Banks play a very important role in our life. So it is very important for us to understand what are banks. Banks are a financial institution certified by the government for the deposit of money. Banks also provide loans to the people. In common language, there are different types of banks to perform different functions. There are many different types of banks in the world. Every bank has its own specific purpose of working. Knowing the type of banks you have is very important for making financial decisions. Some of the major types of banks are as follows-
1 – Co-Operative Bank [2023]:
Co-operative banks are those banks which have been established under the Co-operative Societies Act, 1912. It is a financial institution. Cooperative banks provide loans to small businesses and farmers in both urban and rural areas. The meaning of co-operative is to work together. In most parts of the world, there are co-operative banks that collect people’s capital and provide loans to people. These types of banks work on the principle of No Profit No Loss. The main function of cooperative banks is to provide emergency loans to small businesses, entrepreneurs, industry, self-employed and farmers of the country. Cooperative banks are playing an important role in the development of the country.
2 -Development Bank [2023]:
The reality of a development bank is that it is a financial institution that provides long-term loans for programs and projects, etc. The basic objective of these banks is to expand the industrial sector on the basis of national priorities. Development banks provide loans at low rates to set up industries in backward areas of the country. Development banks are also often referred to as lending institutions or development finance institutions. Development banks have an important contribution in the development of industries.
3 – Scheduled Banks [2023]:
Scheduled banks are included in the Second Schedule to the Reserve Bank of India Act, 1934. In order to be included in this schedule, banks have to comply with the criteria of Section 42(6)(a) of the Reserve Bank of India Act, 1934.
A bank has to fulfill the following conditions to be a scheduled bank in 2023:
(1) The total value of the paid-up capital and reserves of a scheduled bank should be at least Rs.5 lakh.
(2) A scheduled bank has to satisfy the Reserve Bank that its business is not being conducted in a manner prejudicial to the interests of the depositors.
(3) A scheduled bank is a bank which is— (a) an institution specified in this behalf by the Central Government, or (b) a company incorporated under any law in force outside India, or (c) a corporation, or (d) a State co-operative bank, or (e) a company under the Companies Act, 1956.
4 – Commercial Bank [2023]:
Commercial bank is also called commercial bank or commercial bank. Commercial banks are regulated under the Banking Regulation Act, 1949. Commercial banks are created with the aim of making profit. Commercial banks primarily serve individuals and small businesses. Commercial banks provide loans to small business and offer their different financial products. Commercial banks provide loans to individuals and small businesses using all deposits held in customers’ personal accounts. The role of commercial banks is very important in the economic development of the country.
Commercial banks deposit public money with them and give loans to individuals, businesses and the government. There are four types of commercial banks in 2023 –
• Public Sector Banks [2023] –
Public sector banks are those banks in which the government holds majority stake. Banks in which the government’s stake is more than 50 percent. And the rest is owned by the shareholders. Such banks are called public sector banks. For example, State Bank of India (SBI) is the largest public sector bank in India.
• Private Sector Banks [2023]–
At present, everyone has an account in the bank, but it is very important to know whether the bank in which you have an account is government or private. All other banks come under private sector banks. In which more stake is held by any person or institution and not by the government. Private sector banks are operated by an individual or organization. Like Bandhan Bank, Yes Bank, ICICI, Kotak Mahindra Bank, HDFC, Axis etc. are important private sector banks.
• Regional Rural Bank [2023]–
Regional Rural Banks are those banks which are established for providing financial assistance to farmers and small scale industries in rural areas, creating employment opportunities and development of rural areas as well as for the development of the country. These banks are commonly called Gramin Banks.
• Foreign Bank [2023] –
A foreign bank is a financial institution that provides financial services to international consumers from outside its country of origin. Foreign banks are those banks whose headquarters are outside the country. Foreign banks also have to follow the rules of the other country where their headquarter is located along with RBI.
5 – Payment Bank [2023]:
Those banks are called payment banks. Payment banks do not take any credit risk. Payment banks are the type of banks that provide loans to small entities such as low-income families, migrant workers, small businesses and unorganized sectors. Payments Bank does not offer credit cards or loan advances to its customers. Payments banks are not permitted to set up their own subsidiaries for providing non-banking monetary services. Payment banks are a modern type of bank whose main objective is to To provide banking facilities to remote villages and towns.
6 – Exchange Bank [2023]:
If you have currency of any other country, you can convert your foreign currency into Indian Rupees through an exchange bank. Along with this, if you are going to travel to another country, you can convert your currency into foreign currency through an exchange bank. Exchange The main function of the bank is to exchange currencies.
7 – Industrial Bank [2023]:
Industrial banks are those banks which provide loans for equipment used in industries. The number of industrial banks in India is very less but industrial banks are found more in foreign countries.
8 – Central Bank [2023]:
The central bank is the only apex bank of any country. Who gets the right to print notes of that country. The central bank controls the country’s economy. The central bank controls the banking system of all types of banks operating in the country concerned. So that there is no fraud in any kind of banks and people can trust the banks. Like India’s central bank is Reserve of India. Along with issuing notes of the respective country, the central bank also makes rules and regulations for different types of banks working in India. The Reserve Bank of India has the right to grant license to any type of new bank or cancel the license of any bank, if any bank does not follow the rules and regulations laid down by the Central Bank, then the Reserve Bank can cancel its license.
Benefits of the Bank in 2023:
At present, the transactions we are doing so easily. All this has also been possible because of the banks. Bank has many advantages. Which are as follows –
• Banks also provide debit card facility to their customers. Through Debit Card, you can withdraw money through ATM machine. And any purchase can be made with the money available in your account.• Banks give interest to their customers on deposits. Bank is the easiest way to increase money without taking any risk.
• Banks can also transfer money to their customers abroad.
• Banks provide credit card facilities to their customers. With the credit card facility of the bank, you can make purchases even if you do not have enough money.
• The bank provides various types of loans to the needy people. You can get a loan from the bank for studies, building a house, buying a car and for your personal purposes.
• Through the online application provided by the banks, you can see the complete details of your bank account anywhere from mobile.