Types Of Banks In India

Types Of Banks In India

Types Of Banks In India: Banking in India, in the modern sense, originated in the last decade of the 18th century. The first banks were The Bank of Hindustan, which was established in 1770 and liquidated in 1829–30; and The General Bank of India, established in 1786 but failed in 1791. Indigenous banking in India began in the first half of the 19th century with The Presidency Banks, which later became The Imperial Bank of India and finally The State Bank of India. Foreign banks first started operating in India in the early 19th century. The oldest bank still in existence in India is the State Bank of India, which originated as The Bank of Bengal in 1806, which later became The Imperial Bank of India.

There are broadly four types of banks in India –

1. Public Sector Banks (PSBs)
2. Private Sector Banks (PSBs)
3. Foreign Banks
4. Co-operative Banks

Public Sector Banks (PSBs): Public sector banks are those banks where the majority stake is held by the government. Some of the major PSBs in India are State Bank of India, Punjab National Bank, Bank of Baroda, Canara Bank, etc. PSBs were nationalized in the year 1969 and 1980. The main objective behind the nationalization of banks was to spread the banking facilities to rural areas and to increase the agricultural credit.

Private Sector Banks (PSBs): Private sector banks are those banks where the majority stake is held by the private players. Some of the major private sector banks in India are HDFC Bank, ICICI Bank, Axis Bank, Kotak Mahindra Bank, etc. These banks were set up post the nationalization of banks with an objective to provide competition to state-run banks and also to tap the growing needs of the Indian customer base.

Foreign Banks: Foreign banks are those banks which are operate in India but are registered and headquartered in another country. Some of the major foreign banks operating in India are HSBC, Citibank, Standard Chartered Bank, Deutsche Bank, etc. These banks came to India after the liberalization of the banking sector in the early 1990s. They provide a higher level of customer service and have a greater focus on the retail sector.

Co-operative Banks: Co-operative banks are those banks which are owned and operated by a group of people with a common economic interest. These banks are registered under the Cooperative Societies Act. Some of the major co-operative banks in India are Santosham Co-operative Bank, Mangalore Central Co-operative Bank, etc. These banks play an important role in rural areas where access to banking services is limited.

10 important topics to study in “Types of Banks in India”

1. The types of banks in India are Commercial banks, Regional rural banks, Cooperative banks, and Scheduled banks.
2. Commercial banks are the most common type of bank in India and include both private and public sector banks.
3. Regional rural banks are smaller banks that operate in specific geographical regions.
4. Cooperative banks are owned and operated by their members and offer banking services to a specific group of people.
5. Scheduled banks are those that have been included in the Second Schedule of the Reserve Bank of India Act, 1934.
6. Public sector banks are banks that are owned and operated by the government.
7. Private sector banks are banks that are privately owned and operated.
8. Foreign banks are banks that are headquartered in another country but operate in India.
9. Non-banking financial companies are financial institutions that provide banking services but are not banks.
10. Payment banks are a new type of bank in India that provide limited banking services such as accepting deposits and transfers.