Types of banks-part 1
There are different types of banks on the basis of different conditions. Let us discuss one by one. In this part 1, I will discuss bank types on the basis of law, on the basis of domicile, on the basis of ownership. Let us discuss these types one by one:
1.) On the basis of law:
i) Scheduled bank: all commercial banks, foreign bank, Indian banks, state co-operative banks are scheduled banks. These are the banks having a paid up capital of at least rs 5 lac.
ii) Non scheduled banks: these are not mentioned in the IInd schedule of RBI, having a paid up capital of less than rs 5 lac. There are only 3 such banks in India at present.
2.) On the basis of domicile:
i) Domestic banks: these are the banks incorporated in India having branches in all over the country.
ii) Foreign banks: these are the banks incorporated in foreign country and they have set up their branches in India. They deal in foreign exchange. Standard chartered banks, Hong Kong bank, bank of America are such types of banks.
3.) On the basis of ownership:
i) Public sector banks: these are the banks which are owned by the government. The government runs these banks. There are 20 such banks. 14 banks were nationalized in 1969 and other 6 in 1980. Their main aim is social welfare. On 4 sep, 1993 new bank of India was merged with Punjab national bank as a result of this total number of nationalized banks reduced from 20 to 19.
ii) Private sector banks: these are the banks which are run and owned by the private sector. Like Vijaya bank. An individual has control over it as per the share held by them.
iii) Co-operative banks: these are the banks which are jointly run by a group of individuals each individual has his equal share in these banks. Mutual help of the members is the main aim of these banks.
The above are the types of banks. The next two types, on the basis of function and structure will be discussed in the next article, that is types of banks-part 2.