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Banking System and Types of Banks in India

September 20, 2012

Learning objectives:

The meaning of bank:

              The table at which the dealer in money is working is called as bench or banca in Italian. The savings and cheque accounts are offered, loans are made as well as other financial services are given, mostly profits are made from the difference among interest paid on deposits along with charged for loans,  in addition fees for accepting bills and also other services by the bank, so therefore the bank is considered as a financial institution.  The Reserve Bank Act and Banks (shareholdings) Act are the other pertinent legislation. Extensive range of powers is given to the Reserve Bank ofAustraliawhich is a central bank over the banking sector through the Reserve Bank Act. 

Banking system of India:

       In the period of British rule itself, growth is observed in the banking sector of India. The East India Company of British introduced three major banks during the first half of 19th century such as Bank of Madras in 1843, Bank of Bengal in 1809 and Bank of Bombay in 1840. The Imperial Bank formed by merging these three banks after that the SBI took hold of this bank in the year 1955. The initial bank which is completely owned by theIndia is Allahabad Bank. In the path of RBI which is set up in the year 1935, the banks like Canara Bank, Punjab National Bank, Indian Bank and Bank of India came into existence. 

The government undertook six main private sector banks in the year 1980 and nationalization of fourteen main banks taken place in the year 1969. Below some categories are given where the Indian commercial banking system is divided.  

Types of Banks:

Central Bank:

The Government owned totally the Reserve Bank ofIndiawhich is the central bank. The Central Government governs the RBI by appointing a central board which is headed by the Governor. For functioning of all banks that operate inside the country, RBI provides guiding principles. 

Public Sector Banks:

The fourteenth main bank is the United Bank of Indiawhich is one of the Indian Public Sector Banks, in the year 1969 on July 19th is nationalized. By the incorporation of four banks such as Hooghly Bank Ltd established in 1932, Bengal Central Bank Ltd established in 1918, Comilla Banking Corporation Ltd established in 1914 and Comilla Union Bank Ltd established in 1922, the United Bank of India Ltd is shaped in the year 1950 which is the precursor of United Bank ofIndia (Public Sector Banks).

  • State Bank Group is named for the State Bank ofIndiaand its associate banks
  • Twenty nationalized banks
  • Public sector banks sponsor the regional rural banks mostly

posted in MBA Projects, MBA Seminar Topics by Ramesh Gavva/Kasarla shanthan

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