1. TYPES OF BANKS IN INDIA
- Regional Rural Banks (RRBs): Established under RRB Act 1976, jointly owned by GoI, State Governments, and Sponsor Banks. Focus on agricultural and rural credit.
- Small Finance Banks (SFBs): Created for financial inclusion, serving small businesses, marginal farmers, and underserved sections.
- Payment Banks: Licensed under Banking Regulation Act 1949; restricted to demand deposits and payment/remittance services.
- NBFCs: Non-Banking Financial Companies registered under Companies Act 2013, regulated by RBI; engaged in loans, advances, and securities.
2. BANKING PRODUCTS & SERVICES
- Deposit Accounts: Savings Bank, Current Account, Fixed Deposit (higher interest for longer tenure), Recurring Deposit (fixed amount at regular intervals).
- Loans: Education Loans, Vehicle Loans, Home Loans, MSME Loans, Corporate Loans, Agriculture Loans.
- Other Services: Safe Deposit Lockers.
3. FDI IN BANKING
- Private Sector Banks: FDI up to 49% via automatic route; up to 74% via government approval.
- Public Sector Banks: FDI up to 20% via government approval route only.
4. EASE REFORMS (Public Sector Banks)
Enhanced Access & Service Excellence (EASE) reforms have been implemented since 2018 (now at EASE 7.0), focusing on:
- Governance & prudential lending
- Technology & data-driven banking
- Increasing MSME & retail access
- Near-home banking and mobile ATMs in underserved areas
- Time-bound refund on unauthorised electronic transactions
Result: Gross NPAs of banks reduced from ₹10.36 lakh crore (2018) to ₹4.75 lakh crore (2024).
5. FINANCIAL INCLUSION - JAM TRINITY
Jan-Dhan + Aadhaar + Mobile (JAM) has significantly advanced financial inclusion by bringing millions of unbanked individuals into the formal banking system.
6. BASEL III
Basel III reforms strengthen individual bank resilience during stress periods and address system-wide risks through capital buffers (Capital Conservation Buffer & Countercyclical Buffer), protecting the banking sector during excess credit growth.
Best regards,
Written By Megha Singh
