Name: Swaraj Mahadev Golekar

Class: BBA SY finance

Semester: III
Subject: Banking and finance
Roll no: 13
STRUCTURE OF INDIAN
BANKING SYSTEM
FATHER OF ALL THE BANKS
 Reserve Bank of India
 Established in 1935 , under the Reserve Bank of India
Act,1934.
 Apex body of Indian banking system
 Headquarter in Mumbai
 India’s monetary authority
 Supervisor of financial system
 Issuer of currency
 Banker to bank
 Banker to government
 Maintains financial stability
 RBI has classified Banks under
two major categories:

SCHEDULED BANKS
• Scheduled banks are those banks whose
name appears in the 2nd schedule of
Reserve Bank Of India Act, 1934.

NON-SCHEDULED BANKS
• Non-scheduled banks are those banks
whose name doesn’t appear in the 2nd
schedule of Reserve Bank Of India Act,
1934.
 SCHEDULED BANKS
Definition:
Scheduled Banks in India are those banks which have been included in the
Second Schedule of Reserve Bank of India (RBI) Act, 1934. 
Reserve Bank of India in turn includes only those banks in this schedule
which satisfy the criteria mentioned on section 42 (6) (a) of the Reserve
Bank of India Act 1934.

Criteria for a Scheduled Banks:

 Scheduled Banks are those banks whose minimum paid up capital and
reserve and amount to  25 lakhs.
 These bank have to submit details of their activities to the Reserve Bank of
India every week.
 These banks are listed on the second schedule of the Reserve Bank of  India
Act 1934.
 BANKS UNDER SCHEDULED BANKS

Scheduled
banks

Commercial Co-operative
banks banks

COMMERCIAL BANKS
They are the banks mainly deal with commercial banking
operations like acceptance of deposits and granting loans to
the public. They are mainly classified into four:-
 1. PUBLIC SECTOR BANKS

 Public sector banks are those banks in which the government has the major
holdings.
 At least 51% of ownership is vested with the government
 The shares of these banks are listed on stock exchanges.
 All the nationalized banks and regional rural are public sector banks.

Examples:
 State Bank of India and it’s 6 Subsidiaries.
 Bank Of Baroda
 Syndicate Bank
 Vijaya Bank
 Canara Bank etc.
 2. PRIVATE SECTOR BANKS

 All those banks in which majority of stake are held by private individuals

 The banks which came in operation after 1991, with the introduction of
economic reforms and financial sector reforms are called ‘ NEW PRIVATE
SECTOR BANKS’.
 New banks are strategic in their thinks and operations.

Examples:
 South Indian Bank
 ICICI
 HDFC
 Axis bank etc.
 3. FOREIGN BANKS

 A foreign branch bank is a type of foreign bank that is obligated to follow the
regulations of both host and home countries.

 Because the foreign branch banks’ loans limits are based on the parent banks’
capital , foreign banks can provide more loans than subsidiary banks.

 For example ;suppose the State Bank Of India opens up a foreign branch bank in
America. The branch would be legally obligated to follow both the Indian and
American regulations .

Examples:
 Citi Bank
 HSBC
 Deutsche Bank
 Standard Chartered Bank
 4. REGIONAL RURAL BANKS

 Regional Rural Banks (RRB) are local level banking

organizations operating in different states of India.
 They have been created with a view to serve primarily the rural
areas in India with basic banking and financial services.

Examples;
 Andhra Pradesh Grameena Vikas Bank,
 Chaitanya Godavari Grameena Bank,
 Kerala Grameen Bank etc.
 CO-OPERATIVE BANKS

A bank that holds deposits , makes loans or

provides other financial services to the
cooperatives and member owned organizations.

Also known as Banks of Cooperatives'.

 CO-OPERATIVE
BANKS

URBAN CO- STATE CO-

OPERATIVE OPERATIVE
BANKS BANKS
 1. URBAN CO-OPERATIVE BANKS

 The term Urban Co-operative Banks (UCBs), though not formally defined, refers
to primary cooperative banks located in urban and semi-urban areas.
These banks, till 1996, were allowed to lend money only for non-agricultural purposes.
 This distinction does not hold today. These banks were traditionally centred around
communities, localities work place groups.
They essentially lent to small borrowers and businesses

Examples:-
 Ahmedabad Mercantile Co-operative Bank
 Goa Urban Co-operative Bank
 Shikshak Sahakari Bank
 Bombay Mercantile Co-operative Bank
 2. STATE CO-OPERATIVE BANKS

State co-operative banks are the apex co-operative institution in a state . They
are federations of district co-operative banks, and they monitor the activities of
all co-operative banks in the state.

Examples:-
 Kerala State Co-operative Bank
 Orissa State Co-operative Bank
 Gujarat State Co-operative Bank
 Maharashtra State Co-operative Bank
 Bihar State Co-operative Bank
 State bank of India
Established in 1806 as Bank of Calcutta.
State Bank of India is a multinational, public sector
banking and financial services company.
Government owned corporation
Headquarters in Mumbai
It is the oldest bank of indian sub-continent.
Largest branch network in India with 14000 branches,
including 191 foreign offices spread across 36
countries.
 Brief History
Started as Bank of Calcutta later renamed as Bank of Bengal
established on 2nd June,1806.
The Bank of Bengal was one of three Presidency banks, the
other two being the Bank of Bombay (incorporated on 15
April 1840) and the Bank of Madras (incorporated on 1 July
1843).
All the three presidency banks were first joint-stock companies.
Later on Bank of Madras, Bank of Bombay and Bank of
Bengal were amalgamated to form Imperial bank of India on
27 January 1921.
It was nationalized on 1955 and was renamed as state Bank of
India.
 Associate banks
State
Bank of
Indore.
State
State Bank Bank Of
of Bikaner
Travancore and
Jaipur

State
State
Bank Of
Bank of
Hyderaba
Patiala
d

State
Bank Of
Mysore
 Services
Services
Internet Banking
Mobile Banking
ATM Services
Demat Services
Service Charges and Fees
Aadhaar Seeding
Cash Deposit Machine
Consolidation of SBI by march 2017
Consolidation among public sector banks (PSBs) is
expected to happen only after the completion of
merger between State Bank of India (SBI) and its
associates, a senior finance ministry official said.
“Banks can consider merger and acquisition only when
their financial strength improves significantly.
Logically, the next round of mergers and acquisition
may take place after consolidation of associate banks
and acquisition of Bharatiya Mahila Bank with SBI,”
the official said.
Introduction of New Banks
Since April 2014, the Reserve Bank of India (RBI) has
granted 23 banking licences to new players - two were given
universal banking licences (April 2, 2014) that are IDFC
Bank and Bhandhan Bank , 11 were issued payments banks
licences (August 19, 2015) and 10 were given licences for
small finance banks (September 16, 2015).
The niche banks - small finance and payments banks -have
been set up to further the regulator's objective of deepening
financial inclusion. Going ahead, RBI is planning to come
up with "on tap" licences which means there will not be any
cut-off date for applying for the licences.
 IDFC BANK
IDFC Bank Ltd. is an Indian banking company with
headquarters in Mumbai that forms part of IDFC, an
integrated infrastructure finance company. The bank started
operations on 1 October 2015.
IDFC received a universal banking licence from the Reserve
Bank of India(RBI) in July 2015. On 6th November, 2015,
IDFC Bank was listed on BSE and NSE.IDFC was
incorporated on 30 January 1997 with its registered office in
Chennai and started operations on 9 June 1997. In 1998 the
company registered with the Reserve Bank of India (RBI) as
a non-banking financial company and in 1999 it formally
became a Public Financial Institution.
 Bhandhan Bank
Bhandhan Bank Ltd. is an Indian banking and financial services
company headquartered in Kolkata, West Bengal. Bandhan, which
started as a micro-finance company in 2001, received banking
licence by Reserve Bank of India in 2014.
On 24 August 2015, Union Finance Minister Arun Jaitley
officially inaugurated the bank in Kolkata. Initially it opened with
501 branches across India. Bandhan Bank was incorporated on 23
December 2014 as a wholly owned subsidiary of Bandhan
Financial Holdings. Bandhan received the in-principle approval of
the (RBI) for setting up a universal bank in April 2014; the
banking regulator gave its final nod in June 2015.
Incidentally, Kolkata-headquartered Bandhan is the first bank to
be set up in eastern part of India after Independence.
THANK YOU