Different Types of Bank in India | Download PDF
Bank is a financial institution which allows financial transactions like deposit, withdrawal, credit and also carries out various other functions like insurance, Demat, stock exchange etc.
Non-Bank Financial Institutions deal with financial transactions but do not give the same facilities as a bank however can give certain selective facilities like loans, insurance etc. NBFC non-banking financial companies
UnBank Financial Institutions are the ones which are not part of the organized systematic banking system neither are non-Bank financial companies.
They provide services to people who do not have access to banking system. Local money lenders are the best examples of these institutions. The Pradhan Mantri Jan Dhan Yojana PBJDY is one of the initiatives of the Government of India to convert unbanks into banks by financial inclusion policy.
Types of banks
- Central Bank – every country has a central bank who is the regulator of all finances including deposits and credits from the public exchequer as well as the total revenue collected from the taxes paid by the citizens of the nation. For example the Reserve Bank of India (RBI) in Mumbai is the central financial regulatory authority of the nation. Similarly the US has the Federal Reserve. The European Central Bank (ECB), which is situated in Frankfurt, is such institution for the European Union. There is also an international version of the central bank which regulates monetary transactions of all the central banks of the world. The International Monetary Fund (IMF) is one such example.
- Scheduled bank – scheduled banks or scheduled commercial banks in India are listed in the second schedule of the RBI act 1934. Today India has a total of about 90 scheduled commercial banks. Scheduled commercial banks are of the following types:
> Public sector banks (PSP) like State Bank of India, Punjab National Bank, etc.
> Private sector banks like ICICI, Axis Bank, HDFC Bank etc.
> Regional rural bank (RRB)
- Nonscheduled banks – these banks are not scheduled in the RBI listings. Cooperative banks are one example of nonscheduled banks.
- Development Banks – these banks are the banks that work for the promotion of economic activities as well as for employment generation.
NABARD in India is one such example which is an Agricultural Development Bank.
SIDBI – the Small Industries Development Bank is another example of Development Banks which aid in the financing of the small industries.
IDBI is the Large Industries Development Bank.
Exim banks help in the financial aiding of the import and export companies.
The National Housing Bank NHB is also a Development Bank which helps individuals to get credit facilities for the purpose of personal housing.
- Retail banks – these are consumer oriented banks Which gift financial services to any customer for example, the State Bank of India, the ICICI Bank etc.
- Social banks – these banks target social welfare and for providing banking facilities to the weaker and low income section of the society.
- Investment banks – these banks provide investment facilities to large magnanimous companies and corporate houses and helps issue their shares and debentures.
- Commercial banks – any bank promoting business activities like giving loans and investment opportunities is a commercial bank. These banks are profit oriented banks.
- Noncommercial bank – cooperative banks are noncommercial banks who work at a nonprofit business model social welfare being their paramount motive
- Mobile banks – this is a newer form of Banking which allows versatility and speedy transactions. Following are some of the instruments of mobile banking:
The IMPS ( immediate payment services ) is an extremely beneficial facility which can facilitate interbank as well as intra Bank Electronic fund transfer with the use of mobile phones. This is unlike the preexisting electronic fund transfer system which required a specified time window within which transactions could be undertaken.
The UPI ( unified payments interface) is a new mobile application launched by the government of India.
Another form of mobile banking is the USSD ( unstructured supplementary service data).
IMT( immediate mobile transfer)
- Internet banking – this form of Banking allows a individual to perform almost all basic banking functions with the help of a computer and Internet network facility. This does not require ask to go to a physical Bank or stand in lines. It is an extremely speedy and efficient form of Financial Service which is the future of modern banking.
- Local area Bank LAB - Regional rural banks also called Gramin banks which provide banking services to a localized area.
- Wholesale banking – these banks provide banking facility to large corporate houses are companies in a wholesale manner.
- Postal banking – since there are post offices in almost every remote area in India it is extremely wise to include provision of financial services Financial Services as one of the functions of these post offices in order to take the banking facilities to the remotest parts of the country. These banks function within the post office under the name of India Post.
- Payments Bank – These banks mostly deal with payment activities up to a sum of Rupees 1 lakh. They accept payments directly from the customer and transfer it to the concerned payees. Since this mode of Banking is extremely uncomplicated and quick, there is minimum risk of fund leakage and corruption which is a major reason why payment banks where licensed by the Reserve Bank of India in the first place. PayTM and Airtel Payments Bank are examples of payments back in India.
- Ultra small banks – these banks operate with the help of business correspondents (BC) who are individuals appointed by banks to act as a link between the actual bank and the people. This form of Banking is specially scene in extremely remote areas of India where the organized banking system has not been able to penetrate