Banking – A Short Introduction

According to the Banking Firms Act 1949 ” Banking means accepting for the function of lending or investment of deposits of cash from public repayable on demand or otherwise and withdrawable by cheque, drafts order or otherwise”

Varieties OF Bank:

Scheduled Banks: Scheduled Banks in India constitute those banks which have been incorporated in the 2nd Schedule of Reserve Bank of India(RBI) Act, 1934. RBI in turn includes only these banks in this schedule which satisfy the criteria laid down vide section 42 (6) (a) of the Act.

As on 30th June, 1999, there were 300 scheduled banks in India having a complete network of 64,918 branches. The scheduled commercial banks in India comprise of State financial institution of India and its associates (eight), nationalized banks (19), foreign banks (45), private sector banks (32), co-operative banks and regional rural banks

Co-operative banks:A co-operative financial institution is a fiscal entity which belongs to its members, who are at the very same time the owners and the consumers of their bank. Co-operative banks are frequently created by persons belonging to the same neighborhood or professional neighborhood or sharing a typical interest. Co-operative banks generally provide their members with a wide variety of banking and fiscal companies (loans, deposits, banking accounts…)

Commercial banks:Commercial banks refer to a kind of financial institution which gives financial support to the trader of a nation. They provide short-term fiscal support for the business. They accept deposit from the traders and extend loans in the type of loan, money credit, overdraft and discounting of bills. There are two types of commercial banks found in India. These are scheduled and non-scheduled banks. The banks which have a paid-up capital of Rs. five Lakhs regarded as scheduled banks. The banks which have a paid-up capital of less than five Lakhs are named non-scheduled banks.

Public banks:The term public sector banks are utilized generally in India. This refers to banks that have their shares listed in the stock exchanges NSE and BSE and also the government of India holds vast majority stake in these banks.
They can also be termed as government owned banks
 

Private sector banks:Private banking in India was practiced since the starting of banking method in India. The initial private bank in India to be set up in Private Sector Banks in India was IndusInd Bank. It is a single of the fastest growing Private Sector Banks in India. IDBI ranks the tenths biggest development financial institution in the world as Private Banks in India and has promoted a planet class institution in India.

Non-scheduled banks: “Non-scheduled bank in India” indicates a banking organization as defined in clause (c) of section five of the Banking Regulation Act, 1949 (ten of 1949), which is not a scheduled financial institution”.

Function of Banks:

IntermediationPayment  techniqueProvider of numerous economic solutions

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