Banks in India

Definition : A bank is a financial institution which deals with debts and credits. Their primary
function is to accept deposits cash from the people and use it for various purposes like
lending, development , business expansion etc.
Classification of Banks
On the basis of Ownership
Public Sector Banks

Private Sector Banks

Co-operative Banks

These banks are fully owned by Government

and primarily focussed on the development
of economy keeping social welfare in mind.
These are those banks which are owned and
run by private entities.
These banks are jointly run by State
Government and group of individuals.

On the basis of Law of RBI

Scheduled Banks

Non Scheduled Banks

These are those banks which are registered

under the 2nd Schedule of RBI Act 1934. In
order to be included in this schedule banks
has to fulfil certain conditions. These are
generally government owned ( Public Sector
Banks ) , Private Sector and Foreign Banks.
Co-operative Banks are not included in it but
can be included if they satisfy certain
conditions like having paid up capital and
reserves above 500,000.
These are those banks which are not
registered with 2nd Schedule of RBI Act
1934. These banks are not entitled to get the
privileges and privileges given by RBI to
Scheduled banks like these banks are eligible
for loans from RBI at Bank Rate , entitled to
get membership of clearing houses etc.

On the basis of exposure to certain fields

Commercial Banks

These are those banks whose main functions

are settling normal financial transaction
processes , taking different types of deposits
from people and then lend these funds to
borrowers , providing other financial services
like foreign exchange ,wealth management
etc.

Industrial / Development Banks

Agriculture/ Land Development Banks

Export-Import Development Bank

Housing Development Banks

These are those banks which are involved in

the development and modernisation of
Industrial sector by providing long term loans
to industries. These banks primarily collect
cash by issuing shares and debentures. Some
of the famous banks are Industrial Finance
Corporation of India (IFCI) , Industrial
Credit and Investment Corporation of India
(ICICI) , Industrial Development Bank of
India (IDBI) etc.
Agriculture is the core sector of our
economy so Government formed a separate
branch to deal with this sector. National Bank
for Agriculture and Rural Development (
NABARD ) is an apex development bank in
India.
Export-Import Bank of India (Exim Bank) is
the premier export finance institution in
India, established in 1982 under the ExportImport Bank of India Act 1981. Since its
inception, Exim Bank of India has been both
a catalyst and a key player in the promotion
of cross border trade and investment.
National Housing Bank ( NHB) is the apex
body which take care of all the matters
related with the housing finance. It is wholly
owned by RBI. Popular examples of these
banks are Housing Development Finance
Corporation ( HDFC), Dewan Housing
Finance Limited ( DHFL) etc.

So this was all about categorization of banks in India under various heads. We will soon
publish other relevant materials related with Indian Banking System.
See More Quiz : Quiz
Read More : Study Materials
Keep visiting us and Subscribe for Exams News Alerts directly into your email . If you
liked it then please Like Us and share the knowledge with others.