Types Of Banks

Friends, inward this postal service nosotros shall beak over well-nigh diverse types of banks. This postal service volition survive helpful for those people who are writing banking exams together with for those people who are aid the Bank Interviews. Happy Reading 🙂

Following are the diverse types of Banks :

  1. Commercial Banks : Usually, a bulk of the Commercial Banks are articulation stock companies. They are every bit good known every bit deposit banks. These banks tin every bit good survive established nether a particular legislation / act, a character. They tin survive established either a populace sector or a private sector bank. They may adopt either a unit of measurement banking organisation or a ‘branch banking system’. Further, these commercial banks tin survive categorized every bit ‘domestic banks’ or ‘foreign banks’ depending upon their origin. The primary functions of these banks are accepting deposits, lending coin through overdraft loans, discount of bills etc, inward addition, they every bit good hollo several non-banking activities.
  2. Agricultural Banks : Since financing the agriculture has non been viewed past times most of the commercial banks every bit a profitable draw of piece of occupation organisation suggestion (or every bit an unviable proposition), they could non concentrate on agriculture together with / or rural areas inward many parts of the earth including India. This province of affairs was led to the emergence of a vast credit gap inward rural together with / or agricultural sector. Further, this situation, alongside others every bit good relegated the rural evolution to the backyard inward many countries, admit this situation, agricultural banks were established inward many developing countries with a thought to come across the banking needs (i.e., credit, deposit etc) of the agricultural sector.
  3. Industrial Banks : In the lite of the Definition of a bank, the “industrial banks” are, strictly speaking non considered every bit “banks”. The uncomplicated argue existence that the “industrial banks” volition non bring the deposits from the populace but simply provides medium together with long-term credit for industrial purposes. These banks volition survive permitted to borrow funds from diverse sources for their operations. In lodge to survive called whatever establishment every bit a “bank” it must fulfill 2 basic functions such every bit “accepting the deposits” together with “lending”. Since, the industrial banks are non fulfilling these 2 basic objectives they tin survive treated every bit “banks”. But, economist’s academicians get got treated the industrial banks similar a bank for give-and-take purpose. The industrial banks are simply “term lending institution” which render long-term together with medium term finance for industial purposes. For example, State Finance Corporations (SFCs), Industrial Development Bank of Republic of Republic of India (IDBI) come upward nether the category of “Industrial Banks”.These institutions are really pop inward Germany.
  4. Cooperative Banks : Cooperative Banks are particular type of fiscal establishment established on the footing of cooperation. These establishment deals inward ordinary banking business. These institutions tin survive established either inward rural areas or urban areas or metor cities to come across the specific requirements or purposes of their members / shareholders. These banks tin survive of dissimilar types such every bit agricultural cooperative banks, industrail cooperative banks, employee’s cooperative banks etc.
  5. Indigenous Banks : According to the Indian Central Banking Enquiry Committee, an indigenous banker / banking concern has been defined every bit “an private or private theatre which recieves deposits, deals inward hundies or engages itself inward lending money”. They get got been operating inward dissimilar parts of the province with varying names. For  example, inward Chennai metropolis they are called every bit “Chettys”, inward Northen Republic of Republic of India they are called every bit “Sahukars”, “Khatries” together with “Mahajans”, inward Bombay metropolis they are known every bit “Marwaris” together with “Shorotfs”, In westward Bengal these indigenous bankers are called every bit “Banias” together with “Seths”. Some of these indigenous bankers bargain inward banking business: together with exactly about indigenous bankers combine theri banking draw of piece of occupation organisation with trade. In addition, they every bit good straight or indirectly participate inward speculative activities. The primary source of their upper-case alphabetic lineament is theri ain upper-case alphabetic lineament or / together with that of theri theatre unit of measurement members’ or relatives. These bankers were non regulated. Further, the Reserve Bnak of Republic of Republic of India does non command them. The latest together with detailed statistics well-nigh theri activites are non availabe to assess their role inward the banking industry.
  6. Foreign Banks or Exchange Banks : Foreign banks are those Banks which are unusual inward rootage together with which get got their caput offices located exterior India. They are every bit good knwon every bit central banks. their principal business office is to brand international payments through the purchased together with sale of central bills. These banks every bit good produce ordinary banking draw of piece of occupation organisation such every bit accepting of deposits together with advancing loans. Initially, exactly about of these banks were started simply to finance India’s unusual trade. These banks are for quite sometime, enjoying a pregnant percentage inward the champaign of unusual merchandise finance. But, their percentage inward the full book fo bankign draw of piece of occupation organisation inward Republic of Republic of India is highly insignificant. THese banks get got exerted a tremendous influence on the evolution of Indian articulation stock banking together with the increment of organized coin marketplace inward India.
  7. Central Bank : The fundamental banking concern is the apex fiscal institute inward the banking together with fiscal organisation of a country. It is the caput of the banking system. It acts every bit the leader of the coin market. It controls, monitors, supervises together with regulates the activities of the commercial banks. It controls the book of currency past times its sole correct of issuing currency notes. The oldest fundamental banking concern was Ricks Bank of Sweden established inward 1656. India’s fundamental banking concern is Reserve Bank of Republic of Republic of India (RBI) established inward the twelvemonth 1935 together with nationalized inward 1949. The fundamental, object of the RBI is to discharge purely fundamental banking functions inward Indian coin market. A pregnant object of the banking concern has every bit good been to aid the planned procedure of the evolution of economy. The importance of fundamental banking institutions has so gained universal recognition together with so at nowadays occupies a unique seat inward the economical map of every country. You tin read to a greater extent than details well-nigh RBI from here.
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