Indian banking system and its structure

Indian banking system is a network of banks, financial institutions, and regulators that provide financial services to individuals, businesses, and the government. The banking system in India is regulated by the Reserve Bank of India (RBI), which is the central bank of the country. The Indian banking system is divided into two categories: Scheduled Banks and Non-Scheduled Banks.

Scheduled Banks

Scheduled banks are those banks that are included in the Second Schedule of the Reserve Bank of India Act, 1934. Scheduled banks are further classified into two categories: Commercial Banks and Co-operative Banks. Commercial banks can be further classified into Public Sector Banks, Private Sector Banks, and Foreign Banks.

Public Sector Banks

Public sector banks are those banks in which the government has a majority stake. These banks are accountable to the government and are subject to various rules and regulations.

Private Sector Banks

Private sector banks are those banks in which the government has no stake. These banks are owned and managed by individuals or companies.

Foreign Banks

Foreign banks are those banks which are incorporated in a foreign country, but have a presence in India.

Co-operative Banks

Co-operative banks are banks which are owned and managed by their members. These banks cater to the needs of small borrowers and are mostly located in rural areas.

Non-Scheduled Banks

Non-scheduled banks are those banks which are not included in the Second Schedule of the Reserve Bank of India Act, 1934. These banks are not subject to the same rules and regulations as scheduled banks.

Indian financial system

The Indian financial system is a network of financial institutions, markets, and regulators that provide financial services to individuals, businesses, and the government. The financial system in India is regulated by various regulatory bodies such as the Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), Insurance Regulatory and Development Authority of India (IRDAI), and Pension Fund Regulatory and Development Authority (PFRDA).

Financial institutions

Financial institutions in India include banks, non-bank financial companies (NBFCs), mutual funds, insurance companies, and pension funds.

Financial markets

Financial markets in India include the capital market, money market, and foreign exchange market.

Regulators

Regulators in India include the Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), Insurance Regulatory and Development Authority of India (IRDAI), and Pension Fund Regulatory and Development Authority (PFRDA).

Conclusion

The Indian banking system and financial system are crucial components of the Indian economy. The structure of the Indian banking system includes scheduled banks and non-scheduled banks, while the Indian financial system includes financial institutions, markets, and regulators. The Reserve Bank of India (RBI) plays a vital role in regulating both the Indian banking system and financial system.