Financial Services In Manipur

Published Date: 02 Nov 2017

Introduction

Banking service has been the prime activity for the development of an economy in this blue planet. In recent decades the banking sector has, alternated between cycles of opening and closing branches, driven largely by shifting perceptions of the tradeoffs between the costs thereof, and their potential for capturing incremental customers and revenues. A branch, banking center or financial center is a retail location where a bank, credit union, or other financial institution (and by extension, brokerage firms) offers a wide array of face-to-face and automated services to its customers.

Manipur a state of both Geographically Advantageous and Disadvantageous

Manipur is located in the north-eastern part of India. It is bounded by Nagaland in the north, Mizoram in the south and Cachar district of Assam in the west. In the east it shares an international border with Upper Burma (presently, Myanmaar). Nesting in the slopes of the south flowing Sub-Himalayan ranges in the north east of India at the latitude 23.80º N to 25.68º N and longitude 93.03º E to 94.78º E. She has an area of 22,327 sq.km. Before few decades it was considered that Manipur is located in a very geographically disadvantageous location due to its hilly terrain and being in the extreme east from the mainland. But now with the advent of various changes and development now Manipur became the focus point for both South East Asian countries and the Mainland. It is because of India’s look East policy and the two Trans Asian highways which pass through Manipur connecting the two blocks of the globe. Manipur is the gateway to south East Asian countries and it is located in a very strategic location in terms of trade and commerce. When we talk about trade and commerce banking services has been the backbone which goes align with trade and commerce. But unfortunately the existing banking services in Manipur are not up to mark of desirable level.

Banking Services in Manipur.

There has been tremendous change in Manipur’s banking services during the last decade. There are more than sixteen nationalized and schedule banks in Manipur. They include HDFC, ICICI, Axis, PNB, PSB, BOI, Allahabad Bank, BOB, Central Bank, SBI etc., apart from this there are few RRB also working from long ago since the financial services evolved in Manipur. There are many forms of financial services in the form of micro finance in Manipur known as "Marup" in many form from the days of un-remember able. It is a form of financial services in an organized manner. Many of the banks are located in the valley area of the state mainly in the state capitals where by ninety percent of the state is hilly region. There is a need for the expansion of banking services in various hilly region of Manipur. There lie the challenges for the managers in the expansion of bank branches in far flung areas of Manipur. It comprises from macro environment of business in terms of political, legal, and social. Apart from this there are various unseen factor that has been the hurdle in the expansion of bank branches in Manipur.

Traditionally, the branch was the only channel of access to a financial institution's services. Services provided by a branch include cash withdrawals and deposits from a demand account with a bank teller, financial advice through a specialist, safe deposit box rentals, bureau de change, insurance sales (where it is allowed by law). Branching studies in the banking industry often investigate branch cost functions. Multibank holding companies (MBHCs) or branching was thought to have structural advantages because MBHC banks were better able (1) to provide services to larger borrowers, (2) attract managers with better training, and (3) allow specialization within lending functions. (Sangjeong Nam, 2008)

The importance of bank expansion decision and location choice models is more likely to increase recently because commercial banks are globalizing, and adopting improved technologies including internet banking, and markets are competitive. (Sangjeong Nam, 2008).

Financial institution in Manipur:

As it is being mentioned that there more than sixteen nationalized banks in Manipur and in addition to this there regional rural banks (RRB) also. The following table depicts about the exiting financial institution in Manipur.

Allahabad Bank

UCO Bank

Central bank of India

United Bank of India

Indian Overseas Bank

Axis Bank

Punjab and Sind Bank

HDFC Bank

State bank of India

ICICI Bank

Bank of Baroda

Vijaya Bank

Punjab national Bank

Bank of Maharashtra

Bank of India

Manipur Rural Bank

Manipur State co-operative

Banks in Manipur

The financial services offered by various financial services in Manipur can be categorized as follows:

Deposits

Loans and advances

Remittances

Miscellaneous

We can further classify the above mention forms of financial services as bellow,

1. Deposits:

Saving Bank Account

Fixed Deposit Account

Recurring Deposit account

Current account

Cash certificate

Stock invest

2. Loans and advances:

Loan against deposits

Overdraft against approved securities

Cash credit against stocks

Loans against gold ornaments

Discounting of trade bills

Letter of credit

Special loan facilities for weaker sections

3. Remittances:

Demand draft

Mail transfer

Telegraphic transfer

Traveler cheque

Gift cheque

Credit cards

Foreign remittances

4. Miscellaneous:

Safe Deposit Locker

Safe custody of sealed boxes, shares, documents etc

Collection of bills, cheque etc

Standing instructions to make regular payments like LIC,

School fees, subscriptions to magazines, clubs etc

Executor and Trustee services

Merchant banking

Hire Purchase / leasing

Portfolio management

Tax management

ATM

There has been only few services has been providing by the financial institution. Many of the financial services which had been the vital for the development of trade and commerce are in unsatisfactory manner. When we talk about the existing financial services in the light of India’s look east policy and Trans Asian highways the existing condition is of pathetic. There are various rooms for the improvement of existing financial environment in Manipur.

Political and legal aspects in Manipur

When we analyze the political and legal environment of Manipur in the light of banking industry there are several question need to be answered such as whether the existing environment is supportive to the banking business if not what are measures to be taken up and what are the steps that has already been taken up for the improvement of banking services in Manipur and lastly but not the least how can we visualized the quantum of banking business in Manipur in the near future in light of trade and commerce. These are the some of the issues that we can analyze in the political and legal environment of Manipur. There are many hidden unexpected disturbances while doing a business in Manipur from the political and legal environment. If we want to develop the existing banking business scenario to a world class standard then we need to rethink and restructure the existing environment.

Social and economic environment

Manipur being a multicultural and structural state she has diversified form of social and economic environment. She has a population of around thirty lacs out of which there is a maximum of seventy thousand Government employed population. The economic sustainability is very much dependent on the central funding of the government. Trade and commerce is in the premature stage therefore the development of trade and commerce for the sustainability of economies of the state is dependent on Government funding. The financial services support in the development of trade and commerce is not up to mark so here lies the role of financial services institute to play a major role in the development of trade and commerce. The banking services are associated with few working and business group only. Larger junk of the population are unbanked.