Q.Describe the different types of commercial banks in India.

Commercial banks can be classified by ownership, by their inclusion in the central banking law's schedule, and by their area and purpose of operation. …

Commercial banks in India are classified on three bases.

(A) By ownership

• Public sector banks — majority government-owned; the largest part of the system, combining profit with a strong social-banking mandate and a wide branch network.
• Private sector banks — owned and managed by private individuals and companies, run primarily for profit but bound by the central bank's regulations.
• Foreign banks — incorporated abroad but operating branches in India; they specialise in financing foreign trade and serving large corporate customers.

(B) By schedule under the central banking law

• Scheduled banks — included in the second schedule of the Reserve Bank of India Act because they meet the minimum capital and reserve conditions; they may borrow from the central bank but must keep required reserves with it.
• Non-scheduled banks — not included in that schedule and not entitled to the same privileges; relatively few and small.

(C) By area and purpose

• Regional rural banks — serve mainly the rural population — small and marginal farmers, labourers and rural artisans — within a defined region. …

Students sometimes treat the three bases as if they were mutually exclusive lists of different banks; in fact the same bank can appear under more than one basis (e.g. a public sector bank that is also a sch …