. Right now the topic of Bank Merger is very much discussed. In this article, we will try to know what the PCA Framework is and what rights of Indian banks the RBI gets after coming into the PCA framework.  Role In 1969, the Indira Gandhi government changed the picture of the banking sector of the country. First 14 and then in 1980 some more private banks were made government. There is no doubt that after the acquisition of banks, bank system reached remote areas and people and people got a strong and reliable system of savings and government relief. But now these government banks are facing trouble. As of December 2017, about 9 lakh crore rupees in these Indian banks. More than NPA has been done, which is breaking the back of public sector bank...

PRIVATE BANK VS PUBLIC BANK Ten new private banks were licensed in the country between 1980 and 2000. Since then, there was an atmosphere of competition and improvement in services in the banking sector. Along with private banks, facilities like ATM, mobile banking, internet banking, SMS alerts etc. also came on the market. It also impacted the functioning of public sector banks and brought about fundamental changes in the way they function. At present, there are 21 public banks and 22 private banks in the country. Apart from this, there are 56 Regional Rural Banks. About 70% of the state-owned banks are in the current banking market of the country. Due to the competition of private banks, the distance between spending and profits in the banking sector is steadily decreasing. According to a report, the profit per employee of private banks is 10.6-12.4% while in case of public banks it is only between 5.5% -7.00%. Altogether 10 lakh more employees are working in all the gove...

What are the benefits of bank merger? Experts believe that competition in the banking sector is constantly increasing in the coming time. In such a situation, it will not be easy for small banks to stay in the market. One advantage of bank mergers is the reduction in management expenses. This will reduce the number of people associated with the management at the above level, including the directors of banks. After the bank merger the number of surplus employees in the proposed bank can be reduced. Each other's resources can be used. Shared income from assets will help in reducing the losses of banks. Experts believe that if a bank is continuously in deficit then it must merger with another bank. If steps are not taken, then in the long-term it can prove to be dangerous for the country's economy. Benefits of Merging Banks For Banks: Big banks can adopt innovative standards and provide innovative products and services at acceptable levels of efficiency. Some g...

How to Control Inflation and Deflation Control on illegal activities, there are some illegal activities that cause significant inflation in a country. It is hoarding, smuggling, profiteering, black markets etc. In the case of smuggling of large quantities of staples like sugar, butter, wheat, rice etc are exported abroad illegally in order to obtain higher prices. Since oil and food prices can be so volatile, they are omitted from the core Inflation rate. Deflation happens in recession period. If it last for longer period, it harms the growth and development of the economy. Government should adopt policies similar to recession. Click here to know more about Inflation and Deflation Excess of effective demand, measures to control it imply a reduction in the total effective demand. Amongst the monetary measures we include higher bank rate, open-market operations, higher reserve requirements, consumer credit control, higher margin requirements, compulsory saving etc . ...

Why Deflation Is Worse than Inflation? First of all we should know what is Inflation and what is Deflation. Inflation Inflation is sustained increase in the general price level of goods and services in an economy over a period of time. Purchasing power of money is reduced, as we can purchase fewer goods in each unit of currency. Deflation Deflation is a decrease in the general price level of goods and services. Deflation occurs when the Inflation rate falls below 0% (a negative inflation rate). Why Deflation Is Worse than Inflation Deflation is worse because interest rates can only be lowered to zero. As businesses and people feel less wealthy, they spend less, reducing demand further. Prices drop in response, giving companies less profit.  Once people expect price declines, they delay purchases as long as possible. They know the longer they wait, the lower the price will be. This further decreases demand, causing businesses to slash prices...

Inflation and Deflation Inflation is when prices rise whereas, Deflation is when prices fall. You can have both inflation and deflation at the same time. In simple words, Inflation is a general increase in all prices across an economy, while deflation is a general decrease in all prices across an economy.  When taken to their extremes, both are bad for economic growth, but for different reasons. Most countries experience a slow increase in the overall price level, or inflation.  Deflation, however, is much rarer than inflation and typically occurs during periods of depression Type of Inflation There are five types of Inflation. Hyperinflation Asset Inflation Creeping Inflation Pernicious Inflation Galloping Inflation Hyper Inflation Hyperinflation is the worst type of Inflation . That's when prices rise more than 50 percent a month. Fortunately, it's rare. It's only caused by massive military spending.  Asset Inflation ...