I hope you enjoyed reading first part of my article on Indian Banking System (Part I, Part II). Here is the final installment on Banking System overview.
What are Co-Operative Banks?
A
co-operative bank is a financial entity which belongs to its members, who are
at the same time the owners and the customers of their bank. Co-operative banks
are often created by persons belonging to the same local or professional
community or sharing a common interest. Co-operative banks generally provide
their members with a wide range of banking and financial services (loans,
deposits, banking accounts, etc).
They
provide limited banking products and are specialists in agriculture-related
products.
Cooperative
banks are the primary financiers of agricultural activities, some small-scale
industries and self-employed workers.
Co-operative
banks function on the basis of "no-profit no-loss".
The
Anyonya Co-operative Bank in India is the first cooperative bank in Asia.
Anyonya
Co-operative Bank Limited (ACBL) is the first co-operative bank in India
located in the city of Vadodara in Gujarat.
How
Bank gets Money?
Banks
make money by lending your money out at interest and by charging you for
services provided. Banks keep on lending money.
The
other big revenue items generated by banks are the fees they charge. Bank
charge for every service, whether it is for an electronic transaction, or
permitting a transfer through the Internet banking system.
When
banks get profits they invest in other companies and in return they will get
money.
Cooperative
Banks in India are registered under the Co-operative Societies Act.
Cooperative
Banks are governed by the Banking Regulations Act 1949 and Banking Laws Act,
1965.
The
Co Operative bank is regulated by the RBI.
Cooperative
banks are an important constituent of the Indian financial system. They are the
primary financiers of agricultural activities, some small-scale industries and
self-employed workers.
What are Public Sector Banks?
These
are banks where majority stake is held by the Government of India.
Examples
of public sector banks are: SBI, Bank of India, Canara Bank, etc.
What
are Private Sector Banks?
Examples
of private sector banks are: ICICI Bank, Axis bank, HDFC, etc.
What are Foreign Banks?
These
banks are registered and have their headquarters in a foreign country but
operate their branches in our country.
Examples
of foreign banks in India are: HSBC, Citibank, Standard Chartered Bank, etc.
What are Regional Rural Banks?
Regional
Rural Banks were established under the provisions of an Ordinance promulgated
on the 26th September 1975 and the RRB Act, 1976 with an objective to ensure
sufficient institutional credit for agriculture and other rural sectors. The
area of operation of RRBs is limited to the area as notified by GoI covering
one or more districts in the State.
RRBs
are jointly owned by GoI, the concerned State Government and Sponsor Banks (27
scheduled commercial banks and one State Cooperative Bank); the issued capital
of a RRB is shared by the owners in the proportion of 50%, 15% and 35%
respectively.
Prathama
bank is the first Regional Rural Bank in India located in the city Moradabad in
Uttar Pradesh.
Summary
