Structure of the Indian banking system

The organization of banking system in Indian can broadly be divided into three categories, viz., and the central of the country known as the Reserve Bank of India, the Commercial banks and the Co-operative banks. As the supreme monetary and banking authority in the country, RBI has the responsibility to control the banking system in the country. It keeps the reserves of all commercial banks and hence is known as the “Reserve Bank”.

Commercial banks have been in existence in India for many decades. They mobilize savings in urban areas and make them available to large and small industrial and trading units mainly for working capital requirements. After, 1969, commercial banks are broadly classified into nationalized or public sector banks and private sector banks. The State Bank of India and its associate banks along with another 20 banks are the public sector banks.

The private sector banks include a small number of Indian scheduled banks which have not been nationalized and branches of foreign banks operating in India- commonly known as foreign exchange banks.

The Regional objective of providing (RRBs) came into existence in the middle of 1970s with the specific objective of providing credit and deposit facilities particularly to the small and marginal farmers, agricultural labourers and artisans and small entrepreneurs. RRBs have the responsibility to develop agriculture, trade, commerce and industry in the rural areas. RRBs are essentially commercial banks but their area of operation is generally limited to a district.

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