... maximize economies of scale and scope by 'bundling' the production of financial services. This heralded the advent of a new financial service organization, i.e. Universal Banking, bridging the gap between banking and financial-service-providing institutions. Universal Banks entertain, in addition to normal banking functions, other services that are traditionally non-banking in character such as investment-financing, insurance, mortgage-financing, securitisation, etc. Parallelly, in contrast to this phenomenon, non-banking companies too entered upon banking business. Universal banking usually takes one of the three forms i.e. in-house, through separately capitalized subsidiaries, or through a holding company structure. Three well-known countries in which these structures prevail are Sweden and Germany, the UK and the US. HISTORY OF UNIVERSAL BANKING IN INDIA Historically, India followed a very compartmentalized financial intermediaries allowed to operate strictly in their own respectively fields. However, in the 1980s banks were allowed to undertake various non-traditional activities through subsidiaries. This trend got momentum in ...

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