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Structure of Banking System in India

The Reserve Bank of India is the central bank that issues currency, regulates monetary policy and the financial system, and acts as the government's banker. Scheduled banks must register with the RBI and meet capital requirements to access RBI facilities, while non-scheduled banks do not have these privileges. Banking in India also includes cooperative banks, public and private sector commercial banks, regional rural banks, foreign banks, and development-oriented banking through initiatives like the Lead Bank Scheme.

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35 views

Structure of Banking System in India

The Reserve Bank of India is the central bank that issues currency, regulates monetary policy and the financial system, and acts as the government's banker. Scheduled banks must register with the RBI and meet capital requirements to access RBI facilities, while non-scheduled banks do not have these privileges. Banking in India also includes cooperative banks, public and private sector commercial banks, regional rural banks, foreign banks, and development-oriented banking through initiatives like the Lead Bank Scheme.

Uploaded by

Badal Dash
Copyright
© © All Rights Reserved
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Download as PPTX, PDF, TXT or read online on Scribd
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 Structure Of Banking System in India:

 RSERVE BANK OF INDIA:


• The Reserve Bank of India (RBI) is the central banking institution in
India, responsible for issuing currency, formulating and implementing
monetary policy, regulating the financial system, and serving as the
banker to the government.
• It issues currency, regulates banks, and implements monetary policies
to control inflation and foster economic stability.
• The RBI manages foreign exchange reserves, acts as the government's
banker, and plays a developmental role in supporting the growth of
financial institutions.
 SCHEDULED BANK:
• Which is registered in Second Schedule of the RBI.
• Must be carrying on a business of banking in India.
• Must have paid-up capital and reserve of an aggregate value of not
less than Rs.5 lakh(100cr.-for New).
• It must satisfy RBI- not in a manner detrimental to the interest of
depositor

 NON SCHEDULED BANK:


• Which is not included in Second Schedule of RBI.
• Not entitled to facility of borrowing & rediscounting
 CO-OPERATIVE BANKS:
 SCHEDULED COMMERCIAL
BANKS:
PUBLIC SECTOR BANKS:
• SBI & Associates (SBI Act, 1955)
• Nationalized banks (1969-1980)

 PRIVATE SECTOR BANKS:


• Post Reform Period 24 banks in pvt. Sector Banks.
• Initial minimum paid up capital from Rs.100 to Rs.200
crore.
 REGIONAL RURAL BANKS:
• Bank with local knowledge and familiarity.
• Organization ability to mobilize deposits, access to money market and
modernized outlook.
• ORGANIZATION- Separate body corporate with perpetual succession
and common seal may establish its branches.
• CAPITAL- Authortised 1Cr paid up 50 Lakhs -50% subscribed by Central
Govt. -15% State Govt. -35% by Sponsor Bank.
Foreign Banks: Registered outside
india to operate in india the minimum capital
requirement of US $25 Million, spread over 3
branches, that is, US $ 10 million for the 1 st and
2nd bank respectively and US $5 million for the
3 branch.
rd

• The no. of licenses fixed is 12 per year both for new and
expansion by existing banks.
 DEVELOPMENT ORIENTED
BANKING:
• Historically, close association between banks and some traditional
industries – cotton textiles in the west, jute textiles in the east.
• Banking has not been mere acceptance of deposits and lending
money; included development banking.
• Lead Bank Scheme – opening bank offers in all important localities.
• Providing credit for development of the District.
• Mobilising savings in the district. ‘Service area approach’

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