Structure of Indian Banking System

2. STRUCTURE OF BANKING
SYSTEM

7. SCHEDULE BANK
• Registered in the Second Schedule of RBI Act,
1935.
• Banks paid-up capital and reserves of an
aggregate value of not less than Rs. 5 Lakhs

8. NON-SCHEDULE BANK
• Banking company as defined in clause (c) of
Section 5 of the Banking Regulation Act, 1949,
which is not a scheduled bank.
• Bank with reserve capital of less than Rs. 5lakh
• These banks are not governed according to RBI
Act.
• They don’t receive any benefits from RBI

9. COOPERATIVE BANKS
• Cooperative banks are registered under
Cooperative Societies Act.
• These banks are governed by the Banking
Regulations Act, 1949 and Banking Laws
(Cooperative Societies) Act, 1955.
• People who come together to jointly serve their
common interest often from a cooperative
society under the Cooperative Societies Act.

10. • When a Cooperative Society engages itself in
banking business it is called a Cooperative
Bank.
• It gives credit facilities to small farmers, salaried
employees, small-scale industries, etc.
• Cooperative Banks are available in rural as well
as urban areas.

12. CENTRAL COOPERATIVE BANK

13. FUNDS OF THE BANKS

14. • These banks provide finance to member
societies within the limits of borrowing capacity
of societies.
• These banks also conduct all the business at a
Joint Stock Bank

15. STATE COOPERATIVE BANK
• State Cooperative Banks also known as Apex
banks.
• Its funds are obtained from their
• Own Share Capital
• Deposits
• Loans and
• Overdraft from RBI
• 50-90% of working capital of SCB are
contributed by the RBI

16. DISTRICT CENTRAL
COOPERATIVE BANK
• The District Central cooperative Banks are
federations of primary credit societies in a
specific area, normally a District.
• Usually located in District Headquarters,
• Some prominent town of the District.
• These banks have a few private individuals as
shareholders, who provide both finance and
management.

17. SOURCE OF FUND

18. INDIAN BANKS
• Indian Banks are those banks, which are
incorporated in India.

19. COMMERCIAL BANKS
• Commercial banks are established with an
objective to help businessmen.
• These banks collect money from general public
and give short term loans to businessmen by
way of cash credits, overdrafts, etc.
• For the purpose of assessment of performance
of banks, the RBI categorise them as Public
Sector Banks, Old Private Sector Banks, New
Private Sector Banks and Foreign Banks

20. Public Sector Banks
Public Sector Banks are banks, in which the
government has major holding.
They can be further subdivided into
SBI and its associate banks,
other nationalised banks and
regional rural banks.
Public sector banks comprise 19 nationalised
banks and SBI and its 7 associate banks.

21. Regional Rural Banks
To liquidate rural indebtedness by stages and to
dispense institutional credit facilities to framers
and artisans in rural areas.
The government of India promulgated 26th
September 1975, the regional rural banks
ordinance 1975, to set-up Regional Rural Banks
throughout the country.
RRB in India penetrated every corner of the
country and extended a helping hand in the
growth process of the country.

22. • SBI has 30 Regional Rural Banks in India known
as RRBs.
• The rural banks of SBI are spread in 13 states
extending from Kashmir to Karnataka and
Himachal Pradesh to North East.
• Apart from SBI, there are other few banks,
which functions for the development of the
rural areas in India

23. • RRBs provide institutional credit to the
weaker sections of the society
at the concessional rate of interest,
mobilise rural savings and
channelise for supporting the productive
activities in the rural areas.

24. Private Sector Banks
• After the nationalisation of 14 larger banks in
1969.
• No banks were allowed to be set-up in the
private sector.
• Global Trust bank was the first private bank
after liberlisation; it was later amalgamated
with Oriental Bank of Commerce (OBC).

25. • Housing Development Finance Corporation
Limited (HDFC) became the first to receive an
“in principle” approval from the RBI to set up a
bank in the private sector.
• Today, more than 30 private banks existing in
India.

26. Foreign Banks
• Foreign banks are those banks, which are
incorporated in a foreign country.
• They have set-up their branches in India.
• Now foreign banks in India are permitted to set-
up local subsidiaries.
• The policy conveys that Foreign Banks in India
may not acquire Indian Ones (except for weak
banks identified by the RBI, on its terms)
• Indian subsidiaries will not be able to open
branches freely.