Banking in India

Reserve Bank of India is the central bank and the supreme monetary authority in India. The modern banking system was established in the 18^th century during the British rule in India. The present structure of the banking system is the result of many changes from the time of India’s Independence. Numerous reforms had been introduced in the banking sector after the establishment of Reserve Bank of India (RBI) in 1935 under the Reserve Bank of India Act, 1934. The apex bank acts as an autonomous body without much interference of the government. The Reserve Bank of India Act, 1934 which was later amended in 1936 was to build a strong and stable framework for the observation of the banking sector in India.  

 

The banking sector in India is broadly distributed into scheduled and non–scheduled banks. The banks which are included in the Second Schedule in the Reserve Bank of India Act 1934 are considered to be the schedule banks. These are further classified into commercial and co-operative banks. All the nationalised banks, State Bank of India and its associates, the foreign banks, Regional Rural Banks and other private sector banks in India all come under the commercial bank category. Commercial banks can be scheduled and non–scheduled banks.

 

The banking sector has been fairly distributed in different parts of the country. Presently, major parts of the population have the privilege to use the banking facilities at various places in India due to the introduction and promulgation of technology. On other hand it is still a challenge to offer these facilities in the extreme rural and to the poor section of the society.

 

The Indian money market is hugely dependent on the banking sector apart from other non-government financial organisations and private money lenders. One can avail different types of loans under various schemes for personal use or for business purpose. Loan against property and unsecured business loans are useful for those willing to develop an existing one or start a new business. Personal loans are also available with low interest rates and policies. Home loan in Delhi, the capital city or other cities in India are provided by the banks to the consumers to fulfil their desire to build a house of their own. Loan for buying car or other vehicles are quite common nowadays. Educational loans for students willing to apply for higher studies are also available in these banks.