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C. Kavya

Types of

Scheduled Banks Non-Scheduled Banks

Cooperative Bank

Public Private Foreign Urban Rural
Sector Sector Bank Bank Bank
• Schedules banks are covered under the 2nd Schedule
of the Reserve Bank of India Act, 1934.

• A bank that has a paid-up capital of Rs. 5 Lakh and

above qualifies for the schedule bank category.

• These banks are eligible to take loans from RBI at

bank rate.
• Commercial Banks are regulated under the Banking
Regulation Act, 1949 and their business model is
designed to make profit.

• Their primary function is to accept deposits and

grant loans to the general public, corporates and
• Commercial banks are like other financial
institution(example: Money Lenders, Indigenous
bankers, Cooperative societies, Agricultural and
industrial credit institutions) Which are business of
lending and borrowing of money or credit.
• Public Sector Banks (PSBs) are the banks where a
majority percentage (more than 50%) stake is held by a
government. The shares of these banks are listed on
stock exchanges. In India, there are about 27 Public
Sector Banks in India.

• There are a total of 27 PSBs in India – 21 Nationalized

banks + 6 State bank group (SBI + 5 associates) and rest
two are IDBI Bank and Bharatiya Mahila Bank, which are
categorized as other public sector banks.
• The State Bank of India (SBI) is an Indian multinational, public
sector banking and financial services statutory body. It is
a government corporation statutory body headquartered
in Mumbai, Maharashtra. SBI is ranked as 216th in the Fortune
Global 500 list of the world's biggest corporations of 2018. It is
the largest bank in India with a 23% market share in assets,
besides a share of one-fourth of the total loan and deposits
• State Bank of India and Associates
• State Bank of India (SBI)
• State Bank of Bikaner and Jaipur (SBBJ)
• State Bank of Hyderabad (SBH)
• State Bank of Indore (SBIR)
• State Bank of Mysore (SBM)
• State Bank of Patiala (SBP)
• State Bank of Saurashtra (SBS)
• State Bank of Travancore (SBT)
Nationalized Bank
• Hence, the government decided to nationalize 14
major commercial banks.
• A second wave of nationalisation in banking came
into effect in April 1980.
• Currently there are following 19 nationalised banks in
India as per the RBI
• Allahabad Bank
• Andhra Bank • Indian Overseas Bank
• Bank of Baroda • Oriental Bank of Commerce
• Bank of India • Punjab & Sind Bank
• Bank of Maharashtra • Punjab National Bank
• Canara Bank • Syndicate Bank
• Central Bank of India • UCO Bank
• Corporation Bank • Union Bank of India
• Dena Bank • United Bank of India
• Indian Bank • Vijaya Bank
• These include banks in which major stake or equity is held by
private shareholders. In which majority of stake is held by
private individuals. Eg: ICICI Bank, IDBI Bank, HDFC Bank, AXIS
Bank etc.

• All the banking rules and regulations laid down by the RBI will
be applicable on private sector banks as well.

• There are 40 private banks in India including Local Area Banks

(LAB), Small Finance Banks (SFB) and Payments Banks (PB)
Basic objective To serve the citizens of the Earning Profit

Raises money from Public Revenue like tax, Issuing shares and
duty, penalty etc. debentures or by taking

Areas Police, Army, Mining, Finance, Information

Health, Manufacturing, Technology, Mining,
Electricity, Education, Transport, Education,
Transport, Telecommunication,
Telecommunication, Manufacturing, Banking,
Agriculture, Banking, Construction,
Insurance, etc. Pharmaceuticals etc.

Benefits of working Job security, Retirement Good salary package,

benefits, Allowances, Competitive environment,
Perquisites etc. Incentives etc.

Basis of Promotion Seniority Merit

Job Stability Yes No
• A foreign bank is one that has its headquarters in a foreign
country but operates in India as a private entity.

• The foreign exchange market is commonly known as FOREX, a

worldwide network, that enables the exchanges around the

• Foreign Banks with Branches in India. As of November 2018,

India has 45 foreign banks with total 286 branches operating
in India.

• Chartered Bank and HSBC are some leading foreign banks in


• The main objective of providing credit to weaker sections of

the society like agricultural labourers, marginal farmers and
small enterprises.

• Providing banking and financial services to rural and semi-

urban areas.

• Government operations like disbursement of wages of

MGNREGA workers, distribution of pensions, etc.
• Every RRB is owned by 3 entities with their respective
shares as follows:
Central Government -50%
State government-15%
Sponsor bank -35%
• The cooperative bank is also regulated by the RBI. They are
governed by the Banking Regulations Act 1949 and Banking
Laws (Co-operative Societies) Act, 1965.

• Usually a cooperative society is formed around communities,

localities or small groups with a common interest. Cooperative
banks work on the basis of mutual benefit. Therefore they can
lend only to the members of the society though they can
borrow/accept deposits from the general public.
• Rural Co Operative Banks mainly finance agricultural
based activities including farming, dairy, fishiculture,
along with some small scale industries and self
employment activities.

• Urban Co Operative Banks mainly finance various

categories of people for self employment, industries,
small scale units and home finance.
• Non-Scheduled banks are also called Local Area Banks (LAB).
There are only four Local Area Banks in India.

• Coastal Local Area Bank Ltd : This bank was established on 27th
December 1999. There are three contiguous districts. Krishna,
Guntur and West Godavari. Its head office is located at
Vijayawada in Andhra Pradesh.
• Capital Local Area Bank Ltd : This bank was established on
14th January 2000. There are three districts viz. Jalandhar,
Kapurthala and Hoshiarpur in Punjab. The head office is at
Phagwara (Punjab).
• Krishna Bhima Samruddhi Local Area Bank Ltd : This bank
was established on 28th February 2001. Districts of
Mahbubnagar in Andhra Pradesh and Raichur and Gulbarga in
Karnataka with its head office at Mahbubnagar(Andhra
• Subhadra Local Area Bank Ltd,Kolhapur : This is smallest
Local Area Bank with only 8 branches. Its head office is in