Types of Banks
Banks can be categorizing in numerous ways say for example on the basis of their tenure, their utilities and origin like native or foreign bank.
The below given classification is made by considering the role of the banks:
Commercial bank mainly focuses on trade, finance and commerce services including banking services. In this banks the duration of deposit is short that’s why you will get loan only for short period. If you are looking for medium or long duration loans provider banks than commercial banks are not a suitable choice.
These banks provides loans for medium as well as longer duration and mainly concentrated for industrial development that’s why they are also know as investment bank, development bank. One can deposit his money for longer duration in these banks. Some well known industrial banks are Industrial Development Bank of India (IDBI), Industrial Finance Corporation of India (IFCI). These banks also functions as a guide of economy of our country.
These banks are also known as land mortgage banks and land development banks. Agricultural sector is uncertain that is why generally commercial banks and many others did not show any interest to provide loans to farmers. So the government decided to construct a separate bank which is totally dedicated for agricultural sector only. These land development banks provide short term as well as long term loans to the farmers.
These banks are related to foreign exchange. The main aim of these banks is to enhance foreign trade by buying of exchanging bills; make global selling and buying easy by currency exchange and sells.
Saving banks are just to enhance the tendency of saving in people of the country. Bonds and securities are the result of the investment of the saving account money. Various commercial as well as post offices are work as a saving bank.
Central bank is the main bank which regulates the monetary policy of a country, flow of currency, known as the lender of the last resort and so on. The authority to issue currency of the country is under the central bank. The regulation of the other bank is done by the central bank.
The other way of classification of the bank is its authority which is described below:
Public sector bank:
These banks are owned by the government and their primary focus is to serve the public not to make profit. Some examples of the public sector banks are State Bank of India, Regional Rural Bank, Nationalized banks.
Private Sector Bank:
These banks are run by the private organizations. The main aim of these banks is to make profit and these banks are controlled by the market ups and downs. Example: Axis Bank, ICICI bank, Kotak Mahindra Bank, Indusland Bank, Karur Vysya Bank, Yes Bank and so on.