Brief notes on Banks and its Types Commercial & Co-operative

Hi folk banking awareness is one of the most important subject in bank exams so having proper knowledge in this field is mandatory. From today onwards we are providing Banking information in daily basis that will be very much useful for upcoming exams like IBPS PO & Clerk, SBI Associates PO etc.

What is a Bank?
A Bank is a financial institute that was authorized by the Government to accept or receive deposits from its customers and provide financial services along with interest pay, clearing checks, giving loans, financial transactions etc.

Types of banks:
Banks in the country are divided mainly into two groups
  1. Commercial banks
  2. Co-operative banks

Commercial Banks:
Commercial banks are controlled by only RBI.
The following banks comes under commercial banks category.
  • SBI and its 5 Associate banks (SBH, SBM, SBT, SBP, SBBJ).
  • All Private Banks in the country.
  • PSB under which 19 nationalized banks, SBI group, IDBI are coming
  • All Foreign Banks in our country (Around 41 are there) Standard & Chartered bank of UK is the biggest foreign bank in India.
  • All RRB’s started by peak commercial banks by SBI, Andhra, Canara bank etc.
Commercial bank can do lot of business, take more & more people for requirement in a new branches.
Commercial banks are taking very high risk for high profit. The risks of bank are mainly
  1. Credit risk (which means any borrower may not repay the money taken from a bank).
  2. Market risk.
  3. Operational risk.
Commercial banks are getting more profits as they are taking more risk.

Co-operative Banks:
Co-operative banks are controlled by RBI and also state government because all Co-operative banks will come under State Government Cooperative bank act.
Co-operative banks include
  • Urban Cooperative banks.
  • District cooperative banks.
  • Cooperative land development banks etc.
Co-operative banks are very small banks with less business, less profit, less no of employees and less number of branches.
Co-operative banks cannot take up all types of business like commercial banks and they are working at low risk for low profit.

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