Commercial Banks are those profit seeking institutions which
accept deposits from general public and advance money to
individuals like household, entrepreneurs, businessmen etc. with
the prime objective of earning profit in the form of interest,
Examples of commercial banks – ICICI Bank, State Bank of
India, Axis Bank, and HDFC Bank
Scheduled banks :- Banks which have been included in the
Second Schedule of RBI Act 1934. They are categorized as
• Public Sector Banks :- E.g.. SBI, PNB, Syndicate Bank,
Union Bank of India etc.
• Private Sector Banks :- E.g.. ICICI Bank, IDBI Bank,
HDFC Bank, AXIS Bank etc.
• Foreign Banks :- E.g.. Citi Bank, Standard Chartered
Bank, Bank of Tokyo Ltd. etc.
Non scheduled banks :- Banks which are not included in
the Second Schedule of RBI Act 1934.
SBI and Associate Banks
State Bank of India
State Bank of Bikaner & Jaipur
State Bank of Hyderabad
State Bank of Mysore
State Bank of Patiala
State Bank of Travancore
State Bank of Saurashtra (merged into SBI in 2008)
State bank of Indore (merged into SBI in 2010)
Evolution Phase(Prior to 1948 ):
◦ Allahabad Bank set up in 1865 with European Mgt
◦ Oudh Commercial Bank (1881) was first bank
◦ Ajodhya Bank in 1884
◦ Punjab National Bank in 1894
◦ Nedungadi Bank in 1899.
Foundation Phase (1948-1967)
◦ Banking Regulations Act passed in 1949.
◦ Transformation of Imperial Bank into State Bank of
◦ No of scheduled banks increased and non
scheduled banks decreased.
Expansion Phase (1968-1984)
◦ Witnessed socialization of banking
◦ 14 banks nationalized in 1969 and 6 in 1980
◦ Birth of Regional Rural Banks in 1975 and NABARD
in 1982 which had priority sector as their focus of
◦ No of scheduled banks increased upto 268 in 1984
and number of non scheduled banks came down
from 210 to 4.
◦ Competitive efficiency of banks was low
◦ Customer service became least available
Consolidation Phase (1985-1990)
◦ Although the number of scheduled banks increased
from 264 in 1984 to 276 in 1990, branch
expansion of the banks slowed down.
◦ For the first time attention was paid to improving
housekeeping, customer service, staff productivity
and profitability of banks.
◦ There was no autonomy in vital decisions.
Reformatory Phase (1191-2000)
◦ Various macro
level structural reformatory
measures were undertaken in the fields of foreign
trade, tax system, industrial policy and financial
and other sectors.
◦ Too much expansion at too fast pace had left
certain management areas weak.
◦ Overregulation leading to weakening of the