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BankBank AA bankbank isis anan institutioninstitution whichwhich dealsdeals withwith thethemoneymoney andand creditcredit inin suchsuch aa mannermanner thatthat isisacceptsaccepts depositsdeposits fromfrom thethe publicpublic andand makesmakes thethe

surplussurplus fundsfunds availableavailable toto thosethose whowho needneed them,them,andand helpshelps inin remittingremitting moneymoney fromfrom oneone placeplace totoanotheranother safelysafely..

A A bankbank isis aa financialfinancial institutioninstitution whosewhoseprimaryprimary objectiveobjective isis toto actact asas aa paymentpayment agentagentforfor customerscustomers andand toto borrowborrow andand lendlend moneymoney

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A bank may be defined as:A bank may be defined as:

AA bankbank isis aa commercialcommercial establishmentestablishment whichwhichdealsdeals inin debtsdebts andand aimsaims atat earningearning profitsprofits bybyacceptingaccepting depositsdeposits fromfrom generalgeneral publicpublic atatlarge,large, whichwhich isis repayablerepayable onon demanddemand ororotherwiseotherwise throughthrough chequecheque oror bankbank draftsdraftsandand otherwiseotherwise whichwhich areare usedused forfor lendinglending totothethe borrowersborrowers oror investedinvested inin GovernmentGovernmentsecuritiessecurities

TheThe BankingBanking CompaniesCompanies RegulationRegulation ActAct 19491949

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Types of BanksTypes of Banks

Banks may be classified as Follows:Banks may be classified as Follows:

On the basis of RBI scheduleOn the basis of RBI schedule

On the basis of OwnershipOn the basis of Ownership

On the basis of DomicileOn the basis of Domicile On the basis of FunctionOn the basis of Function

RBI ScheduleRBI Schedule Scheduled banksScheduled banks

Non Scheduled banksNon Scheduled banks

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OwnershipOwnership

Public Sector bankPublic Sector bank

Private Sector bankPrivate Sector bank

Co operative bankCo operative bank

DomicileDomicile

Domestic banksDomestic banks

Foreign banksForeign banks

FunctionsFunctions

Retail banksRetail banks

Commercial banksCommercial banks

Investment banksInvestment banks

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RBI Scheduled banksRBI Scheduled banks

Scheduled BanksScheduled Banks ThoseThose banksbanks whichwhich areare includedincluded inin thethe listlist

ofof secondsecond scheduleschedule ofof RBIRBI areare knownknown asasscheduledscheduled banksbanks..

AA bankbank mustmust followfollow thesethese conditionsconditions toto bebeincludedincluded inin thethe secondsecond scheduleschedule ofof RBIRBI

PaidPaid upup capitalcapital andand ReserveReserve MustMust bebe ofof RsRs 55

lakhslakhs

TheThe bankingbanking operationoperation areare notnot detrimentaldetrimental totothethe interestinterest ofof thethe depositorsdepositors..

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ItIt mustmust bebe aa corporationcorporation oror cooperativecooperative society,society,notnot aa singlesingle ownerowner firmfirm oror partnershippartnership firmfirm..

NonNon ScheduledScheduled BanksBanks

AllAll thosethose banksbanks whichwhich areare notnot includedincluded ininthethe secondsecond scheduleschedule ofof RBIRBI areare knownknown asasNonNon ScheduledScheduled banksbanks..

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On the basis of OwnershipOn the basis of Ownership

Public Sector banksPublic Sector banks TheThe banksbanks whichwhich areare ownedowned oror controlledcontrolled byby

thethe GovernmentGovernment areare calledcalled publicpublic sectorsectorbanksbanks..

PrivatePrivate SectorSector banksbanks

ThoseThose banksbanks whichwhich areare notnot ownedowned oror

controlledcontrolled byby thethe GovernmentGovernment whereaswhereascontrolledcontrolled andand ownedowned byby thethe privateprivate sectorsectorii..ee..,, privateprivate individualsindividuals oror corporationscorporations..

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CoCo--operative banksoperative banks

TheThe institutionsinstitutions establishedestablished onon thethe principleprinciple ofofcoco operationoperation forfor dealingdealing inin ordinaryordinary bankingbankingbusinessbusiness isis knownknown asas coco operativeoperative bankbank..

TheseThese areare thethe specialspecial typetype ofof banksbanks doingdoingordinaryordinary bankingbanking businessbusiness inin whichwhich thethemembersmembers coco operateoperate withwith eacheach otherother forfor thethepromotingpromoting ofof theirtheir commoncommon economiceconomic interestinterest..

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On the basis of DomicileOn the basis of Domicile

DomesticDomestic banksbanks ThoseThose banksbanks whichwhich areare incorporatedincorporated andand

registeredregistered inin IndiaIndia areare calledcalled domesticdomesticbanksbanks..

ForeignForeign banksbanks

ThoseThose banksbanks whichwhich areare setset upup inin aa foreignforeigncountrycountry withwith theirtheir controlcontrol andand managementmanagement

inin thethe handshands ofof headhead officeoffice inin theirtheir countrycountryofof originorigin areare calledcalled asas foreignforeign banksbanks..

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On the basis of FunctionsOn the basis of Functions

RetailRetail BankBank

A A retailretail bankbank isis aa bankbank thatthat worksworks withwithconsumers,consumers, otherwiseotherwise knownknown asas 'retail'retail

customerscustomers..

RetailRetail banksbanks provideprovide basicbasic bankingbanking servicesservices totothethe generalgeneral public,public, includingincluding::

Savings account, bill paying servicesSavings account, bill paying servicesMortgage and Personal loanMortgage and Personal loan

Debit and Credit cardsDebit and Credit cards

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Commercial BankCommercial Bank

CommercialCommercial banksbanks handlehandle bankingbanking needsneeds forfor

largelarge andand smallsmall businessesbusinesses includingincluding::

CurrentCurrent AccountAccount

LendingLending moneymoney forfor realreal andand capitalcapitalpurchasespurchases

LettersLetters ofof creditcredit

PaymentPayment andand transactiontransaction processingprocessing

ForeignForeign exchangeexchange

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Investment Banks

An investment bank is a financial institutionthat assists corporate in raising capital byunderwriting and/or acting as the client's

agent in the issuance of securities.

These banks may also assist companiesinvolved in mergers and acquisitions, and

provides ancillary services such as marketmaking, trading of derivatives, fixed incomeinstruments, foreign exchange, commodities,and equity securities.

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Types of Bank deposit Accounts

Individual account

Joint accounts

Partnership accounts

Sole proprietary accounts

Company accounts

Government, Societies, Clubs accounts

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Features of bank deposit

Bank deposit are fairly safe because banks aresubject to control of the Reserve Bank of Indiawith regard to several policy and operational

parameters. Bank deposit enjoy exceptionally high liquidity.

They can be enchased prematurely by incurring asmall penalty.

Loans can be raised against bank deposits.

The rate of interest may change from time to timeaccording to the rules of Reserve bank of India.