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Banking is no new term to anyone be it homemakers, salaried people, businessmen, farmers, students or any other profession. Especially the Indian homes are well connected with banks and banking. The banking industry takes care of the finances of a country which includes credit and cash.
Banks are the backbone of the economy in a country and hence strict rules and regulations are imposed on the modus-operandi of banks. The major transactions that happen at banks are granting credits and accepting deposits from various entities.
RBI is the apex body that governs and monitors bank across India. It is responsible for regulating the monetary policy in the country.

BANK CLASSIFICATION IN INDIA
There are two broad categories under which banks are classified in India- SCHEDULED AND NON-SCHEDULED BANKS.
The scheduled banks include COMMERCIAL BANKS AND COOPERATIVE BANKS. The commercial banks include REGIONAL RURAL BANKS, SMALL FINANCE BANK, FOREIGN BANKS, PRIVATE SECTOR BANKS, and PUBLIC SECTOR BANKS. PAYMENTS BANK is a new introduction to the category.
Cooperative banks include URBAN AND RURAL BANKS.

Let us understand the nomenclature better;

SCHEDULED BANKS are the banks which are covered under the second schedule of the Reserve Bank of India Act, 1934. To qualify for being a scheduled bank, a minimum of 5 lakh paid-up capital is required on the bank’s behalf. The RBI lends loan to these banks at bank rate as and when required.
COMMERCIAL BANKS are regulated and managed under the Banking Regulation Act, 1949. These are profit making banks based on their business model. Granting loans to the government, general public, and corporate and accepting deposits counts as the primary function.

There are four types of commercial banks:

PUBLIC SECTOR BANKS
These banks for more than 75% of the total banking business in the nation. They are called nationalized banks. The government holds the majority stakes at these banks. Post-merger, SBI is the largest public sector banks by volume. It also ranks amongst the top 50 banks in the world.
There are 21 nationalized banks in India, they are:
1. STATE BANK OF INDIA
2. BANK OF INDIA
3. ALLAHABAD BANK
4. BANK OF MAHARASHTRA
5. CANARA BANK
6. INDIAN OVERSEAS BANK
7. IDBI BANK
8. ORIENTAL BANK OF COMMERCE
9. CENTRAL BANK OF INDIA
10. CORPORATION BANK
11. ANDHRA BANK
12. UCO BANK
13. BANK OF BARODA
14. UNION BANK OF INDIA
15. UNITED BANK OF INDIA
16. VIJAYA BANK
17. DENA BANK
18. INDIAN BANK
19. PUNJAB & SIND BANK
20. PUNJAB NATIONAL BANK
21. SYNDICATE BANK

PRIVATE SECTOR BANKS
Private shareholders hold majority stakes in private sector banks. Reserve Bank of India lays down all the rules and regulations. Following are the private sector banks in India:
1. HDFC BANK
2. ICICI BANK
3. AXIS BANK
4. YES BANK
5. INDUSIND BANK
6. KOTAK MAHINDRA BANK
7. DCB BANK
8. BANDHAN BANK
9. IDFC BANK
10. CITY UNION BANK
11. TAMILNAD MERCANTILE BANK
12. NAINITAL BANK
13. CATHOLIC SYRIAN BANK
14. FEDERAL BANK
15. JAMMU AND KASHMIR BANK
16. KARNATAKA BANK
17. DHANALAXMI BANK
18. SOUTH INDIAN BANK
19. LAKSHMI VILAS BANK
20. RBL BANK
21. KARUR VYSYA BANK

FOREIGN BANKS
A bank operating as a private entity in India but headquartered in a Foreign country is a foreign bank. They are governed by both the country they are located in as well the country they have headquarters in. Some of these are:
1. CITI BANK
2. STANDARD CHARTERED BANK
3. HSBC BANK

REGIONAL RURAL BANKS
These banks were established mainly to support the weaker and lesser fortunate section of the society like marginal farmers, laborers, small enterprises etc. they mainly operate at regional levels at different states and may have branches in urban areas as well. Their main features are:
1. Supporting rural and semi-urban region financially
2. Pension distribution and Wage disbursement of MGNREGA workers
3. Added banking facilities like locker, cards-debit, and credit

SMALL FINANCE BANKS
These banks cater to a niche segment in the society and help with financial inclusion of sections which are not taken care of by other leading banks. They look after micro industries, unorganized sector, small farmers etc. RBI and FEMA are the governing bodies of these banks.
These are:
1. AU SMALL FINANCE BANK
2. CAPITAL SMALL FINANCE BANK
3. FINCARE SMALL FINANCE BANK
4. EQUITAS SMALL FINANCE BANK
5. ESAF SMALL FINANCE BANK
6. SURYODAY SMALL FINANCE BANK
7. UJJIVAN SMALL FINANCE BANK
8. UTKARSH SMALL FINANCE BANK
9. NORTHEAST SMALL FINANCE BANK
10. JANA SMALL FINANCE BANK

COOPERATIVE BANKS
Run by the elected members of a managing committee and registered under the Cooperative Societies Act, 1912 are the cooperative banks. These are no-profit, no-loss banks and mainly serve entrepreneurs, industries, small businesses, and self-employment.

PAYMENTS BANK
This is a new and upcoming model of banking in India. It has been conceptualized and signed-off by RBI with restricted operations. Maximum of Rs. One Lakh is acceptable per customer by these banks. Like other banks, they also offer para-banking services like ATM cards, Debit- Credit cards, net-banking, mobile banking etc.