CHAPTER 1.0
INTRODUCTION
WHAT ARE BANKS?
What is BANKING REGULATION ACT 1949 has to say about BANKS?
The accepting, for the purpose of lending or investment of deposits of money from the public , repayable on demand or otherwise and withdrawal by cheque , draft , order or otherwise.
In simple words banking relates to :- |
Accepting of deposit of money from public |
For the purpose of lending that is making loans |
Making investments |
Besides these banks have got 3 unique features :-
The deposits are repayable on demand.
Other than bank nobody or any organisation can not use word bank behind their name.
Only banks can issue cheque book.
Who is responsible for the regulation of banks? Banking regulation act 1949 authorises RESERVE BANK OF INDIA to regulate and control banks in INDIA. Even foreign banks also need to comply with the directions issued by the RBI. |
CLASSIFICATION OF BANKS
RBI ACT | OWNERSHIP | CONSTITUTION | ACTIVITY |
SCHEDULED BANK | PUBLIC SECTOR BANK | STATUTORY BANK | COMMERCIAL BANK |
NON SCHEDULED BANK | PRIVATE BANKS :- INDIAN BANKS FOREIGN BANKS | NATIONALISED BANKS | DEVELOPMENT BANK |
- | COOPERATIVE BANKS | REGIONAL RURAL BANK | - |
Table1.1source:- gyanam publication "financial glossary"
WHAT ARE COOPERATIVE BANKS?
Co-operative banks play an important role in meeting the credit requirements of both the urban and rural India. Though in the bank dominated financial system, these institutions account for a small share in the total credit they hold a significant position in credit delivery as they cater to different geographic locations and demographic categories1. The wide network of co-operative banks, both rural and urban, supplements the commercial banking network for deepening financial intermediation by bringing a large number of depositors/borrowers under the formal banking network. Demographically, these institutions have enabled access to financial services to low and middle-income groups in both rural and urban...