Kinds of Banking and their functions

Kinds of Banks

Mainly their are 4 types of Banks based on ownership. But there are many existence of different types of Banks According to their functionary mechanism such following banks mentioned below:- Kinds of banking

Central Bank
Commercial Bank
Cooperative Bank
Specialized Bank

Central Bank

Every country has their own central bank to circulate and monitor the monetory transaction.
It is the public sector bank.
Center bank is Regulatory body regulate the banking system of country.
India also has its center Bank that is the Reserve Bank of India.
Owned by the Ministry of Finance, Government of the Republic of India.
The Reserve Bank of India was established in 1934, under the Reserve Bank of India Act.
It was nationalised in 1949 and since then fully owned by the Ministry of Finance, Government of India
It is also called the head of all banks.

Commercial Banks

The two primary characteristics of a commercial bank are lending and borrowing. It’s main aim is to earn more profits. They provide loans, investment and other business performing support of money on interest of rate. Every indian banks is commercial banks.

There are 3 different types of commercial banks , which are mentioned below:-

Private Bank

Private Bank is a type of commercial banks where private individuals and businesses own a majority of the share capital.

Example of private bank are such as Axis Bank, ICICI bank, HDFC bank, Yes bank etc.

Public Bank

Public bank is nationalised bank, and the government holds a significant stake in it.

Examples of public bank in India are such as , Bank of Baroda, State Bank of India (SBI), Dena Bank, Corporation Bank, and Punjab National Bank etc.

Foreign Bank

Foreign bank are established in foreign countries or nations and have branches in other nation or countries.

Example for foreign banks are such as American Express Bank, Hong Kong and Shanghai Banking Corporation (HSBC), Standard & Chartered Bank, Citibank, etc.

Specialised Banks

Specialized Banks are formed with specific goals to deal with the needs of a particular industry or a particular sector are known as specialised banks.

Examples of specialised banks are such as, (SIDBI) Small Industries Development Bank of India, (EXIM Bank) Export and Import Bank , National Bank for Agricultural & Rural Development etc.

Cooperative Banks

Cooperative banks are established under the State Cooperative Societies Act 1912. The members of a cooperative bank are its customers and its owners side by side. The Reserve Bank of India also regulates these banks.

It lend short term of loan and also accepts deposits. In its mainly account for labours ( on daily wages).

Example of cooperative banks are such as Saraswat Co-operative Bank, Cosmos Co-operative Bank, Abhyudaya Co-Operative Bank, The Punjab State Cooperative Bank Ltd., The Tamil Nadu State Apex Co-operative Bank Ltd. etc.

Different types of Banks According to their functionary mechanism, such following banks mentioned below:- Kinds of banking

Saving Banks

Savings banks sounds as the bank that established for saving purpose. In this saving bank , saving account is open and deposit of amount earn interest on it.

Savings Banks not run on a profit-maximizing basis, its original or primary purpose is collecting deposits on savings accounts.

Industrial Banks, Kinds of banking

Industrial banks
- serving the purpose of upliftment of industry.
  - long term investment

Mobilize Deposite

In this banks mechanism, the bank collect, deposit money from various mechanism and invest to earn profit.
- Such as by offering customers various scheme to deposit their amount and earn various rate of interest on it.

Types of banks based on structure, Kinds of banking

Unit Banks

Unit banks are the Banks operate independently in a specifically specified geographical area.
No any attachments or Branches.
Single.

Branch Banks

Banks with Center office and service operated through various multiple Branches.
Example, Bank of Baroda have one center office and there multiple Branches open for services.

Group Banks

Group banks are the Banks
- holding company
- subsidary company

Chain Banks

Chain banks , where one or more individuals or entities control two or more independently chartered banks.

Consolidate Banks

consolidate banks
- bank of different structure merging banks.

Investment Banks

investment banks
- research and advice( to industrial banks where to invest).

Agriculture / land Banks

agriculture/ land banks
- saving / deposit
- loan
  - fix term loan
  - short term loan
- for / from agriculture labour.

Regional rural Banks

regional rural banks are the Banks which work as credit or other services to the rural areas. Means established for rural commercial purpose.

Exchange Banks

exchange banks
- to exchange the currency

Indigenous Banks

indigenous banks
- Indigenous banks are established for specific community or culture.
- Example, craft industries.

Composition of central banks

One manager
one director

Function of banks, Kinds of banking

Primary
- directly
  - banking
    - accept deposite
      - Current account(demand deposite)
      - saving account (demand deposite)
      - fixed deposite(time deposite)
      - recurring deposite (time deposite)
    - giving loans
      - GST(short term)
      - overdraft
      - cash credit ( DD, cheque, money deposit)
    - discounting bill
Secondary
- non-banking
  - example: civil rating , financing by not giving.

Difference between saving and current account

Saving account

current account

1)on credit get invest.

2)any person can open minor also by rules and regulation.

3) proposal from(giving of assurance)

4)least formality.

5) minimum banks you has to be maintained.

6)so get invest every credit.

7)limited withdrawal.

8)to promote middle class on saving.

9)capping -maximum account(25,00,000). After this amount banks does not give interest, it became if you have that short of money then you have interest.

10) there is no overdraft facilities.

11) cheque book is optional.

1) on debit get invest.

2)not anyone can open the account who has letter by not mean( letter of introduction) can only have current account.

3)not get from.

4) any person who has already act in that branch.

5)Any reputed person.

6)zero balance, debit you get interest, no limit on withdrawal, you can get your account in (-) minus.

7)there is minimum limited over everyday, overdraft will not allowed then you are dragged by banks.

8)individual can also have current account , cheque book is mandatory.

Nature and intend of banking

Now a banking institution, thus not only accept deposit and advances loan but inject, it is a institution which provides financial liability to the country as a whole.

Therefore, a banking institution perform under range of function and hence it can be set that so age of ICT, on the extent of banking system has enhanced tremendously.

Now role and extent of the banks could be summarised under the following points:

Banks act as condition of the money and assets
banks act as investor
banks provides instance serves as ( which are earlier prohibited to banking sector)
It are providing E- services
banks are also agency fuction
offering portfolio management services
foreign exchange
under writing the share and debentures
issue draft, traveller cheque and letter of credit
loan sustainancy services.
social, responsibility programme etc,
Thus it can be said that the banks is not olny acting as itermediatory but also is performing in every possible manner so as to meet the economic and financial needs of its customer, hence it can be concluded that banking or the system is the backbone for the economic of any country.