Banking Sector

Banking in India today has become easy. Today you can open a bank account by simply submitting the required application forms and documents, and even getting your KYC done online. Not only that, you can apply for different financial products from the comfort of your home, and all the public and private banks in India aspire to be customer friendly and immediately cater to their requirements making banking easy. 

We will have a look at different aspects of the banking sectors in India. 

Role of Banking Systems 

The need for banking systems arises from several factors that play vital roles in the functioning of modern economies. Here are some key reasons why banking systems are essential: 

  1. Financial Intermediation: Banks act as intermediaries between savers and borrowers. They collect deposits from individuals and businesses and lend those funds to borrowers in the form of loans. By facilitating the flow of funds from surplus units to deficit units, banks support investment and economic growth. 
  2. Safekeeping of Funds: Banks provide a secure environment for individuals and businesses to store their money. By accepting deposits, banks offer a safe place for customers to keep their funds, minimizing the risk of theft or loss associated with holding large sums of cash. 
  3. Payment Facilitation: Banking systems enable the efficient transfer of funds, both domestically and internationally. Banks provide services such as electronic fund transfers, remittances, and payment processing, which facilitate transactions between individuals, businesses, and governments. This enables the smooth functioning of commerce and trade. 
  4. Credit Creation: Banks play a crucial role in credit creation, which is essential for economic growth. Through their ability to create money through lending, banks stimulate investment and consumption by providing individuals and businesses with access to credit. This, in turn, drives economic activity and helps in the expansion of businesses. 
  5. Financial Services: Banks offer a wide range of financial products and services to meet the diverse needs of customers. These services include various types of accounts (such as savings, checking, and investment accounts), loans for various purposes (such as home loans, business loans, and personal loans), credit and debit cards, insurance products, and investment opportunities. These services enable individuals and businesses to manage their finances effectively, plan for the future, and mitigate risks. 
  1. Economic Stability: Banks play a crucial role in maintaining the stability of the financial system and the overall economy. They act as custodians of monetary policy by implementing the central bank's directives, regulating the money supply, and influencing interest rates. Banks also provide stability through risk management practices, such as diversifying their loan portfolios and maintaining adequate capital reserves. 
  2. Financial Inclusion: Banking systems strive to promote financial inclusion by providing access to financial services to all segments of society. By offering basic banking services, such as savings accounts and payment facilities, banks help individuals and businesses participate in the formal economy, build assets, and improve their financial well-being. 

Banking Sector in India 

In addition to cooperative credit institutions, the Indian banking system includes 12 public sector banks, 22 private sector banks, 46 foreign banks, 56 regional rural banks, 1485 urban cooperative banks, and 96,000 rural cooperative banks. There were 213,145 ATMs in India as of September 2021, with 47.5% of them located in rural and semi-urban areas. 

Bank assets increased in all industries in 2020–2022. In 2022, the total assets of the banking industry rose to US$ 2.67 trillion. 

 The combined assets of the public and private banking sectors were respectively $1,594.41 billion and $925.05 billion in 2022. 

The banking industry in India has always been one of the most stable systems in the world, despite the global upheavals. The government has always strived to promote financial inclusion through various initiatives aimed at bringing the country's underbanked population into the banking sphere.   

Personal loan origination is expected to expand at a 27% CAGR (FY21–FY26); digital lending will grow at a 48% CAGR. 

Bank Classification in India 

In India, banks are classified into various types based on their ownership, structure, and operations. Here is an overview of the different types of banks in India: 

  1. Central Bank: The Reserve Bank of India (RBI) is the central bank of India which is responsible for formulating and implementing monetary policies and regulating the banking sector. 
  2. Commercial Banks: Commercial banks play a crucial role in the Indian banking system. Regulated under the Banking Regulation Act of 1949, these banks are profit-oriented institutions. Their main functions include accepting deposits and providing loans to individuals, businesses, and the government. The categorization of commercial banks helps provide a comprehensive and diverse banking system that meets the various banking needs of individuals, businesses, and the government in India.  Commercial banks in India can be categorized into the following types: 
  • Private Sector Banks: These banks have a majority of their stake held by private shareholders. They operate under the regulations set by the Reserve Bank of India (RBI) and offer a wide range of banking services and products to customers. 
  • Public Sector Banks: Public sector banks are banks in which the majority ownership is held by the government. These banks play a significant role in providing banking services to various sectors of the economy and implementing government schemes and policies. 
  • Regional Rural Banks: Regional Rural Banks (RRBs) are established with the aim of providing banking and financial services to rural and semi-urban areas. They are formed through a partnership between the government, sponsor banks (public or private sector banks), and the respective state government. 
  • Foreign Banks: Foreign banks operate in India with headquarters located outside the country. They are governed by the regulations of both their home country and the Indian regulatory authorities. These banks offer a range of services and cater to both corporate and retail customers. 
  1. Co-operative Banks: In India, there are two types of co-operative banks.  
  • State Co-operative Banks: These banks serve as the apex institutions for co-operative banks within a specific state. They provide guidance, support, and coordination to the co-operative banks operating at the district or local levels. 
  • Urban Co-operative Banks: These co-operative banks primarily operate in urban and semi-urban areas. They cater to the banking needs of individuals, businesses, and communities in cities and towns, offering services such as deposits, loans, and other financial products. 
  1. Scheduled Banks: Scheduled banks in India are commercial banks that are listed in the Second Schedule of the Reserve Bank of India Act, 1934. To be classified as a scheduled bank, they need to fulfill certain criteria, including having a paid-up capital of Rs. 5 lakh or more. Being listed in the Second Schedule grants these banks certain privileges and benefits, including access to the central bank's credit facilities and the ability to conduct business across the country. Scheduled banks play a vital role in the Indian banking system, serving as key financial intermediaries and contributing to the country's economic growth. 
  1. Non-Scheduled Banks: Non-scheduled banks in India are local area banks that are not listed in the Second Schedule of the Reserve Bank of India Act, 1934. These banks operate at a local or regional level and cater to the banking needs of specific areas or communities. Unlike scheduled banks, non-scheduled banks do not have access to certain privileges and facilities provided by the central bank. They are subject to regulations and supervision by the Reserve Bank of India but have certain limitations compared to scheduled banks in terms of their scope of operations and coverage. 
  2. Small Finance Banks: Small Finance Banks in India are niche banks licensed under Section 22 of the Banking Regulation Act, 1949. Their primary objective is to provide financial inclusion to underserved sections of society, including inclusive micro industries, unorganized sector entities, and marginal farmers. These banks are governed by the provisions of the Reserve Bank of India Act, 1934. By offering specialized banking services, Small Finance Banks aim to address the banking needs of economically weaker sections and contribute to inclusive economic growth. 
  3. Payments Banks: Payments banks are a recently introduced banking model in India, with the concept developed by the RBI. These banks have the authorization to accept deposits, but with certain restrictions - the maximum limit being Rs. 1 lakh per customer. The primary focus of payments banks is to provide essential financial services and foster financial inclusion. They offer various services such as ATM cards, net banking, and digital payment facilities. The overarching objective of payments banks is to extend the reach of banking services, particularly to unbanked individuals, and promote the adoption of digital transactions. 

List of Public Sector Banks in India 

Given below in the table is the list of all the public sector banks in India: 

Name of the Bank 

Address 

Bank of Baroda 

Central Office, P.O. Box No. 10046, 9th Floor, Baroda Corporate Centre, Bandra Kurla Complex, Bandra (East), Mumbai-400 051. 

Bank of India 

Head Office, Star House, C-5, G-Block, Bandra Kurla Complex, Bandra (East), Mumbai-400 051 

Bank of Maharashtra 

Head Office, Lokmangal, 1501, Shivaji Nagar, Pune-411 005. 

Canara Bank 

Head Office, 112, J.C. Road, P.B. No. 6648, Bangalore-560 002. 

Central Bank of India 

Head Office, Chandramukhi, Nariman Point, Mumbai-400 021. 

Indian Bank 

Head Office, 31, Rajaji Road, Chennai-600 001 

Indian Overseas Bank 

Central Office, 763, Anna Salai, P.B. No. 3765, Chennai-600 02. 

Punjab National Bank 

Head Office, Plot No 4, Sector-10, Dwarka New Delhi-110 066. 

Punjab & Sind Bank 

Head Office, Bank House, 21, Rajindra Place, New Delhi-110 008. 

Union Bank of India 

Head Office, 239, Vidhan Bhavan Marg, Nariman Point, Mumbai-400 021. 

UCO Bank 

Head Office, 10, B.T.M. Sarani, Brabourn Road, Calcutta-700 001. 

State Bank of India 

Central Office, State Bank Bhavan, Madam Cama Road, Mumbai-400 021 

List of Private Sector Banks in India 

Given below in the table is the list of all the private sector banks in India: 

Serial Number 

Name of the Bank 

Axis Bank Ltd. 

Bandhan Bank Ltd. 

CSB Bank Ltd. 

City Union Bank Ltd. 

DCB Bank Ltd. 

Dhanlaxmi Bank Ltd 

Federal Bank Ltd. 

HDFC Bank Ltd 

ICICI Bank Ltd. 

10 

Induslnd Bank Ltd 

11 

IDFC First Bank Ltd 

12 

Jammu & Kashmir Bank Ltd. 

13 

Karnataka Bank Ltd. 

14 

Karur Vysya Bank Ltd 

15 

Kotak Mahindra Bank Ltd. 

16 

Lakshmi Vilas Bank Ltd 

17 

Nainital Bank Ltd. 

18 

RBL Bank Ltd. 

19 

South Indian Bank Ltd. 

20 

Tamilnad Mercantile Bank Ltd. 

21 

YES Bank Ltd. 

22 

IDBI Bank Ltd. 

List of Foreign Banks in India   

Given below in the table is the list of all the foreign banks in India:   

Serial Number 

Name of the Bank 

AB Bank Ltd. 

American Express Banking Corporation 

Abu Dhabi Commercial Bank Ltd. 

Australia and New Zealand Banking Group Ltd. 

Bank of America 

Bank of Bahrain & Kuwait BSC 

Bank of Ceylon 

Bank of Nova Scotia 

Barclays Bank Plc. 

10 

BNP Paribas 

11 

C.T.B.C. Bank Co., Ltd. 

12 

Citibank 

13 

Coöperatieve Rabobank U.A. 

14 

Credit Agricole Corporate & Investment Bank 

15 

Credit Suisse A.G. 

16 

D.B.S. Bank India Limited 

17 

Deutsche Bank 

18 

Doha Bank Q.P.S.C. 

19 

Emirates Bank NBD 

20 

First Abu Dhabi Bank P.J.S.C. 

21 

FirstRand Bank Ltd 

22 

HSBC Bank 

23 

Industrial & Commercial Bank of China Ltd. 

24 

Industrial Bank of Korea 

25 

J.P. Morgan Chase Bank N.A 

26 

JSC VTB Bank 

27 

K.E.B. Hana Bank 

28 

Kookmin Bank 

29 

Krung Thai Bank Public Co. Ltd. 

30 

M.U.F.G. Bank, Ltd. 

31 

Mashreq Bank P.S.C. 

32 

Mizuho Bank Ltd. 

33 

National Australia Bank 

34 

PT Bank Maybank Indonesia TBK 

35 

Qatar National Bank (Q.P.S.C.) 

36 

S.B.M. Bank (India) Limited 

37 

Sberbank 

38 

Shinhan Bank 

39 

Societe Generale 

40 

Sonali Bank Ltd. 

41 

Standard Chartered Bank 

42 

Sumitomo Mitsui Banking Corporation 

43 

The Royal Bank of Scotland plc 

44 

United Overseas Bank Ltd 

45 

Westpac Banking Corporation 

46 

Woori Bank 

List of Small Finance Banks in India   

Given below in the table is the list of all the Small Finance banks in India:   

Serial Number 

Name of the Bank 

AU Small Finance Bank Ltd. 

Capital Small Finance Bank Ltd. 

Equitas Small Finance Bank Ltd. 

ESAF Small Finance Bank Ltd. 

Fincare Small Finance Bank Ltd. 

Jana Small Finance Bank Ltd. 

North East Small Finance Bank Ltd. 

Suryoday Small Finance Bank Ltd. 

Ujjivan Small Finance Bank Ltd. 

10 

Utkarsh Small Finance Bank Ltd. 

Bank Schemes in India 

There are various schemes offered by banks in India in cohesion with the Government of India with the aim of providing financial assistance to different categories of people especially those who belong to economically and socially weaker groups. Given below is the list of some of the bank schemes offered in India: 

  1. Pradhan Mantri Jan Dhan Yojana (PMJDY): PMJDY was announced on 15 August 2014 with the aim of ensuring that every household in India has bank account and aimed at financial inclusion for all. According to this, a person without a savings account may open one without the need for a minimum balance and may open a modest account if they self-certify that they lack any of the legally necessary documentation needed to open a savings account. The account holders are given a RuPay debit card with a built-in accident insurance policy worth Rs.2 lakh and access to an overdraft facility after six months of credit history or successful account operation.  
  2. Pradhan Mantri Suraksha Bima Yojana (PMSBY): People in the age range of 18 to 70 who have bank accounts and give their permission to enable auto-debit on or before May 31 for the coverage period of 1 June to May 31 on an annual renewal basis are eligible for the scheme. For accidental death and total disability, the risk coverage under the plan is Rs.2 lakh, and for partial disability, it is Rs. 1 lakh. A single installment of the Rs. 20 annual premium is to be taken out of the account holder's bank account using the "auto-debit" feature. Public Sector General Insurance Companies, or any other General Insurance Company prepared to offer the product on comparable conditions with the required approvals and join up with banks for this reason, are the ones offering the plan. A premium of Rs 20 per year will be deducted from the account holder's bank account through a one-time 'automatic debit' facility. The plan is offered by the general insurance companies of the public sector or any other general insurance company willing to offer the product on similar terms with the necessary approval and cooperation with banks for this purpose. As of 06.30, 2022, cumulative subscriptions are over 29.01 cores according to PMSBY.   
  1. Pradhan Mantri Mudra Yojana (PMMY): This scheme debuted in 2015 where under loans up to Rs 50,000 are granted under the 'Shishu' sub-program; from Rs.50,000 to Rs.5,000,000 under the ‘Kishore’ sub-program; and from Rs.5.0 Lakh to Rs.10.0 Lakh under the ‘Tarun’ sub-program. Collateral is not needed to secure loans. Rs.16,22,203 crores in sanction were available in 30.7 crores of accounts as of 20 August 2021. 
  2. Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY): PMJJBY is available to people between the ages of 18 and 50 whose bank accounts agree to join/activate direct debit. Aadhar is the main KYC of the bank account. Lifetime insurance worth Rs.2 lakh for a period of one year from June 1 to May 31 and renewable. The annual premium is Rs.436, and it must be automatically deducted from the subscriber's bank account on or before 31 May of each year, depending on the option chosen. The Life Insurance Corporation and all other life insurers that are prepared to offer the product on comparable conditions with the required approvals and tie up with banks for this reason are offering the scheme. Over 13.11 crore people have enrolled in PMJJBY as of 30 June 2022. 
  3. Atal Pension Yojana (APY): APY is open to all bank/postal savings account holders between the ages of 18 and 40, and contributions vary according to selected pension level. Subscribers will receive a guaranteed minimum monthly stipend of Rs.1,000, Rs.2,000, Rs.3,000, Rs 4,000 or Rs.5,000 at age 60. Under APY, subscribers will be able to receive a monthly pension upon their death the pension capital, accumulated at the age of 60 years is returned to the applicant's agent register. The minimum pension will be guaranteed by the government, i.e., if the capital accumulated on a contribution basis produces a lower than estimated return on investment and is not sufficient to provide the guaranteed minimum pension, the central government will finance this shortfall. In addition, if the return on investment is higher, policyholders will receive enhanced retirement benefits. In the event of the subscriber's premature death, the government has chosen to provide the spouse of the subscriber the option to continue making contributions to the subscriber's APY account for the remainder of the vesting term, up until the original subscriber would have reached the age of 60. Until the spouse's death, the subscriber's spouse is entitled to receive the same pension payment as the subscriber. The nominee of the subscriber is entitled to inherit the pension money that was collected up to the subscriber turned 60 after the deaths of both the subscriber and the spouse. A total of 321.02 lakh customers were signed up for APY as of31 July 2021. 
  4. Stand Up India Scheme: This scheme facilitates bank loans from Rs.10 lakh to Rs.1 crore to at least one Scheduled Caste/Tribal borrower and at least one female borrower per bank branch. products for start-ups. This business may be in a manufacturing, service, or agricultural-related trade. The plan being implemented by all commercial banks is scheduled to benefit at least 2.5 thousand borrowers. The program is active and loans are granted through ordinary commercial banks throughout the country. The Credit Guarantee Fund for Stand-Up India was established by the Indian government to expand collateral-free coverage. (CGFSI). On the special Stand-Up India website, applicants can also submit their applications for the programme online.(www.standupmitra.in). 1,18,462 accounts have received a total of Rs.26,688 crore in funding as of 23 August 2021. 
  5. Pradhan Mantri Vaya Vandana Yojana (PMVVY): This scheme was launched in 2016 to protect people aged 60 and over against future declines in interest income due to uncertain market conditions, as well as to provide social security in old age. The scheme is run through the Life Insurance Corporation of India (LIC) and is open to underwriting until 31 March 2023.  For the fiscal year 2020–21 and a 10-year policy period, PMVVY guarantees an assured rate of return of 7.40% annually. Yojna pension payment method is monthly, quarterly, semi-annually or annually depending on the choice of the subscriber. The minimum purchase price under the scheme is Rs.1,62,162 for a minimum pension of Rs.1,000 per month and the maximum purchase price is Rs.15 lakh per senior to receive the pension amount. is Rs.9,250.    

Bank Exams 

IBPS PO, Clerk, SO, etc. are well-known and the main source of employment for both recent graduates and seasoned professionals. Other than this, the main draws of working in the banking industry are the lucrative pay, job stability, benefits, and allowances.  

Because of these incentives, many of students seek for openings at banks. This is what causes the competition to grow exponentially more difficult. The official authorities put you through a variety of IQ tests to prepare you for such a situation. 

Along with the recruitment body IBPS, which conducts a number of bank tests on behalf of numerous other banks enrolled with it, the key bank exams in India include SBI, RBI, NABARD, etc. Every year, these banks hold exams to hire suitable candidates for a number of bank openings. 

Given below is the list of some of the bank exams that you can appear for: 

Name of the Bank Exam 

Conducting Body 

RBI Assistant 

Reserve Bank of India 

IBPS RRB PO 

Institute of Banking Personnel Selection 

IBPS RRB Clerk 

Institute of Banking Personnel Selection 

IBPS PO 

Institute of Banking Personnel Selection 

IBPS Clerk 

Institute of Banking Personnel Selection 

IBPS SO 

Institute of Banking Personnel Selection 

SBI PO 

State Bank of India 

SBI SO 

State Bank of India 

SBI Clerk 

State Bank of India 

There are private bank exams that you can appear for. The list is given below: 

  1. OSCB BA/AM/SM 
  2. PO & Clerk in J&K Bank 
  3. HP State Cooperative Bank 
  1. Karnataka Bank PO 
  2. Bihar State Cooperative Bank 
  3. Saraswat Bank 
  4. Punjab State Cooperative Bank 
  5. Canara Bank SO 
  1. South Indian Bank Legal Officers 
  2. J&K Bank SO 
  3. Cotton Corp. Management Trainee 
  4. HARCO Clerk, Jr Accountant, and Senior Accountant 

There are other Government Bank exams that you can appear for. The list is given below: 

  1. ESIC SSO 
  2. ECGC PO 
  3. Nainital Bank Clerk and PO  
  4. ESIC UDC/MTS/Steno 
  5. Central Bank of India SO 
  1. India Post 
  2. Specialist Officers Scale-I & II in Bank of Maharashtra 
  3. Bank Note Press, Dewas 
  4. SBI Pharmacist 
  5. Punjab and Sind Bank 
  1. GIC Assistant Manager 
  2. Exim Bank SO 
  3. Indian Overseas SO 
  4. IDBI Bank SO 
  5. Exim Bank Management Trainee 
  1. Bank of India Security & Fire Officer 
  2. Canara Bank SO 
  3. Bank of India Officer Scale 1,2,3,4 
  4. Bank of India Officer 
  5. Punjab National Bank SO 
  1. National Housing Bank Assistant Manager 
  2. Nainital Bank SO 
  3. Employees Provident Fund Organisation Assistant 
  4. Employees Provident Fund Organisation SSA 

You can keep a tab where these banks will announce opening for different roles. You can then accordingly apply for these roles by filling the application form and submitting the necessary documents. You can then appear for the exam. If you clear the round, you will be recruited for the role for which you had applied for.  

FAQs on Banking Sector

  • Which bank exam in India is considered to be the toughest?

    The hardest bank exams are those given for Grade A positions, such as specialist officer, etc. Despite this, with sufficient review and a benchmark for your exam readiness, you can ace the test. 

  • Where can I obtain the list of NBFCs that are registered and the directives given to NBFCs?

    On the Reserve Bank of India website, you may find the list of NBFCs that have been registered.  

  • What various types of banks are there in India's banking industry?

    Commercial banks and cooperative banks are the two basic categories into which banks in India can be divided. 

  • Can you do banking operations at GIFT-IFSC?

    Yes, after obtaining an IFSCA license, a banking entity (including both Indian and foreign banks) may function as an IFSC Banking Unit (IBU). 

  • Which bank exam is the easiest to clear?

    Almost all bank exams can be passed with ease if you have the proper preparation. The easiest bank exams, meanwhile, can be said to be IBPS RRB and IBPS Clerk. 

  • Can non-scheduled banks borrow from the central bank?

    Non-scheduled banks can only borrow from the central bank, such as the Reserve Bank of India (RBI), in exceptional circumstances or during emergencies. They have limited access to borrowing facilities compared to scheduled banks. 

  • How many public sector banks are there in India?

    India has a total of 12 nationalized banks that are owned and controlled by the government. 

  • Do small finance banks provide debit cards?

    Yes, small finance banks do provide debit cards along with other banking services such as internet banking, mobile banking, and more. 

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