Structure of Commercial Banks

Topics: Banks of India, Government-owned banks in India, Bank Pages: 4 (696 words) Published: April 12, 2013

Commercial banks can be divided into 2 main categories:
(1) Scheduled banks
(2) Non-scheduled banks

(1) Scheduled bank: A scheduled bank is so called because it has been included in the second schedule of Reserve bank of India Act, 1934. To be included in the schedule, the bank must satisfy the following 3 conditions: (a) It must have paid up capital and reserves of an aggregate value of at least Rs. 5 lakhs; (b) It must satisfy the reserve bank that its affairs are not detrimental to the interest of its depositors; (c) It must be a corporation or co-operative society and not a partnership or a single ownership firm.

(2) Non-scheduled bank: Banks whose names do not figure in the second schedule of RBI Act are non-scheduled banks. Scheduled banks can be further categorized into:
(a) Indian banks
(b) Foreign banks

Indian banks are those banks which are registered or incorporated in the country. These banks are the dominant segment of total commercial banks and have their presence in every nook and corner of the country. Indian banks can be categorized into:

(1) Public sector banks
(2) Private sector banks

1. Public sector banks: Public sector banks are the banks in which atleast 51 % share is of the government. Public sector banks dominate commercial banking in India. The government of India entered commercial banking when it took over Imperial bank of India in 1955 and converted it into State Bank of India on 1 July, 1955. State Bank of India has 6 subsidiaries. These banks are collectively known as State Bank Group. In July, 1969, the government of India took an important step of nationalizing 14 banks. In April 1980, 6 more banks were nationalized. In October 1975, another category was added to the public sector banks in the form of Regional Rural Banks. These banks have been set up with the objective of providing credit and other facilities for agriculture and...
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