What are the Different types of bank in India?

Answer 1

There re various types of banks which operate in India to meet the financial requirements of different categories of people engaged with different sectors like agriculture, business, professions etc. On the basis of functions, the banking institutions in India may be divided into the following types.

1. Central Bank
2. Commercial Banks
3. Development Banks
4. Co-operative Banks
5. Specialized Banks

Central Bank- A bank which is entrusted with the functions of guiding and regulating the banking system of a country is known as its Central bank. Such a bank does not deal with the general public. It acts essentially as Government's banker, maintain deposit accounts of all other banks and advances money to other banks when needed. The Central Bank provides guidance to other banks whenever they face any problem. It is therefore known as the banker's bank.

Commercial Banks- Commercial banks are banking institutions that accept deposits and grant short-term loans, and advance to their customers. In addition of giving short-terms loans, commercial banks also give medium-term and long-term loans to business enterprises. Commercial banks are of three types which are- Public Sector Banks, Private Sector Banks and foreign banks.

1. Public Sector Banks are the banks where majority stake is held by the government of India or Reserve Bank of India. For examples- State Bank of India, Bank of Baroda, Punjab National Bank.
2. Private Sector Banks are the banks where majority share capital of the bank is held by the private individuals. These banks are registered as companies and have limited liabilities. For examples- ICICI Bank, HDFC Bank, Axis Bank.
3. Foreign Banks are the banks which has their branches in India but they are headquartered at foreign countries. For examples- Hong Kong and Shanghai Bank, Standard & Chartered Bank, Citi Bank, American Express Bank. Foreign banks in the name of foreign banks are working in India after the 1991 financial Sector Reforms. There are 47 foreign banks branches in India as on March 31, 2013.

Development Banks- Business often requires medium and long-term capital for purchase of machinery and equipment, for using latest technology, or for expansion and modernization. Such financial assistance is provided by the development banks. Some of the Development banks are as below-

Industrial Financial Corporation of India (IFCI)

State Financial Corporations (SFC)

Co-operative Banks- People who come together to jointly serve their common interest often form a co-operative society under the Co-operative Societies Act. "When a co-operative society engages itself in banking business, it is called a co-operative bank." There are generally three types of Co-operative banks.

1. State Co-operative Banks- These are the apex co-operative banks in all the states of the country. They mobilize funds and help in its proper channelization among various sectors.
2. Central Co-operative Banks- These banks operate at the district level having some of the primary credit societies belonging to the same district as their members.
3. Primary Co-operative Banks- These are formed at the village or town level with borrower members residing in one locality.

Specialized Banks- These are some banks which cater to the requirements and provide overall support for setting up business in specific areas of activity. for examples- EXIM Bank, NABARD and BMB.

Thank You

Varun Munjal ( tyariadda.com)

Answer 2

Types of banks in India 1. Scheduled banks 2. Non- Scheduled banks