TYPES OF BANKS

Scheduled Banks: 

A scheduled bank, in India, refers to a bank which is listed in the 2nd Schedule of the Reserve Bank of India Act, 1934. Banks not under this Schedule are called non-scheduled banks. 

Scheduled banks are usually private, foreign and nationalized banks operating in India. However, cooperative banks are allowed to seek scheduled bank status if they satisfy certain criteria. 

A scheduled bank is eligible for loans from the Reserve Bank of India at bank rate. They are also given membership to clearing houses. 

Non Schedules Banks: 

1. Other than the schedule banks the banks that formally obtains the licence from the banks 

2. All most all the existing banks in India are scheduled and the number of non-scheduled banks is almost nil. Only a countable number of few banking sectors have claimed exemption from the Second Schedule of banking Regulation Act. In the year 2006, only a total of three non-scheduled banks existed in India. By 2011 and counting, the number of non-scheduled banks in our country increased by one. 

Till today India has only four non-scheduled banks in existence. These four Non-scheduled banks under operation in India are : 

1. Akhand Anand Cooperative Bank Limited 

2. Alavi CoOperative Bank Limited 

3. Amarnath CoOperative Bank Limited 

4. Amod Nagrik Sahakari Bank Limited

COMMERCIAL BANKS: Commercial Banks are the institutions, setup as per the provisions of the Banking Regulation Act, 1949. These institutions ordinarily accept deposits from the people and advances loans. They also create credit. 

Scheduled banks and non-scheduled banks come in the category of Commercial Banks. 

SCHEDULED BANKS: 

- Scheduled banks are listed in the second schedule of the RBI and their minimum paid-up capital and reserve fund amounts to 25 lakh. - Every week these banks have to submit details of their activities to the RBI. 

NONSCHEDULED BANKS

- Paid-up capital of such bank is less than Rs 5 lakh, they are not listed in the second schedule of the RBI and RBI doesn‘t have any functioning control over them. 

- Every week these banks have to submit details of their activities to the RBI.

STRUCTURE OF SCHEDULED BANKS IN INDIA PUBLIC SECTOR BANKS: Managed, Controlled and Owned by the government. 

Public Sector Banks are divided into four groups: 

1. State Bank Group 

2. Nationalized Banks 

3. Regional Rural Banks 

4. Other Public Sector Banks

 CENTRAL BANK 

- RBI ( owned & Controlled by the Government) 

- Monopoly of note – issue 

- Act as a Banker to the Government 

- Act as a friend, philosopher & guide to all banks in the country.  

- Regulation & Control of credit. 

- Does not directly deal with public. 

- Indirectly help Agriculture & Industry.  

COMMERCIAL BANKS 

- Directly deal with public. 

- Accepting Deposits 

- Making business loans. 

- Offering basic investment products. 

 CO-OPERATIVE BANKS 

-  Voluntary Concern 

- An enterprise formed and directed by an association of users, 

-  applying within itself the rules of democracy and 

- Directly intended to serve both its own members and the community as a whole. 

DEVELOPMENT BANKS 

(a) IDBI - Industrial Development Bank of India 

- 1964 as subsidiary bank of RBI. 

- Direct assistance to large & medium Industries 

- Indirect assistance to tiny & small- Scale Industries. 

- 1976 de-linked from RBI. 

- Resulted in enlargement of its role in functioning. 

(b) SIDBI - Small Industries Development Bank of India 

- Started in April 1990 

- Subsidiary of IDBI. 

- Refinancing after loans granted by other financial Industries. 

- Discounting & rediscounting of bills arising out of sale of capital goods produced. 

- Rediscounting of short term bills in the small scale sector. 

(c) NABARD - National Bank for Agricultural & Rural Development 

-  Established in 1982. 

- Combining the agricultural credit department and rural planning and credit cell of the RBI & the Agricultural Refinance & Development Corporation. 

- Credit Functions. 

- Developmental Functions. 

- Regulatory Functions. 

(d) EXIM BANK - Export Import Bank 

- Established in 1982. 

- Foreign Trade 

- Financing of exports & imports. 

- Financing of Joint ventures in foreign countries. 

- Financing of export & import of machinery on lease basis. 

- Assisting the Indian party to a joint venture in a foreign country. 

- Raise resources through issue of bonds & Debentures in open market & RBI. 

(e) IIBI - Industrial Reconstruction Corporation of India(1971) 

- Industrial Reconstruction Bank of India(IRBI) with effect from March 1985. 

- March 1987 renamed as IIBI. 

- Grants loans & advances to Industries. 

-  Underwrites stocks, shares, bonds & debentures. 

- Guarantees loans & deferred payments on behalf of the industrial concerns. 

- Acts as an agent of the central & state Government, RBI, SBI & other financial Institutions. 

 Regional Rural Banks 

- Credit to weaker sections of the rural area i.e. to landless agricultural labourers, rural artisans, small & marginal farmers etc. 

 Local Area Banks 

-  Started in 1996. 

- With an objective to provide institutional mechanism in rural & semi urban areas for promoting saving & also for making credit facility available in such areas. 

- Established as Public Ltd. Co. in the Private Sector & promoted by individual, Company, trusts & Societies with minimum paid up capital Rs. 5 Crore. 

 State Bank & Other Public Sector Banks 

- The State Bank of India with its Seven Subsidiaries are often referred to as the State Bank group of Public Sector Banks, while the other 20 Public Sector ( 14 Nationalised on July 19, 1969 & 6 more Nationalised on April 15, 1980) are the other Public Sector Banks.