India Banking System
An overview of Indian Financial System
The Indian financial system does not have an overarching regulator. Instead, it is regulated by several independent regulators in the sectors of banking, insurance, capital market and various service sectors. Reserve Bank of India (RBI), established in 1935 under the Reserve Bank of India Act, is the central bank that regulates Indian banking system. Insurance Development and Regulatory Authority (IDRA), established under the 1999 Insurance Development and Regulatory Authority Act, is the regulatory body of Indian insurance companies. Security and Exchange Board of India (SEBI), which was established under the SEBI Act in 1992, is the regulator of Indian capital market. In addition, Ministry of Finance, Government of India is the administration that takes charge of overall Indian financial system. The ministry is also responsible for proposing and executing annual budget, tax policies and other government policies for Indian financial sector.Ã¯Â¿Â½
Indian Banking System
Scheduled Banking Structure
The chart above demonstrates the basic banking structure of India. Banks in India could be roughly divided into scheduled banks and unscheduled banks. Scheduled banks "constitute those banks, which have been included in the Second Schedule of Reserve Bank of India (RBI) Act, 1934. RBI includes only those banks in this schedule, which satisfy the criteria laid down vide section 42 (6) (a) of the Act".Ã¯Â¿Â½
The Reserve Bank of India is the central bank of India that regulates the scheduled banking sector. Under the administration of central bank are scheduled commercial banks, scheduled co-operative banks and some non-banking financial institutions.
Indian Central Bank: Reserve Bank of India
The Reserve Bank of India was established in April, 1935 under the provision of the Reserve Bank of India Act, 1934. It was nationalized in the year 1949...