Banks in India
1. Central Bank - The RBI
The Reserve Bank of India (RBI) is the Central banking authority. It is also called the Apex Bank or the Banker's Bank. It functions under an Act called The Reserve Bank of India Act, 1934. All the banks and other financial institutions operating in India come under the monitoring and control of the RBI. It controls the banking sector in India through an Act called 'The Banking Regulation Act, 1949'. RBI is fully owned by the Government of India. It is headed by a Governor appointed by the Central government.
2. Commercial Banks
Commercial Banks are the most widespread banks in India. They provide major banking products and services in India. A commercial bank is run on commercial lines, for profits of the organisation. In India Commercial Banks can be broadly divided into :
Non-Scheduled Commercial Banks : Non-scheduled Commercial Banks in India mean a banking company as defined in clause (c) of section 5 of the Banking Regulation Act, 1949 but not listed in the 'Second Schedule' of the RBI.
3. Development Banks
Development Banks are financial institutions established to advance loans or finance on subsidised interest rates. Such lending is sanctioned to promote and develop important sectors like agriculture, industry, import-export, housing and allied activities. Development Banks in India are classified into
(i) Industrial Development Banks :
With a need of Financial Inclusion in the country, RBI and Central Government has taken many steps at different times. In the same progress, RBI has given licence for specific functions to two different sets of banks namely Small Finance Banks and Payment Banks.
4. Small Finance Banks
Small Finance Banks are physical banks whose aim is to provide basic banking products such as deposits and supply of credit, but in a limited area of operation. Small banks are expected to meet credit and remittance needs of small businesses, farmers, micro and small industries, unorganized sector ,low income households and migrant work force through high technology-low cost operations.
5. Payment Banks
The main objective of the payment bank is providing small savings accounts and payments or remittance services to low income households,small businesses,other unorganized sector entities and other users.