One of the common question asked in banking interviews is the structure of banking sector in India. In India, RBI heads the organizational chart. It is the principal financial organization. Set up in 1935 under Reserve Bank of India Act 1934, RBI has two main functions: a) regulation of banks in India and b being a banker to the central and state governments. Apart from that functions of RBI might be summed up as :
- Issuing agency of currency and coins
- Distributing agency of currency and coins
- Stabilization of inflation
- Stabilizing of exchange rate of rupee
- Keeper of foreign currency reserves.
Below RBI Scheduled banks and the NBFCs. The main difference between the scheduled banks and the NBFCs are that Scheduled banks can Issue cheques for the withdrawal of their money from the account while the NBFCs do not allow the issue of cheques for withdrawal of their money.
Under the Scheduled banks there are Co-0operative banks and the Scheduled commercial banks.
The co-operative banks can be classified into:
- Urban-co-operative banks (52 in number)
- Rural Co-operative banks ( 16 in number)
The Scheduled commercial banks or SCBs are classified into 4 categories :
- Public sector banks (27 in total)
- Private sector banks (30 in number)
- Foreign banks (40 in number)
- Regional Rural Banks (196 in number)
The public sector banks comprises of:
- SBI and SBI Associates
- State bank of Hyderabad
- State bank of Travancore
- State bank of Mysore
- State bank of Patiala
- State bank of Bikaner and Jaipur