Types of Banks In India

Types of Banks in India

As per the Federal Reserve Bank of India Act, 1934, banks in India are classified into two major categories.
i.e. scheduled and non-scheduled banks. 

A scheduled bank is a bank which name appears within the second schedule of the RBI Act, 1934. 

It includes those banks, which have a paid-up capital and reserves of an aggregate value of not but Rs.5 lakhs and which satisfy RBI that their affairs are being administered within the interests of the depositors.

While, non-scheduled banks are those, which haven't been included within the second schedule of the Act.

The scheduled banks includes scheduled commercial banks and scheduled cooperative banks. 
The scheduled commercial banks in India are categorised into following different groups consistent with their ownership and/or nature of operation: -

(i) Nationalised Banks

(ii) depository financial institution of India and its associates;

(iii) Regional Rural Banks (RRBs);

(iv) Foreign banks; and

(v) Other Indian private sector banks

(vi) Local Area Bank.

Scheduled Co-operative Banks contains 

(i) Scheduled State Co-operative Banks and

(ii) Scheduled Urban Co-operative Banks.

Banks in India are controlled, supervised and controlled by Federal Reserve Bank of India.
Banking structure in India are often broadly classified as under

Central Banking

Commercial Banking

Development Banking (Development Finance Institutions)

Non-Banking financial Institutions

Merchant Banking

Banking structure in India

Reserve Bank of India Development Banks



NABARD Commercial Banks

Scheduled Banks Non-Scheduled Banks

Indian Banks Foreign Banks-Branches-Representative Office

Dist. Co-operative Banks

State Co-Operative Banks

Public Sector

Private Sector

State Bank of India

Nationalised Banks

Regional Rural Banks

New Generation Banks

Local Area Banks

Old Banks

Non Banking Finance Companies
Merchant Banking

Other Financial Institutions

 Land Mortgage Banks

 Industrial Finance Corporation

Agriculture Refinance Corporation

State financial Corporation

The economic Reconstruction Bank of India

Credit Guarantee Corporation of India

The Deposit Insurance Corporation

The credit and Guarantee Corporation

Industrial Development Finance Corp

Industrial Investment Bank of India

There are 12 Nationalised Banks.
and State bank of India.

There were around 45 Regional Rural Banks which were established in each district of the country in partnership with Central Government ( 50% Capital Share) State Government ( 15% Share capital) Sponsor Bank ( 35% capital share).

The Regional Rural Banks are the banks which are established by a bank in a state have now been merged and made as one unit.

Private sector Old Banks Examples

Bank of Rajasthan

Nainital Bank

New Generation Banks Examples

Axis Bank


YES Bank


Foreign Banks –Example- ABN Amro, Chartered Bank, ANZ Bank, HSBC etc.

Reserve Bank of India is a financial institution of the country was established on 1 April 1935, in accordance with the provisions of the Federal Reserve Bank of India Act, 1934. .

Non-Banking Finance Companies:

According to Federal Reserve Bank (Amendment Act) 1997. “A Non Banking nondepository financial institution Means (NBFC)
A financial organization , which may be a company;

A non-banking institution principal business is receiving of deposits under any scheme or arrangement or in the other manner or lending in any manner;

Such other non-banking institution or class of such institutions because the Bank may with the previous approval of the Central Government specify

Non Banking nondepository financial institution include those finance companies, which are within the business of

Hire Purchase Finance

Housing Finance



Equipment Leasing

Mutual benefit financial companies.

Merchant Banking:

Merchant banking is a skill-based activity and includes servicing every need of the client.

Merchant banking activities involves the issue and underwriting of shares and debentures.

Merchant Bankers activities are regulated by Guidelines of SEBI (Securities and Exchange Board of India) and Companies Act, 1956

Listing Guidelines of stock market 
Securities Contracts (Regulations) Act, 1956
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