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1. Scheduled Banks:
Scheduled Banks refer to those banks which have been included in the Second Schedule
of Reserve Bank of India Act, 1934.
In India, scheduled commercial banks are of three types:
(i) Public Sector Banks:
These banks are owned and controlled by the government. The main objective of these
banks is to provide service to the society, not to make profits. State Bank of India, Bank
of India, Punjab National Bank, Canada Bank and Corporation Bank are some examples
of public sector banks.
Public sector banks are of two types:
(a) SBI and its subsidiaries;
(b) Other nationalized banks.
(ii) Private Sector Banks:
These banks are owned and controlled by private businessmen. Their main objective is to
earn profits. ICICI Bank, HDFC Bank, IDBI Bank is some examples of private sector
banks.
(iii) Foreign Banks:
These banks are owned and controlled by foreign promoters. Their number has grown
rapidly since 1991, when the process of economic liberalization had started in India.
Bank of America, American Express Bank, Standard Chartered Bank are examples of
foreign banks.
2. Non-Scheduled Banks:
Non-Scheduled banks refer to those banks which are not included in the Second Schedule
of Reserve Bank of India Act, 1934.
Introduction To Banks
Banks have developed around 200 years ago. The natures of banks have changed as the
time has changed. The term bank is related to financial transactions. It is a financial
establishment which uses, money deposited by customers for investment, pays it out
when required, makes loans at interest exchanges currency etc. however to understand the
concept in detail we need to see some of its definitions. Many economists have tried to
give different meanings of the term bank.
According to Prof. Sayers, "A bank is an institution whose debts are widely accepted in
settlement of other people's debts to each other." In this definition Sayers has emphasized
the transactions from debts which are raised by a financial institution.
According to the Indian Banking Company Act 1949, "A banking company means any
company which transacts the business of banking . Banking means accepting for the
purpose of lending of investment of deposits of money from the public, payable on
demand or other wise and withdraw able by cheque, draft or otherwise."