Search your Topic HERE....

October 16, 2016

Banking Awareness 2016 in Simple Language - Lesson 6

Leave a Comment

sponsored links

Friends, till yesterday in our Banking Awareness 2016 in Simple Language lesson series, we have learnt about the Banking System in India and complete details of the Reserve Bank of India (RBI) including it's Structure, Functions, Methods of Credit Control and it's policies. From today's lesson, we shall learn the core topics of Indian Banking Industry.

Banking Awareness 2016 - Types of Banks

All of us know, the we get our money from our work place. Workplace gets money from Banks. Banks get money from RBI. But do you know, who is above RBI ? Which organization looks after RBI ? It is Finance Ministry. The finance ministry is an important ministry within the Government of India concerned with the economy of India. In particular, it concerns itself with taxation, financial legislation, financial institutions, capital markets, centre and state finances, and the Union Budget. If you want to describe the types of banks, then you should start with the Ministry of Finance. Check the below chart.
We already know about the Ministry of Finance and the Reserve Bank of India (RBI). So let us know about the Scheduled Banks and Non- Scheduled Banks. The banks can be classified as 'scheduled banks' and 'non-scheduled banks' based on their 'scheduled status'. A 'Schedule' means a list. A 'Scheduled Bank' is a status conferred on a commercial bank and a state cooperative bank by the Reserve Bank of India. The Reserve Bank of India will issue a notification when the banks are included in its Second Schedule of the RBI Act 1934. Let's try to understand the differences in simple points. 

Scheduled Banks
  1. These are listed in the 2nd Schedule of the RBI Act 1934.
  2. Paid-up capital and collected funds must not be less than 5 lakh.
Non-Scheduled Banks
  1. These are not listed in the 2nd Schedule of the RBI Act 1934.
  2. Paid-up capital and collected funds must be less than 5 lakh.
    • Ex : "Jammu & Kashmir Bank"
Commercial Banks
Commercial banks may be defined as any banking organization that deals with the deposits and loans of business organization. It issues bank cheques and drafts, as well as accept money. It also acts as moneylender, by way of loans and overdrafts.

Public Sector Banks
Public Sector Banks (PSBs) are banks where a majority state (i.e., more than 50%) is held by the government. The shares of these banks are listed on stock exchanges. There are a total of 27 PSBs in India. [19 Nationalized Banks + 6 State Bank Group + 1 IDBI Bank (Other Public Sector Indian Bank) + 1 Bharatiya Mahila Bank.
  1. Allahabad Bank
  2. Andhra Bank
  3. Bank of Baroda
  4. Bank of India
  5. Bank of Maharashtra
  6. Canara Bank
  7. Central Bank of India
  8. Corporation Bank
  9. Dena Bank
  10. Indian Bank
  11. Indian Overseas Bank
  12. Oriental Bank of Commerce
  13. Punjab and SIndh Bank 
  14. Punjab National Bank
  15. Syndicate Bank
  16. UCO Bank
  17. Union Bank of India
  18. United Bank of India
  19. Vijaya Bank
  20. State Bank of India
  21. State Bank of Bikaner & Jaipur
  22. State Bank of Hyderabad
  23. State Bank of Mysore
  24. State Bank of Patiala
  25. State Bank of Travancore
  26. IDBI Bank
  27. Bharatiya Mahila Bank
Important Points to Note :
  • In 2011 IDBI bank and in 2014 Bharatiya Mahila Bank were nationalized with a minimum capital of Rs 500 cr.
  • The merger of 5 associate banks (State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala and State Bank of Travancore) and Bharatiya Mahila Bank into the State Bank of India (SBI) was approved by Union Cabinet on 15 June 2016.
  • The India Post Payments Bank (IPPB) is a proposed state-owned commercial bank in India. The bank would use the existing network of the public-sector postal service, India Post.
Private Sector Banks
  • These are the banks in which majority of the share capital of hte bank is held by private individuals. These banks are registered as companies with limited liability. Ex. ICICI, Axis Bank, HDFC etc.
Foreign Banks
  • These banks are registered and have their headquarters in a foreign country but operate their branches in our country. Ex. HSBC, CITI Bank, Standard Chartered Bank etc.
 Regional Rural Banks
  • RRBs established on 26th September 1975 under the RRB act 1976. The objective of RRBs is to ensure sufficient institutional credit for agriculture and other rural sectors. As per RRB ACt, 1976. Now authorised capital of each RRB is to be 5 crore & not less than Rs. 25 lakhs. Issued Capital is Maximum of Rs. 1 crore & not less than Rs. 25 lakhs.
  • Note : RRBs are jointly owned by GOI (Govt of India), the Concerned State Govt. and Sponsor Banks (27 Schedule Commercial Banks and One State Co-operative Banks); the issued capital of RRB is shared by the owners in the proportion of 50%, 15%, 35% respectively. 
  • "Prathama Bank" is the 1st RRB in India located in city of Moradabad (U.P). As of today, Total 56 RRBs operationing in India & Total Branches 20059, in 26 States & UT Puducherry. 
Co-operative Banks
  • A Co-operative Bank is a financial entity which belongs to its members, who are the same time the owners and the customers of their bank and often created by persons belonging to the same, local or professional community or sharing a common interest. It provides banking and financial services on "No-Profit-No-Loss" basis. 
  • Specialist for agriculture & small scale industry.
  • Governed by Co-operative Societies Act. 
  • Anyona Co-operative Bank Ltd, (ACBL) is the fist co-operative Bank in India. It is located in Vadodara (Gujarat). 
  1. UCB (Urban Co-operative Bank) 
    • Primary (Urban) co-operative banks are registered and governed by state government but the matters related to banking are governed by RBI directives as this come under provision of Banking Regulation Act 1949. Traditionally the area of UCBs is confined to metropolitan, urban or semi-urban centres and centre to the needs of small borrowers including SSIs, retail traders, small entrepreneurs, professionals and the salaried class. 
  2. SCB (State Co-operative Bank)
    • As name suggests, these are the co-operative banks at the state level. 
    • Note : These come under 2nd schedule of RBI act - 1934.
That's all for now friends. In our next post we shall learn the Headquarters and Taglines of all Public Sector, Private Sector, Foreign and Regional Rural Banks with some memory tricks. Happy Reading :)

Important Note  : As the exams are approaching, I am planning to post 2 lessons per day from tomorrow. So, please prepare accordingly.  
sponsored links

0 Responses:

Post a Comment

Related Posts Plugin for WordPress, Blogger...