Various Types of Banks in India
There are various types of bank which operates in our country India to meet the financial requirement of different categories of people engaged in different kind of financial activities like agriculture business profession etc.
On the basis of functions the banking institutions in India may be divided into the following types.
1. Central Bank of India-Reserve Bank of India.
2. Commercial Bank.
- Public sector banks.
- Private sector banks.
- Foreign banks.
3. Development Bank.( IFCI SFC SIDBI Nabard)
4. Cooperatives banks.
- State Cooperative Bank.
- Central Cooperative Bank.
- Primary credit Society.
5. Specialised Bank –
- EXIM Bank.
- SIDBI.
- NABARD.
Central Bank.
Central bank is the Apex Bank of a country.
In India Reserve Bank of India is Our Central Bank.
It is the most important Bank of a country whose function is to guide and regulate the banking system of the country.
This Bank does not deal with the general public.
It perform various functions for banking system of a country.
Click here to read more about Central Bank and its function.
Commercial Bank.
Commercial banks are the banking institutions that accept deposit and grant short term and long term loans to their customer.
They also perform various important functions.
Click here to read more about commercial banks and their functions.
There are various types of commercial banks in India.
- Public sector banks.
- Private sector banks.
- Foreign banks.
Public sector banks.
The banks whose majority states are in the hold of Government of India or Reserve Bank of India are known as public sector banks.
For example State Bank of India, Punjab National Bank, etc.
Private sector banks.
Private sector banks are those banks whose maturity of the share capital is held by private individual.
These banks are the registered as companies with Limited liabilities.
For example Bank of Rajasthan limited, Global Trust Bank, Vysya Bank, etc.
Foreigner banks
These banks are registered and have their headquarters in a foreign country that is outside the India but operates their branches in India.
The number of foreign banks operating in our country has increased since the financial sector reforms of 1991.
For example of foreign banks are HSBC American Express Bank, etc.
Development Bank.
Development Bank are the banks which offers medium and long-term capital for the purchase of machinery and equipment to the businesses.
They also provide latest technology, expansion and modernization related advice to the businesses.
IFCI and SFCs are the example of Development Bank in India.
Cooperative Bank.
Under the Cooperative Society Act some people come together and form a cooperative society to serve their common interest.
When these cooperative society engaged themselves in banking business than they are called cooperative banks.
For starting cooperative society as cooperative banks they have to obtained a licence from Reserve Bank of India.
There are following three types of cooperative banks.
- State Cooperative Bank.
- Central Cooperative Bank.
- Primary credit Society.
Primary credit societies.
Primary credit societies are the society which are formed by the borrower and non borrower member residing in one locality.
The operation of such societies are restricted to a small area.
The member of primary credit societies are known to each other and they are able to watch over the activities of each other to prevent the frauds.
Central Cooperative Banks.
When some of the primary credit society belonging to the same district came together and form a Cooperative Bank then these kind of banks are called Central cooperative banks.
This kind of banks provide loans to their members that is the primary credit societies.
The main function of the Central Cooperative Bank is to act as a link between primary credit society and the state cooperative banks
State cooperative banks.
These are the apex of the highest cooperative banks in all the state of the country.
The facility provided by the cooperative banks reaches the individual borrower from the state cooperative banks through the central cooperative banks and primary credit society.
Specialised Banks.
There are some banks which provide specialised knowledge and overall support for setting up business in specialised area of activities, these banks are called specialised Bank.
Export and import bank exam Set B and a birds are such a good examples of specialised Banks.
They engaged themselves in a special area of activity and thus they are called specialised banks.
EXIM Bank-Export and import Bank of India.
Export and import Bank of India is also known as Exim Bank.
It was established in 1982.
If you want to set up a business for importing goods or exporting goods, then exim bank and provide you required support and assistance.
The bank not only will provide you loans but also will provide you information about international markets.
The kind of information provided by Exim Bank includes opportunity for export or import, the risk involved in it and the competition to be faced extracts.
SIDBI-Small industrial development Bank of India.
Small industrial development Bank of India also known as SIDBI.
It was established on 2nd April 1990.
SIDBI provide small scale business loans on easy terms.
It also finances modernisation of small scale industries, knowledge of Technology and market activities.
Its goal is to provide all kind of assistance to the small scale industries and help them in a growing fastly.
NABARD-National bank for Agriculture and Rural Development.
National bank for Agriculture and Rural Development also known as a NABARD was established on 2nd July 1982.
NABARD is the Apex institution for financial and agricultural, rural sector development.
NABARD provide credit, both short-term and long-term to the agricultural and other related activities like Handloom, weaving fishing extra.
NABARD also provide financial assistance Especially to the Cooperative credit, in the field of small scale industries like agricultural based industries, Cottage and village industries and handcraft etc.