Banking is no new term to anyone be it homemakers, salaried people, businessmen, farmers, students or some other profession. Especially the Indian homes are well connected with banks and banking. The banking business takes care of the finances of a nation which includes credit and money.
Banks are the backbone of the economy in a nation and hence severe rules and regulations are imposed on the business as usual of banks. The major exchanges that happen at banks are giving credits and accepting deposits from different entities.
RBI is the apex body that governs and screens bank across India. It is responsible for regulating the monetary approach in the nation.
Bank classification in India
There are two general categories under which banks are classified in India-SCHEDULED AND NON-SCHEDULED BANKS.
The scheduled banks include COMMERCIAL BANKS AND COOPERATIVE BANKS. The commercial banks include REGIONAL RURAL BANKS, SMALL FINANCE BANK, FOREIGN BANKS, PRIVATE SECTOR BANKS, and PUBLIC SECTOR BANKS. PAYMENTS BANK is a new prologue to the category.
Cooperative banks include URBAN AND RURAL BANKS.
Let us understand the nomenclature better:
- SCHEDULED BANKS are the banks which are covered under the second schedule of the Reserve Bank of India Act, 1934. To fit the bill for being a scheduled bank, at least 5 lakh settled up capital is required on the bank’s behalf. The RBI lends credit to these banks at bank rate as and when required.
- COMMERCIAL BANKS are regulated and managed under the Banking Regulation Act, 1949. These are benefit making banks based on their business model. Allowing credits to the government, general open, and corporate and accepting deposits considers the essential capacity.
There are four types of commercial banks:
- Open SECTOR BANKS
These banks for more than 75% of the absolute banking business in the country. They are called nationalized banks. The government holds the majority stakes at these banks. Post-merger, SBI is the largest open sector banks by volume. It likewise positions among the main 50 banks on the planet.
There are 21 nationalized banks in India, they are:
1. STATE BANK OF INDIA
2. BANK OF INDIA
3. ALLAHABAD BANK
4. BANK OF MAHARASHTRA
5. CANARA BANK
6. INDIAN OVERSEAS BANK
7. IDBI BANK
8. ORIENTAL BANK OF COMMERCE
9. CENTRAL BANK OF INDIA
10. CORPORATION BANK
11. ANDHRA BANK
12. UCO BANK
13. BANK OF BARODA
14. UNION BANK OF INDIA
15. UNITED BANK OF INDIA
16. VIJAYA BANK
17. DENA BANK
18. INDIAN BANK
19. PUNJAB and SIND BANK
20. PUNJAB NATIONAL BANK
21. SYNDICATE BANK
2. PRIVATE SECTOR BANKS
Private shareholders hold majority stakes in private sector banks. Reserve Bank of India sets out all the rules and regulations. Following are the private sector banks in India:
1. HDFC BANK
2. ICICI BANK
3. AXIS BANK
4. YES BANK
5. INDUSIND BANK
6. KOTAK MAHINDRA BANK
7. DCB BANK
8. BANDHAN BANK
9. IDFC BANK
10. CITY UNION BANK
11. TAMILNAD MERCANTILE BANK
12. NAINITAL BANK
13. CATHOLIC SYRIAN BANK
14. FEDERAL BANK
15. JAMMU AND KASHMIR BANK
16. KARNATAKA BANK
17. DHANALAXMI BANK
18. SOUTH INDIAN BANK
19. LAKSHMI VILAS BANK
20. RBL BANK
21. KARUR VYSYA BANK
3. FOREIGN BANKS
A bank operating as a private entity in India however headquartered in a Foreign nation is a foreign bank. They are governed by both the nation they are located in too the nation they have headquarters in. Some of these are:
1. CITI BANK
2. STANDARD CHARTERED BANK
3. HSBC BANK
4. REGIONAL RURAL BANKS
These banks were established for the most part to help the weaker and lesser fortunate section of the society like peripheral farmers, laborers, little enterprises etc. they primarily operate at regional levels at different states and may have branches in urban areas also. Their fundamental features are:
1. Supporting rustic and semi-urban region monetarily
2. Pension conveyance and Wage disbursement of MGNREGA workers
3. Added banking facilities like locker, cards-debit, and credit
5. Little FINANCE BANKS
These banks cater to a niche segment in the society and help with money related consideration of sections which are not taken care of by other leading banks. They care for miniaturized scale industries, unorganized sector, little farmers etc. RBI and FEMA are the governing bodies of these banks.
These are:
1. AU SMALL FINANCE BANK
2. CAPITAL SMALL FINANCE BANK
3. FINCARE SMALL FINANCE BANK
4. EQUITAS SMALL FINANCE BANK
5. ESAF SMALL FINANCE BANK
6. SURYODAY SMALL FINANCE BANK
7. UJJIVAN SMALL FINANCE BANK
8. UTKARSH SMALL FINANCE BANK
9. NORTHEAST SMALL FINANCE BANK
10. JANA SMALL FINANCE BANK
6. COOPERATIVE BANKS
Run by the elected members of an overseeing committee and registered under the Cooperative Societies Act, 1912 are the cooperative banks. These are no-benefit, no-misfortune banks and for the most part serve entrepreneurs, industries, independent ventures, and self-employment.
7. PAYMENTS BANK
This is a new and forthcoming model of banking in India. It has been conceptualized and signed-off by RBI with restricted operations. Limit of Rs. One Lakh is acceptable per customer by these banks. Like other banks, they additionally offer para-banking services like ATM cards, Debit-Credit cards, net-banking, mobile banking etc.
