Types of Banks- Banking Awareness:
A brief notes about the types of banks in India was given here below, which was important banking awareness topic for the upcoming banking exams. Candidates those who are preparing for those exams can use this.
There are seven types of Banks in India, and they are given below.
A savings bank is a financial institution whose primary purpose is to accept savings deposits. It may also perform some other functions. These banks are helpful for salaried people and low income groups. The deposits collected from the customers are invested in bonds, securities etc,. At present, most of the commercial banks carry out the functions of Savings Banks; Postal Department also performs the functions of savings bank.
A Commercial Bank is an institution which accepts deposits, makes business loans and offers related services. Commercial Banks also allow for a variety of deposit accounts, such as current, savings and time deposit. These institutions are run to make profit. Commercial Banks provide various services like collection cheques, bills of exchange, remitting money from one place to another place. In India, Commercial Banks have been established under Companies Act, 1956. In 1969, 14 Commercial Banks were nationalized by the Government of India.
3.)Industrial Banks/ Development Banks:
Development Banks are those financial institutions engaged in the promotion and development of industry, agriculture and other key sectors. These banks react to the socio-economic needs. They satisfy the developmental needs of the economy and their success is linked to the satisfactory growth of the economy. The main objective of these banks is to provide long term loans for expansion and modernization of industries. In India, such banks were established o a large scale after independence. They are Industrial Finance Corporation of India (IFCI), Industrial Credit and Investment Corporation of India (ICICI) and Industrial Development Bank of India (IDBI).
4.)Land Development Banks:
The Long term credit needs of the agricultural sector are met by another type of Cooperative institution called as Land Development Banks. The structure of these banks is a two-tier one-at the state level there are Central Land Development Banks and at the district or taluka level, there are primary Land Development Banks. In a few States, e.g Gujarat, Jammu and Kashmir and UP, the structure is unitary i.e., there are Apex Land Development Banks which operate directly through their own branches at the district level.
Indigenous Banks means money lenders and sahukars. They collect deposits from general public and grant loans to the needy persons out of their own funds as well as from deposits. These indigenous banks are popular in villages and small towns. They perform combined functions of trading and banking activities. Certain well-known Indian communities like Marwaries and Multanis even today run specialized indigenous banks.
Every country of the world has a Central Bank. In India, Reserve Bank of India; in USA Federal Reserve and in UK, Bank of England are example of the Central Banks. These Central Banks are the bankers of the other banks. They perform specialized functions, i.e., issue of paper currency, work as bankers to governments, supervise and control foreign exchange. A Central Bank is a non-profit making institution. It does not deal with the public but it deals with the other banks. The principal responsibility of the Central Bank is thorough control on currency of a country.
In India, Cooperative Banks are registered under the Cooperative Societies Act 1912. They generally give credit facilities to small farmers, salaried employees, small scale industries, etc. Cooperative banks are in rural as well as in urban areas. The functions of these banks are just similar to that of Commercial Banks.
Standard Chartered Banks, City Bank, HSBC are the examples of Foreign Banks working in India. These banks are mainly concerned with financial foreign trade. Following are the various functions of Exchange Banks.
· Remitting money from one country to another country
· Discounting of foreign bills.
· Buying and selling gold and silver.
· Helping import and export trade.
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