Question

Explain the various types of banks based on organization with examples.

Answer 1

1. Commercial banks:
Banks that accept deposits from the public and grant loans to traders, individuals, agriculture, industries, transport, etc. in order to earn profit. Their lending is in comparatively small amounts and mostly for short and medium periods. e.g. State Bank of India

2. Development Banks:
Huge finance required for investment, expansion, and modernization of big industries and others is granted by a separate type of bank called development Banks. They are also called industrial banks, e.g., IFCI, SIDBl.

3. Cooperative Banks:
All cooperative banks in India are owned by their customers or members who are farmers, small traders, and others. Cooperative banks in India are either urban-based or rural-based. example NAFED, Tamil Nadu State Apex Cooperative Bank – Head Office, Chennai.

4. Foreign Banks:
Banks that have registered offices in a foreign country and branches in India. are called foreign banks, e.g., Bank of America – USA.

5. Regional Rural Banks (RRBs):
The RRBs were formed under the Regional Rural Bank Act 1976, jointly by the Central Government, State Government, and a sponsor bank, for example, Pandian Grama Bank.