The document outlines and defines the different types of banks that operate in India. It discusses scheduled banks, which are included in the RBI Act and must meet certain capital and activity requirements. Non-scheduled banks are commercial banks not on this schedule. Public sector banks have majority government ownership, while private sector banks have majority private ownership and are split into old and new categories. Foreign banks, regional rural banks, and co-operative banks are also defined.

1. Peeyush Sahu/ PGPSM 2014-15

2. Reserve Bank of
India
Scheduled Banks
Commercial Banks
Public Sector
Banks
SBI & Associate - 5
Other Public
Sector Banks - 22
Private Sector
Banks
Old - 17
New - 12
Foreign Banks - 43
Regional Rural
Banks - 56
Co-Operative
Banks - 45
Urban
Rural
Non Scheduled
Banks
Peeyush Sahu/ PGPSM 2014-15

3. Scheduled Banks :
 Scheduled Banks in India constitute those banks which have been included in the
Second Schedule of Reserve Bank of India(RBI) Act, 1934.
 RBI in turn includes only those banks in this schedule which satisfy the criteria laid
down vide section 42 (6) (a) of the Act.
The banks included in this schedule list should fulfill two conditions :
1. The paid capital and collected funds of bank should not be less than Rs. 5 lac.
2. Any activity of the bank will not adversely affect the interests of depositors. Every
Scheduled bank enjoys the following facilities :
a. Such bank becomes eligible for debts/loans on bank rate from the RBI.
b. Such bank automatically acquire the membership of clearing house.
Peeyush Sahu/ PGPSM 2014-15

4. Non-Scheduled Banks :
 A banking company defined in clause(c) of section 5 of the Banking Regulation Act
1949 (10 of 1949), which is not a scheduled bank.
Commercial Banks :
 According to the Indian Banking Regulation Act 1949, "A banking company means
any company which transacts the business of banking .
 Banking means accepting for the purpose of lending of investment of deposits of
money from the public, payable on demand or other wise and withdraw able by
cheque, draft or otherwise."
Peeyush Sahu/ PGPSM 2014-15

5. Co-operative Banks :
 A co-operative is an autonomous association of persons united voluntarily to meet
their common economic, social, and cultural needs and aspirations through a
jointly-owned and democratically-controlled enterprise.
 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...).
Peeyush Sahu/ PGPSM 2014-15

6. Public Sector Banks :
 Public Sector Banks (PSBs) are banks where a majority stake (i.e. more than 50%) is
held by a government. The shares of these banks are listed on stock exchanges.
 There are a total of 27 PSBs in India [19 Nationalized banks + 6 State bank group
(SBI + 5 associates) + 1 IDBI bank (Other Public Sector-Indian Bank) = 26 PSBs + 1
recent Bhartiya Mahila Bank.
Private Sector Banks :
 The "private-sector banks" are banks where greater parts of stake or equity are held
by the private shareholders and not by government.
 This is split into two groups ,
1. Old Private Sector
2. New Private Sector Banks.
Peeyush Sahu/ PGPSM 2014-15

7. Foreign Banks :
 The banks (as per clause(d) of section 5 of BR Act 1949) that do their operations
and services in India followed by the rules and regulations of RBI (just the way the
local banks do).
Regional Rural Banks :
 An Act to provide for the incorporation, regulation and winding up of Regional Rural
Banks with a view to developing the rural economy by providing, for the purpose of
development of agriculture, trade, commerce, industry and other productive
activities in the rural areas, credit and other facilities, particularly to the small and
marginal farmers, agricultural laborers, artisans and small entrepreneurs, and for
matters connected therewith and incidental thereto. (as per RRB Act 1976)
Peeyush Sahu/ PGPSM 2014-15