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Asked a question 3 years ago

Write a note on the types of banks

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The focus of banking is varied, the

needs diverse and methods different.

Thus, we need distinctive kinds of

banks to cater to the above-mentioned complexities.

Banks can be classified into the


1. Commercial banks

2. Cooperative banks

3. Specialised banks

4. Central bank

(i) Commercial Banks: Commercial

banks are institutions dealing in

money. These are governed by Indian

Banking Regulation Act 1949 and

according to it banking means

accepting deposits of money from the

public for the purpose of lending or


Cooperative Banks: Cooperative

Banks are governed by the provisions

of State Cooperative Societies Act and

meant essentially for providing cheap

credit to their members. It is an

important source of rural credit i.e.,

agricultural financing in India.

(iii) Specialised Banks: Specialised

banks are foreign exchange banks,

industrial banks, development banks,

export-import banks catering to

specific needs of these unique activities.

These banks provide financial aid to

industries, heavy turnkey projects and

foreign trade.

(iv) Central Bank: The Central bank

of any country supervises, controls and

regulates the activities of all the

commercial banks of that country. It

also acts as a government banker. It

controls and coordinates currency and

credit policies of any country. The

Reserve Bank of India is the central

bank of our country.