Banking

There are many excellent text books on Banking written by well known British and Americanwriters. However, none of these can claim to cover the entire course of study prescribed bythe Indian Universities. Moreover, most of these books are above the understanding of anaverage Indian student of Commerce and Economics. The present book is a humble effortin this direction.

On account of the growing importance of the banking industry, most of the Indian
Universities have introduced a special paper on Banking for their degree students. The
present volume has been made to cover the syllabi of B.Com., B.B.M., M.B.A., M.Com., M.A.,
L.L.B., etc. In addition, I hope, it will also be of benefit to candidates appearing for various
competitive examinations such as I.A.S., I.E.S., C.A., N.E.T., and I.I.B. examinations. The
present volume contains 19 chapters devoted mainly to the study of Commercial Banks,
Central Bank, Reserve Bank of India, State Bank of India, Money and Capital Markets,
Indian Banking Systems, Banker and Customer Relationship, Operation of Bank Accounts,
Collection and Payment of Cheques, Loans and Advances, Types of Securities, Modes of
Creating Charge, Guarantee, Letter of Credit, Accounts and Audit of Banks. The last chapter
contains multiple choice and short-type questions for the benefit of the candidates who want
a deeper insight into Banking.
While preparing this book, I have collected the relevant material from government
publications, published and unpublished sources, books, journals and articles by eminent
scholars. My Principal, colleagues and friends have offered me valuable suggestions in the
preparation of the manuscript. My sincere thanks are due to all of them.
I have a great pleasure in expressing my profound gratitude to my revered Research Supervisor
Dr. S. Mahendra Kumar M.A., Ph.D., Department of Economics, Manasagangothri, Mysore,
who has contributed a lot for improving the quality of this volume. He has always been a source
of constant inspiration to me as a friend, philosopher and guide. I also express my deep sense
of gratitude to Dr. Gopal Singh, Co-ordinator, DOS in Economics, Govt. Arts College, Hassan,
Dr. K. A. Rajanna, Prof. H.K. Lalithadavi, Sri. Mahalinga (Sapna Book House); Bangalore, H.S.
Ravindra, Channarayapattna, Prof. K.T. Krishnegowda, R. Radhakrishna Hassan; Sudharshan,

Marketing Manager and Srinath, Branch Manager, New Age, Bangalore; Prof. T.N. Prabhakar,
Principal, Government Arts College, Hassan and my friends for rendering assistance in various
forms in preparing the manuscript of this book.
I also express my grateful thanks to New Age International Publishers, New Delhi for
bringing out this book in a record time. Thanks are also due to Madusudan, DATA LINK,
Bangalore for typing the manuscript with efficiency and patience.
Last, but not the least, I acknowledge with a sense of gratitude the services of my wife,
Smt. Sujatha Somashekar and my son, N.S. Swaroop, who not only left no stone unturned
in providing me a congenial atmosphere for studies at home, but also relieved me from a
number of family responsibilities and even more, at times, directly helped me in my work.
Any suggestion for enhancing the value of the book from students and teachers, would
be most welcome and would be kept in view at the time of bringing out the second edition.
With these words, I present this book to students, who alone will judge its worth.
Ne. Thi. Somashekar

My nickname - interes