What Are The Different Banks In India?

Author : ArjitChalmela
Publish Date : 2020-09-29


What Are The Different Banks In India?

The banking industry is responsible for handling finances in a country which is inclusive of cash and credit. Banks are the institutional bodies which accept deposits and grant credit to the entities as well as play a massive role in managing the economic status of the country. Considering their importance in the economy is crucial, banks are under strict vigilance in every country.

In India, the RBI is the apex of the banking institutions which regulates the monetary policies in the country. Now, the bank industry is classified into four categories. It starts with a commercial bank, which is further divided into the public sector, private sector, foreign banks, and regional rural banks. On the other hand, cooperative banks get classified into urban and rural. Besides this, there is a new section called the payments bank.

Let us learn about these in detail –

Commercial banks

These regulated by the Banking Regulation Act, 1949, run a business model designed to make a profit. Their main function is to accept deposits and offer loans to the public, corporates, and Government. Now, commercial banks are of two kinds –

  • Public sector: These are nationalised banks and occupy almost 75 per cent of the total banking business. The Government holds the majority of the stakes of such banks. As for the volume, SBI is the largest public sector bank, and since its merger with five associate banks, it positions itself amongst the top 50 banks in India.
     
  • Private sector: These include banks where private stakeholders hold the primary stake. All the guidelines for these banks are laid by RBI. Some of the best private sector banks in India are HDFC Bank, ICICI Bank, Axis Bank, Yes Bank, Kotak Mahindra Bank, and so on.

Both these sectors have their internet banking and mobile app facilities today for making the financial experience smooth.

Small Finance Banks

This is a niche banking sector and aims to offer financial inclusions to sections of the society which are not provided by other banks. The primary consumers of small finance banks are micro industries, small and marginal farmers, unorganised sectors, and small business units. These banks come under Section 22 of the Banking Regulation Act, 1949 and governed by RBI Act, 1934 and FEMA.

Payments Banks

This is a new section under the banking sector and was conceptualised by RBI. Such banks accept only restricted deposits. The current amount acceptable is INR 1 lakh. They also provide services such as ATM cards, debit cards, mobile and internet banking.

Cooperative banks

These banks registered under the Cooperative Societies Act, 1912, is run by the elected managing committee. They work on a no-profit no-loss basis and serve entrepreneurs, small businesses industries, and self-employed in the urban area. In rural areas, they finance agriculture-based activities such as farming, livestock, and hatcheries.



Category :others
Author Website : HDFC Bank

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