Organisational Setup and Management in Commercial Banks: Key Functions and Features
Explore the essential functions and features of bank management, including planning, organizing, staffing, directing, and controlling. Learn about the organizational setup of commercial banks, highlighted by a high degree of departmentation, regional/zonal offices, and hierarchical management. Discover the recommendations for restructuring the organizational setup of nationalized banks as suggested by the Banking Commission appointed by the Government of India in 1969.
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Presentation Transcript
MANAGEMENT AND ORGANISATIONAL SET-UP OF COMMERCIAL BANKS
Functions of bank management Planning Organising staffing directing coordinating controlling
FUNCTIONAL AREAS OF BANK MANAGEMENT Deposit Mobilisation Financial Management Credit Management Profit Evaluation Liquidity Management Investment Management Marketing Management Portfolio Management
ORGANISATIONAL SET-UP OF COMMERCIAL BANKS Organizational set up is defined as a system in which individuals and groups operating at different levels perform the tasks assigned to them within the frame work of delegated authority and responsibility which are rationally coordinated to achieve the desired organisational goals . An organisational set up consists of people who carry out differentiated tasks which are coordinated to contribute to organization's goals.
Features of Organisational set-up Commercial Banks 1. High Degree of Departmentation 2. Regional or Zonal Offices 3. Hierarchical Management
Banking Commission Recommendation on Restructuring Organisational Set-up of Nationalised Banks Government of India appointed the Banking Commission in February 1969 under the Chairmanship Sh R.G.Saraiya to study the organisational structure of the nationalized banks and to make suggestions to remodel the organisational structure to suit the needs of Indian society. The following important recommendations are given by the Banking Commission:
Continued. 1. The organisational structure of all the nationalised banks should be on the lines of that of the State Bank of India. 2. The Commission recommended the constitution of regional boards with statutory powers and responsibilities as in case of SBI 3. The head office of nationalised banks should be main concerned with planning and budgeting of setting up of goals for zonal offices in performing their functions.
4. There should be functional departments at head office level of nationalised bank dealing with budgeting and profit planning, economic research management development, public relations, organisation and methods, legal matters alongwith general departments like control over branches, central accounts. 5. The main function of top executive must be relation to policy formulation.
6. A zonal office should be there to control and guide the 200 to 300 branches. 7. The branch manager should be relieved from day-to-day activities to enable him to devote sufficient time to plan, coordination, control, training, public contacts and business development. 8. There should be separate departments for deposits, collections, remittances, safe deposit vaults, advisory services, accounts, cash clearing, advances etc.
Business Group at Corporate Level Corporate Banking Group-The group consists of three Strategic Business Units. These are: I.
II. National Banking Group-The National Banking Group serves large and medium sized corporate sector, small industrial agricultural and institutional customers. The Local Head Offices constitute the Strategic Business Units under this group. Each LHO having two network of branches namely. a) Development and Personal Banking b) Commercial Banking Network
III. International Banking Group International banking for Indian Customers International banking for Foreign branches IV. Associates and Subsidiaries
