Banking and Its Types
Banking is directly or indirectly connected with the trade of a country
and the life of each individual. It is an industry that manages credit,
cash, and other financial transactions. In banking, the commercial bank
is the most influential institution for any country’s economy or for
providing any credit to its customers.
In India, a banking company is responsible for transacting all the
business transactions including withdrawal of cheques, payments,
investments, etc. In other words, the bank is involved in the deposit and
withdrawal of money, repayable on demand, savings, and earning a
decent amount of profits by lending money.
Banks also help to mobilize the savings of an individual, making funds
accessible to businesses and help them to start a new venture.
However, unlike commercial banks, private sector banks are owned,
operated, and regulated by private investors and have the right to operate
according to the market forces.
Types of Banking
Banks are further segregated into four types.
Commercial banks: These banks are regulated by Banking Regulation
Act, 1949. They accept the public deposit from the public for lending or
investment.
Cooperative banks: Cooperative banks are undertaken by the State
Cooperative Societies Act and give cheap credit to their members. The
rural population is dependent on the cooperative banks for its financial
backup.
Banking is directly or indirectly connected with the trade of a country
and the life of each individual. It is an industry that manages credit,
cash, and other financial transactions. In banking, the commercial bank
is the most influential institution for any country’s economy or for
providing any credit to its customers.
In India, a banking company is responsible for transacting all the
business transactions including withdrawal of cheques, payments,
investments, etc. In other words, the bank is involved in the deposit and
withdrawal of money, repayable on demand, savings, and earning a
decent amount of profits by lending money.
Banks also help to mobilize the savings of an individual, making funds
accessible to businesses and help them to start a new venture.
However, unlike commercial banks, private sector banks are owned,
operated, and regulated by private investors and have the right to operate
according to the market forces.
Types of Banking
Banks are further segregated into four types.
Commercial banks: These banks are regulated by Banking Regulation
Act, 1949. They accept the public deposit from the public for lending or
investment.
Cooperative banks: Cooperative banks are undertaken by the State
Cooperative Societies Act and give cheap credit to their members. The
rural population is dependent on the cooperative banks for its financial
backup.
