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Structure of Indian Banking System - Indian Banking System, Indian Financial system Video Lecture | Indian Financial System - B Com

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FAQs on Structure of Indian Banking System - Indian Banking System, Indian Financial system Video Lecture - Indian Financial System - B Com

1. What is the structure of the Indian banking system?
Ans. The Indian banking system is structured in a three-tiered hierarchy consisting of scheduled commercial banks, regional rural banks, and cooperative banks. Scheduled commercial banks include public sector banks, private sector banks, and foreign banks. Regional rural banks are established to cater to the banking needs of rural areas, while cooperative banks are owned and operated by cooperative societies.
2. What is the role of scheduled commercial banks in the Indian banking system?
Ans. Scheduled commercial banks play a crucial role in the Indian banking system. They are authorized by the Reserve Bank of India (RBI) to accept deposits, provide loans, and offer various banking services to the public. These banks are further classified into public sector banks, private sector banks, and foreign banks, each with its own distinct features and ownership structure.
3. How do regional rural banks contribute to the Indian banking system?
Ans. Regional rural banks (RRBs) are established to provide banking facilities in the rural areas of India. They are jointly owned by the central government, the concerned state government, and the sponsoring bank. RRBs focus on agricultural and rural development activities by providing loans for farming, livestock, and other rural-based businesses. They also offer deposit services and promote financial inclusion in rural areas.
4. What is the significance of cooperative banks in the Indian banking system?
Ans. Cooperative banks are an integral part of the Indian banking system, particularly in rural and semi-urban areas. These banks are owned and operated by cooperative societies, which are formed by individuals with a common economic or social objective. Cooperative banks provide financial services to their members, including deposit accounts, loans, and other banking facilities. They play a crucial role in promoting savings and credit facilities at the grassroots level.
5. How does the Indian banking system contribute to the overall Indian financial system?
Ans. The Indian banking system is a vital component of the Indian financial system. It mobilizes savings from individuals and businesses and channels them towards productive sectors of the economy through loans and investments. Banks facilitate domestic and international transactions, provide a safe and secure payment infrastructure, and promote financial inclusion by extending banking services to underserved areas. The banking system also helps in the efficient allocation of financial resources and supports economic growth and development.
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