Banking System in India – A Quick Overview

Banking System of India is not something new and the roots of the basic banking system can actually be traced back to 18th century. The first Indian bank was known to have established in 1779 and the name of the Bank was Bank of Hindustan. Since then the banking sector has come a long way. Today, Reserve Bank of India is the central and the supreme monetary authority in India. RBI also works as a regulator for all other banks. Here is more information about the banking sector in India Types of Bank In terms of classification, the banks can be classified into two different types of banks. The first classification here is the Commercial Banks and the second one is Co-operative banks. If you are wondering that where are all the public sector and private sector banks placed in India then you must know that these banks fall under Commercial Banks? These can also be some of the foreign entities. The Public sector banks are again divided into two different categories and one of them is the State Bank of India and it's associate Banks while the other category is called as Other Nationalized Banks. However, you must know that until liberalization, there were only public sector banks in India. Today, State Bank of India holds the title of the largest as well as the oldest public sector bank in India. Present Day Banking in India Today, everyone wants to save time while banking and to enables this feature, the banks have started offering self-service via online banking. This has really made it easy for the Indians to bank easily and at the same time, they have more of control over their accounts. In recent time, a new category of banks has evolved which is often addressed as Digital Banks. Today, most of the people have an access to the bank because of the financial inclusion schemes like Jan Dhan Yojana and the people are able to avail various facilities from one single bank. At present, another big problem being dealt by the bank includes the bad-loans and the Reserve Bank of India has taken a tough stand on wilful defaulters. The government also helps the banks by recapitalizing them once in a while which certainly helps the bank in cleaning the balance sheets. Future of Banking System in India The banking system in India seems to have a bright future, however, there is certainly a need of some of the corrective actions which would help the banks in dealing with the issue of NPA. Apart from this, the banking sector in India is expected to grow at a high growth rate and with advancement in technology, we can also expect that the banks would roll-out many new features for the public in coming future. Today, with all the advancement, it is possible to deposit cash in the bank without a teller. Such innovations are certain in future and the way we bank would certainly change.