Reserve Bank of India

The Reserve Bank of India as the central bank of the country, is at the head of this group. Commercial banks themselves may be divided into two groups, the scheduled and the non scheduled. The commercial banking system may be distinguished into:
A. Public Sector Banks B. Private Sector Banks

A. Public Sector Banks

i) State Bank of India ii) Associate Bank iii) 14 Nationalized Banks (1969) iv) 6 Nationalized Banks (1980) v) Regional Rural Banks B. Private Sector Banks Other Private Banks; ii) New sophisticated Private Banks; iii) Cooperative Banks included in the second schedule; iv) Foreign banks in India, representative offices, and v) One non-scheduled banks

RBI
The Reserve Bank of India (RBI) is the apex financial institution of the countrys financial system entrusted with the task of control, supervision, promotion, development and planning. RBI is the queen bee of the Indian financial system which influences the commercial banks' management in more than one way. RBI performs the four basic functions of management, viz., planning, organising, directing and controlling in laying a strong foundation for the functioning of commercial bank

Functions
Issuing currency notes, to act as a currency authority. Banker, Agent and Financial Advisor to the State Banker to the Banks Custodian of Foreign Exchange Reserves Lender of the Last Resort Banks of Central Clearance, Settlement and Transfer Controller of Credit Supervisory Functions

Commercial Banks
In India there are 88 commercial banks which account for about 82 %of the total assets of the financial sector, over 2000 cooperative banks accounting for about 5% and 133 regional Rural Banks, which account for about 3% of the total assets of the financial sector. Commercial banks are business enterprises which deal in finances, financial instruments and provide various financial services for a price known as interest, discount, commission, fee etc.

 According to the Banking Regulation Act, 1949, Banking means, accepting, deposit of money from the public, for the purpose of lending or investment. These deposits may be repayable on demand or otherwise and may be withdrawn by cheque, draft, order or otherwise. Accepting deposits and lending these resources to business houses and individuals are the main function of commercial banks. Commercial banks also involve into various financial services.

Functions of commercial banks

Accepting deposits Loans and advances Agency functions Dealings in foreign exchange Credit creation Popularising cheque system Transfer of funds Other functions Function under innovative banking Insurance business

Role Of Development Banking

Promote and Develop small scale industries Finance the development of housing sector Development of large scale industries Help in agricultural and rural development Enhance the foreign trade of india Helps to review sick industrial units Encourage the development of indian enterpreneurs Assist in the growth of capital markets