Banking Structure in India

 The Reserve Bank of India is the central banking and monetary authority of  India , acts as the regulator and supervisor of commercial banks.

Public Sector Banks

Public Sector Banks are those in which the majority stake is held by the Government of India.

Currently 27 public sector banks are there,

 include SBI and its 6 associate banks(State bank of Indore, State bank of Jaipur etc) 

 and 19 nationalised banks (Allahabad bank, Canara bank etc) 

 and IDBI bank.

Private Sector Banks

Majority of share capital is held by private individuals and corporates.

The private banks which are not nationalized in 1969 and 1980 are collectively known as old private sector banks. Eg. Jammu and Kashmir Bank, Lord Krishna bank etc..

In July 1993, RBI permitted the private sector banks in the banking system. This resulted in creation of new sector of banks calld New Private sector banks. Eg. ICICI,HDFC,UTI etc

At end of March 2009, 7 new private sector banks and 15 old private sector banks operating in India.

Foreign Banks

Foreign Banks have their registered and head offices in a foreign country but operate their branches in India. Foreign banks in India are required to adhere to all banking regulations. 

Under the World Trade Organisation (WTO) agreement , RBI allows a minimum 12 branches of all foreign banks to be opened in a year.

Regional Rural Banks

RRB established during 1976-1987 to develop rural economy. Each RRB is owned jointly by Central Government, Concerned State Government and sponsoring public sector commercial banks in the ratio (50:15:35) resp.

Co-Operative Banks

Co-Operative banks cater to the financial needs of agriculture, retail trade,small industry and self employed businessman in urban,semi-urban and rural areas.
Oldest segment in the Indian banking system.

Reserve Bank Of India (RBI)

The Reserve Bank of India is the central bank of  the country. It was established on April 1,1935 under the reserve bank of India act, 1934.

As the Central bank of the country, RBI performs a wide range of functions

• Act as the currency authority
• Controls money supply and credit
• Manages foreign exchanges
• Serves as a banker to the government
• Builds up and strengthens the countries financial infrastructure
• Acts as the banker of banks
• Supervises banks