The Indian banking system consists of commercial banks and cooperative banks. Commercial banks include public sector banks, private sector banks, foreign banks, and regional rural banks. The Reserve Bank of India acts as the central bank that controls monetary policy. Cooperative banks include short-term banks like primary credit cooperative banks and long-term banks like primary cooperative agriculture and rural development banks. Together, these banks facilitate financial transactions and provide security for deposits in India.

1. INDIAN BANKING SYSTEM.
Introduction
The Indian Banking System: it is an institutional framework which
enables financial transactions. Now, the point is why do we need to make
money transactions? Every common man thinks that if only barter system was
allowed, life would be so much more peaceful.... Let's get to know more about
it with the help of a short story­ Reena had loads of salt but she was in need
of corn, on the other hand Dev had access to corn which he didn't mind
trading for salt(this is how barter system functions). But now Dev is in
trouble as his reserve of corn would go bad in a while. This is when Dev(the
smarter one :p) came up with an idea to introduced a new system of trading
ie. Money.
The Banks that are available in our country help us make all these
transactions easily. They further give us security of our money and even the
appropriate credit capitalisation{GDP} on our money which is deposited in
the banks.

2. History of Indian Banking System
FIRST FEW BANKS OF INDIA:
● Bank of Hindustan in 1770, Calcutta.
● General Bank of India in 1786.
THREE PRESIDENCY BANKS:
● Bank of Calcutta in 1806.
● Bank of Bombay in 1840.
● Bank of Madras in 1843.
Later, Bank of Calcutta was nationalized and given the name Imperial Bank
of India in 1921 which was further renamed to State Bank of India in 1955.
This makes SBI one of the oldest banks of India.
Captain of Indian Banking System
The Indian Banking System works in accordance to Reserve Bank of
India(RBI). The Reserve Bank of India is India's central banking institution,
which controls the monetary policy of the Indian rupee. It commenced its
operations on 1 April 1935 and following India's independence on 15 August
1947, the RBI was nationalised on 1 January 1949.

4. Structure of Indian Banking System
The indian banking system can be classified mainly in two parts:
Commercial Banks
­Private sector Banks
­Public sector Banks
­Foreign Banks
­Regional Rural Banks
Coorporative Banks
➢ Short term
­Primary Credit Coorporative Banks{PCCB}
­Disrict Central Coorporative banks{DCCB}
­State Coorporative Banks{SCB}
➢ Long term
­Primary Cooperative Agriculture and Rural Development Bank{PCARDB}
­State Cooperative Agriculture and Rural Development Bank{SCARDB}
Urban Banks

6. .
Let's first see what does a commercial
bank general do?
A commercial Bank is a type of financial institution that provides services
such as accepting deposits, making business loans, and offering basic
investment products. The functions performed by a commercial bank are:
● Accepting deposits.
● Making advances.
● Credit creation.
● Clearance of cheques.
● Transfer of money.
● Providing insurance.
● To work as a trustee: The banks act as trustee to manage trust propeties as
per instructions of property owners.
● Sale/Purchase of Bonds/Shares: A bond is debt instrument that a
government or a company issues to raise money. One can buy and sell bonds
and shares on the open market or to the banks.
● To work as a representative: Commercial bank sometimes acts as an agent
on behalf of its customers.

7. .
So where lies the difference amongst
the various types of commercial banks?
Lets see the main points which diffrentiate all the commercial banks.
● Private Sector Banks: The major stake holders of these banks are
corporators or industrial companies.
● Public Sector Banks: The major stake holders of these banks is the Indian
government.
● Foreign Banks: These banks function in india but their headquarters are
located in some foreign nation.
● Regional Rural Banks: These are set up to simply meet the needs of people
in rural areas (villagers) and not to make profits..

9. .
What does a coorporative bank do?
Cooperative banking is retail and commercial banking organized on a
cooperative basis. Co­operative banks differ from stockholder banks by their
organization, their goals, their values and their governance. Cooperative
Banks in India have become an integral part of the success of Indian
Financial Inclusion story. They work on a no profit no loss agenda helping
other villagers or the respective people. RBI only has partial control over these
banks unlike commercial banks where RBI has full control over them.
Here are the differences between commercial and cooperative banks.

10. .
Here are the features which make various
types of Cooperative Banks unique
Short term:
● PCCB­ they give short term loans to villagers or people in rural areas only.
● DCCB­ they give loans to PCCBs and not to the villagers directly.
● SCB­ they monitor and govern all the loans and pass them to DCCBs only.
Long term:
● PCARDB­ they give long term loans to villagers or people in rural areas by
mortgaging immovable property as security.
● SCARDB­ they monitor all the loans and pass them to PCARDBs

11. .
Urban Banks
These are further of two types­ scheduled and non­scheduled.
Scheduled Banks are the banks which were established in or after 1934 and
who function in accordance to the RBI, whereas Non­Scheduled Banks are the
banks which do not follow the rules made by the RBI, and most of them were
established in 1902.
Here are the various types of Urban Banks:
Scheduled Banks
● Multistate­ the bank has its branches over multiple state.
● Single state­ the bank has all it's branches in a single state itself.
Non­Scheduled
● Multistate
● Single state
Tier 1­ they have a total deposit less than 100 crore INR.
Tier 2 ­they have a total deposit more than 100 crors INR.

12. .
To conclude with, I'd like to summarize about the INDIAN BANKING
SYSTEM by talking about it's accomplishment­
Physical as well as virtual expansion of banking through mobile banking,
internet banking, tele banking, bio­metric and mobile ATMs is taking place
since last decade and has gained momentum in last few years. The new UPI
{unified payment interface} has been launched by RBI to make transactions
and payment even more simpler and easier on a user level.