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Banking regulation act 1949: Banking Regulation Act 1949 Section 5B, under this financial institution which accepts deposits from the public for the purpose of investment and credit and pays the customer in the form of checks, drafts on their demand.
Types of banks
- Central bank
- Commercial Bank
- Cooperative bank
- Development bank
A bank that is entrusted with the functions of directing and regulating the banking system of a country is known as a central bank. RBI is the central bank of our country. The RBI Act was passed in 1934 and was established on 1 April 1935.
Credit Control: Central Bank
Create Credit: Commercial Bank
Deals with the general public accept deposits, provide loans.
- Schedule bank: RBI Act 1934 comes under section 2
- Non schedule bank: Not covered under RBI Act 1934, Section 2
- Public Sector: The The majority stake is with the Government of India or RBI.
- the private sector: Most of the share capital of the bank is held by the private.
- Private bank of india
- Foreign private bank
- Small finance bank
- Payment bank
These banks are funded by the state government and to help some specific place or group of people.
- State co-operative bank: These are the highest level cooperative in all the states of the country
- District Co-operative Bank: These are built at the city or village level
- Block cooperative bank: Restricted in a small area that members are known to each other to avoid fraud
- NABARD – National Bank for Agriculture and Rural Development
- SIDBI – Small Industries Development Bank of India
- NHB – National Housing Bank
- SFC – State and Finance Cooperation
- LDB – Land and Development Bank
- MUDRA – Micro Unit Development & Refinance Agency
- EXIM – Export and Import Bank
- IDBI – Industrial Development Bank of India
- ICICI – India’s Industrial Credit and Investment Cooperation
- HDFC – Housing Development and Finance Cooperation
- HSBC – Hong Kong and Shanghai Banking Cooperation
History of bank
- Before the 18th century, the entire financial system was controlled by landlords, maharajas, moneylenders or money lenders.
- In 1770, Alexander proposed the idea of a bank to the British government but the government rejected it
- Later only in 1770, on the principle of Alexander & Co. and with 80% of its capital, the British government formed the first bank called “Bank of Hindustan”, but it failed due to lack of awareness and communication among the people. .
- Presidency Banks
- 1806 – Bank of Bengal was formed.
- 1840 – Bank of Bombay
- 1843 – Bank of Madras
- Nationalized bank
- On 1 July 1955, the Imperial Bank of India was nationalized and changed its name to SBI on the recommendation of AD GOREWALA COMMITTEE.
- In 1959, its associate banks were introduced.
- State Bank of Saurashtra
- State Bank of Hyderabad
- State Bank of Patiala
- State Bank of Mysore
- State Bank of Travancore
- State Bank of Jaipur
- First stage
On 1 July 1969, 14 banks were nationalized.
On 15 April 1980, 6 banks were nationalized.