Banking System in India

How to Work Bank

This is the complete information on how to work banking system in India at banksifsccodes.com. Here you can know about the banking systems in India.

The banking system in India is well structured and adequately managed by the central monetary authority of the country under whose purview the gamut of banks fall under. The Banks that fall under direct supervision of the RBI can be grouped into 3 distinct categories. Namely, they are the Commercial banks, Cooperative banks and the Regional Rural Banks.

The RBI is the supreme monetary and banking authority in the country and controls the banking system in India. It is called the Reserve Bank’ as it keeps the reserves of all commercial banks.

Banking System in India

Commercial Bank Functions

The functions of the commercial banks are given utmost importance pertaining to the imperative fact that Commercial banks mobilize savings of general public and make them available to large and small industrial and trading units mainly for working capital requirements. The working of the commercial banks is rudimentary and affects the entire banking operations of the country.

Commercial banks in India are largely Indian-public sector and private sector with a few foreign banks. The public sector banks, account for more than 92 percent of the entire banking business in India. Accruing to this reason the Public sector banks occupy a dominant position in the commercial banking. The State Bank of India and its 7 associate banks along with another 19 banks are the public sector banks.

How to work Banking System in India

“Hint: For making any online transactions such as RTGS, NEFT and IMPS you should have ifsc code to identify the particular bank branches. For example, the icici bank ifsc code for a particular branch is ICIC0000479

The Regional Rural Banks (RRBs) the newest form of banks. They came into came into existence in the middle of 1970s (sponsored by individual nationalized commercial banks) with the objective of developing rural economy by providing credit and deposit facilities for agriculture and other productive activities of al kinds in rural areas.

The emphasis is on providing such facilities to small and marginal farmers, agricultural laborers, rural artisans and other small entrepreneurs in rural areas. They are thought to be of utmost importance to the development of the country, as India is predominantly an agrarian economy.

Cooperative banks are so-called because they are organized under the provisions of the Cooperative Credit Societies Act of the states. The major beneficiary of the Cooperative Banking is the agricultural sector in particular and the rural sector in general.

The cooperative credit institutions operating in the country are mainly of two kinds: agricultural (dominant) and non-agricultural.

There are two separate cooperative agencies for the provision of agricultural credit: one for short and medium-term credit, and the other for long-term credit. The former has three tier and federal structure.

At the apex is the State Co-operative Bank (SCB) (cooperation being a state subject in India), at the intermediate (district) level are the Central Cooperative Banks (CCBs) and at the village level are Primary Agricultural Credit Societies (PACs).

These are the general structure of the banking system in India and a brief description of how it works.


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