Types of Banks in India with Classification & Example

The Indian banking sector serves as the backbone of the nation's economy, offering a diverse range of financial services to a population of over 1.4 billion. Regulated primarily by the Reserve Bank of India (RBI), the system is classified into several categories based on ownership, operation area, and specific purpose. Understanding these classifications helps navigate the range of banking solutions available, from massive public-sector giants to localized cooperative societies and small finance banks. Let us take a look at the types of banks in Indian banking ecosystem.

11 Types of Banks in India

The Indian financial landscape is multi-layered, ensuring that credit reaches urban centers, rural villages, and industrial sectors alike through specialized institutions.

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Types of Banks in India - Detailed Overview

Central Bank

The Reserve Bank of India (RBI) is the central bank of India and is responsible for regulating and supervising the country's banking system. It formulates and implements monetary policies, issues currency, manages foreign exchange reserves and acts as a banker to the government.

Services Offered by Central Bank

• Monetary policy formation
• Controlling inflation
• Currency issuance
• Banking regulation and supervision
• Overseeing payment systems
• Foreign exchange management

State Bank of India (SBI)

As the largest commercial bank in India, SBI occupies a unique position. It is a public sector giant with a massive international presence and serves as a benchmark for the industry.

Commercial Banks

Commercial banks are the most common and widely known type of banks in India. They provide a wide range of services to individuals, businesses, and industries. Commercial banks can be further classified into three categories:

• Public Sector Banks
• Private Sector Banks
• Foreign Banks

Services Offered by Commercial Banks

• Savings account
• Current account
• Business account
• Fixed deposits
• Credit cards
• Personal loans
• Home loans
• Wealth management
• Online banking
• Public provident fund
• Overdraft facilities

Nationalised Banks

These are major financial institutions where the Government of India holds a majority stake. They were originally private but were nationalised in 1969 and 1980 to ensure social welfare.

List of Public Sector Banks in India

• Bank of Baroda
• Bank of India
• Bank of Maharashtra
• Canara Bank
• Central Bank of India
• Indian Overseas Bank
• Indian Bank
• Punjab National Bank
• Union Bank of India
• Punjab & Sind Bank
• UCO Bank

Private Sector Banks

Private sector banks are owned and operated by private individuals or organizations. They are known for their innovative products, personalized services, and customer-centric approach. Private banks have gained popularity in recent years and have a significant presence in urban areas.

List of Private Sector Banks in India

1. Axis Bank
2. Bandhan Bank
3. City Union Bank
4. CSB  Bank
5. DCB Bank
6. Dhanlaxmi Bank
7. Federal Bank
8. HDFC Bank
9. ICICI Bank
10. IndusInd Bank
11. IDFC First Bank
12. Jammu and Kashmir Bank
13. Karnataka Bank
14. Karur Vysya Bank
15. Kotak Mahindra Bank
16. Lakshmi Vilas Bank
17. Nainital Bank
18. RBL Bank
19. South Indian Bank
20. Tamilnad Mercantile Bank
21. Yes Bank

Foreign Banks

Foreign banks are banks with their headquarters located outside India but operating within the country. These banks bring in global expertise and offer specialized services to individuals and businesses. Foreign banks contribute to the overall competitiveness and diversity of the Indian banking sector.

List of Foreign Banks in India

1. AB Bank Ltd.
2. Abu Dhabi Commercial Bank Ltd.
3. American Express Banking Corporation
4. Australia and New Zealand Banking Group Ltd.
5. Barclays Bank Plc.
6. Bank of America
7. Bank of Bahrain & Kuwait BSC
8. Bank of Ceylon
9. Bank of Nova Scotia
10. BNP Paribas
11. Citibank N.A
12. Cooperatieve Rabobank U.A.
13. Credit Agricole Corporate & Investment Bank
14. Credit Suisse A.G
15. CTBC Bank Co., Ltd.
16. DBS Bank India Limited
17. Deutsche Bank
18. Doha Bank Q.P.S.C
19. Emirates Bank NBD
20. First Abu Dhabi Bank PJSC
21. FirstRand Bank Ltd
22. HSBC Ltd
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. KEB Hana Bank
28. Kookmin Bank
29. Krung Thai Bank Public Co. Ltd.
30. Mashreq Bank PSC
31. Mizuho Bank Ltd.
32. MUFG Bank, Ltd.
33. NatWest Markets Plc
34. PT Bank Maybank Indonesia TBK
35. Qatar National Bank (Q.P.S.C.)
36. Sberbank
37. SBM Bank (India) Limited
38. Shinhan Bank
39. Societe Generale
40. Standard Chartered Bank
41. Sumitomo Mitsui Banking Corporation
42. United Overseas Bank Ltd
43. Woori Bank
44. UBS AG

Co-operative Banks

Cooperative banks are financial institutions that are owned and operated by their members, who are typically individuals, small businesses, or agricultural cooperatives. These banks provide banking services to their members and are regulated by the Banking Regulation Act, of 1949.

Scheduled State Co-operative Banks

These cooperative institutions are included in the Second Schedule of the RBI Act. They act as the apex banks for the cooperative credit structure within their respective states. You can find the complete list of scheduled State Co-operative Banks in the RBI directory including the following scheduled state co-operative banks:

• Maharashtra State Co-operative Bank Ltd.
• Gujarat State Co-operative Bank Ltd.
• Kerala State Co-operative Bank Ltd.

Non-Scheduled State Co-operative Banks

These banks operate at the state level but are not included in the Second Schedule. They generally have smaller capital requirements and serve localized cooperative credit needs. RBI identifies 10 non-scheduled state co-operative banks including:

• Arunachal Pradesh State Co-operative Apex Bank Ltd.
• Mizoram Co-operative Apex Bank Ltd.
• Andaman and Nicobar State Co-operative Bank Ltd.

Services Offered by Cooperative Bank

• current account
• savings account
• agricultural finance
• microfinance
• cash reserve ratio
• forex services
•  government scheme distribution

List of Cooperative Banks in India

• The Cosmos Co-operative Bank Ltd.
• Abhyudaya Co-operative Bank Ltd.
• Bharat Cooperative Bank (Mumbai) Ltd.
• Bombay Mercantile Co-operative Bank Ltd.
• Citizen Credit Co-operative Bank Ltd.
• Janakalyan Sahakari Bank Ltd.
• The Kalupur Commercial Co-operative Bank Ltd.
• Saraswat Co-operative Bank Ltd.
• Punjab & Maharashtra Co-operative Bank Ltd.
• The Shamrao Vithal Co-operative Bank Ltd.
• Tumkur Veerashaiva Co-operative Bank Ltd.
• The Surat People's Co-operative Bank Ltd.
• Nagar Urban Co-operative Bank Ltd.
• Bharati Sahakari Bank Ltd.
• The Ahmedabad Mercantile Co-operative Bank Ltd.
• Rajkot Nagrik Sahakari Bank Ltd.
• Nutan Nagarik Sahakari Bank Ltd.
• Mehsana Urban Co-operative Bank Ltd.
• Sangli Urban Co-operative Bank Ltd.
• The Thane Janata Sahakari Bank Ltd.

Small Finance Banks

Small Finance Banks are a category of banks in India that primarily focus on providing financial services to unserved and underserved sections of the population, including small businesses, low-income individuals, and small farmers.

List of Small Finance Banks in India

• Shivalik Small Finance Bank
• Suryoday Small Finance Bank
• Shriram Finance Bank
• Unity Small Finance Bank
• AU Small Finance Bank
• Ujjivan Small Finance Bank
• Equitas Small Finance Bank
• ESAF Small Finance Bank
• Fincare Small Finance Bank
• Suryoday Small Finance Bank
• Jana Small Finance Bank
• Capital Small Finance Bank
• Slice Small Finance Bank
• Utkarsh Small Finance Bank
• Utkarsh CoreInvest Limited (formerly Utkarsh Micro Finance Limited)
• Jammu & Kashmir Small Finance Bank
• Utkarsh Small Finance Bank

Services Offered by Small Finance Banks 

• savings account
• small business loans
• microfinance
• agricultural finance
• remittance services

Payment Banks

Payment Banks are a specialized category of banks that focus on providing basic banking services, including payments and remittance services, to individuals and small businesses. However, they cannot engage in lending activities.

Services Offered by Payment Banks

• savings account
• electronic fund transfer
• mobile banking
• financial services

List of Payment Banks in India

• Airtel Payments Bank
• Paytm Payments Bank
• India Post Payments Bank
• Fino Payments Bank
• Jio Payments Bank
• NSDL Payments Bank
• Aditya Birla payments Bank

Rural Banks

RRBs were established to provide credit to the rural masses, especially small farmers and agricultural laborers. They are joint ventures between the Central Govt, State Govt, and Sponsor Banks.

Services Offered by Rural Banks

• Agricultural loans
• Microfinance
• Insurance
• Financial services
• Mobile banking

List of Rural Banks in India

• Baroda Gujarat Gramin Bank
• Uttar Bihar Gramin Bank
• Prathama Bank
• Assam Gramin Vikash Bank
• Kashi Gomti Samyut Gramin Bank
• Madhya Bihar Gramin Bank
• Saptagiri Grameena Bank
• Sarva Haryana Gramin Bank
• Malwa Gramin Bank
• Karnataka Vikas Grameena Bank

Specialized Banks

Specialized Banks are financial institutions that focus on providing specialized banking services to specific sectors or industries. They cater to the unique financial requirements of these sectors and play a significant role in their development.

Services Offered by Specialized Banks

• industrial finance
• export-import finance
• development finance
• housing finance
• infrastructure finance

List of Specialized Banks in India

• Industrial Development Bank of India (IDBI Bank)
• Export-Import Bank of India (EXIM Bank)
• Small Industries Development Bank of India (SIDBI)
• National Bank for Agriculture and Rural Development (NABARD)
• National Housing Bank (NHB)
• Bharatiya Mahila Bank (BMB)
• National Cooperative Development Corporation (NCDC)
• Export Credit Guarantee Corporation of India (ECGC)
• Small Industries Development Bank of India (SIDBI
• National Securities Depository Limited (NSDL)

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Local Area Banks

Local Area Banks (LABs) are small, geographically focused banks that cater to the banking needs of specific local areas, such as a district or a few contiguous districts. They aim to provide financial services to underserved areas and communities.

Services Offered by Local Area Banks

• current account
• loans
• microfinance
• customized banking service on the specific requirement of local communities

List of Local Area Banks in India

• Kerala Gramin Bank
• Karnataka Vikas Grameena Bank
• Andhra Pragathi Grameena Bank
• Madhya Bihar Gramin Bank
• Maharashtra Gramin Bank
• Punjab Gramin Bank
• Rajasthan Marudhara Gramin Bank
• Himachal Pradesh Gramin Bank
• Baroda Gujarat Gramin Bank
• Baroda Rajasthan Kshetriya Gramin Bank
• Uttar Bihar Gramin Bank
• Uttarakhand Gramin Bank
• Chaitanya Godavari Grameena Bank
• Paschim Banga Gramin Bank
• Assam Gramin Vikash Bank

Final Word

The banking sector in India is diverse and comprises various types of banks, each with its own unique characteristics, functions, and services. From central banks to commercial banks and specialized banks, they collectively contribute to the growth and development of India’s economy. Understanding the different types of banks in India helps individuals and businesses make informed decisions about their financial needs and aspirations.