Knowledge Bytes- Indian Banking System- I

Indian Banking System

Banking occupies one of the most important positions in the modern economic world. It is necessary for trade and industry. We can say that a bank is a financial institution which deals in debts and credits. Technology driven Indian banking system, the growing universalization and internationalization of banking operations have altered the face of bank.

Types of Banks

There are various types of banks. The necessity for the variety among these banks is because each bank is specialized in their own field. Each bank has its own principles and policies.

 

What is RBI?

The RBI is India's central bank. The Reserve Bank of India was established on April 1, 1935 in accordance with the provisions of the Reserve Bank of India Act, 1934.

RBI acts as a banker to the Government and Banks.

The Central Bank maintains record of Government revenue and expenditure under various heads. It maintains deposit accounts of all other banks and advances money to other banks, when needed.

Another important function of the Central Bank is the issuance of currency notes, regulating their circulation in the country by different methods.

What is Scheduled Bank?

All banks which are included in the Second Schedule to the Reserve Bank of India Act, 1934 are scheduled banks.

These banks comprise Scheduled Commercial Banks and Scheduled Cooperative Banks. The type of banks comes under these Scheduled Commercial Banks and Scheduled Cooperative Banks can be seen in the above figure.

All most all banks are Scheduled banks in India.

What are Commercial Banks?

• Commercial banks may be defined as, any banking organization that deals with the deposits and loans of business organizations
• Commercial banks issue bank checks and drafts, as well as accept money on term deposits.  Commercial banks also act as moneylenders, by way of installment loans and overdrafts.
• Commercial banks also allow for a variety of deposit accounts, such as checking, savings, and time deposit. These institutions are run to make a profit and owned by a group of individuals.
• Commercial banks may be defined as, any banking organization that deals with the deposits and loans of business organizations
• Commercial banks issue bank checks and drafts, as well as accept money on term deposits.  Commercial banks also act as moneylenders, by way of installment loans and overdrafts.
• Commercial banks also allow for a variety of deposit accounts, such as checking, savings, and time deposit. These institutions are run to make a profit and owned by a group of individuals.
• What are Commercial Banks?
• Commercial banks may be defined as, any banking organization that deals with the deposits and loans of business organizations
• Commercial banks issue bank checks and drafts, as well as accept money on term deposits.  Commercial banks also act as moneylenders, by way of installment loans and overdrafts.
• Commercial banks also allow for a variety of deposit accounts, such as checking, savings, and time deposit. These institutions are run to make a profit and owned by a group of individuals.

I will explain different types of commercial banks and continue in my next post, till then happy reading. Please let me know if you have any suggestion to make this blog better by commenting on posts  or write to infocenter24x7blog@gmail.com Thanks!