Different types of Banking Bank - A financial institution licensed as a receiver of deposits.

There are two types of banks: commercial/retail banks and investment banks. In most countries, banks are regulated by the national government or central bank. Commercial banks are mainly concerned with managing withdrawals and deposits as well as supplying short-term loans to individuals and small businesses. Consumers primarily use these banks for basic checking and savings accounts, certificates of deposit and sometimes for home mortgages. Investment banks focus on providing services such as underwriting and corporate reorganization to institutional clients. While many banks have a brick-and-mortar and online presence, some banks have only an online presence. Online-only banks often offer consumers higher interest rates and lower fees. Convenience, interest rates and fees are the driving factors in consumers' decisions of which bank to do business with. As an alternative to banks, consumers can opt to use a credit union. Banking company is defined as a company which transacts the business of banking in India as per the banking Act 1949. Banking is defined as 'accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise, and withdraw able, by cheque, draft, and order or otherwise. 'Banks are defined as the financial institution or intermediary which helps in performing the banking activities. The different types if banking that takes place all over the world are: 1. Retail banking Typical mass-market banking in which individual customers use local branches of larger commercial banks. Services offered include savings and checking accounts, mortgages, personal loans, debit/credit cards and certificates of deposit (CDs). services as possible on behalf of retail clients. Some retail banks have even made a push into investment services such as wealth management, brokerage accounts, private banking and retirement planning. While some of these ancillary services are outsourced to third parties (often for regulatory reasons), they often intertwine with core retail banking accounts like checking and savings to allow for easier transfers and maintenance. The products that are offered by the retail banks are: Current accounts Savings accounts Debit cards ATM cards Credit cards Cheque Mortgages Home equity loans

Personal loans Time deposits/Term deposits Recurring deposits

The different types of retail banks are as follows: Private Banks which deals with assets of high net worth individuals provides wealth management and portfolio management services to them. Offshore banks which are located in jurisdictions with low taxation and regulation Savings banks accept savings deposits. Postal savings banks are savings banks associated with national postal systems Community development banks are the banks that provide financial services and credit to under-served markets or populations. 2. Wholesale banking Banking services between merchant banks and other financial institutions. Wholesale banking deals with larger institutions, where as retail banking would focus more on the individual or smaller business. Some services might include currency conversion, working capital financing and large trade transactions. This type of banking will provide services to other banks or large corporations. Some retail banking covers business transactions but not in the same scale as wholesale banking. think of it like the discount superstore that deals in such large amounts that they can offer special prices or reduced fees, on a per dollar basis. The products that are offered in whole sale banking are: Trade Finance products Cash Management Products Treasury Products Bridge Loans Syndicated Loans Infrastructure Loans Cross Currency/Interest Rate Swaps Foreign Currency Loans and many more depending upon the needs of the Corporates.

3. Investment banking A specific division of banking related to the creation of capital for other companies. Investment banks underwrite new debt and equity securities for all types of corporations. Investment banks also provide guidance to issuers regarding the issue and placement of stock. Investment banks also aid in the sale of securities in some instances. They also help to facilitate mergers and acquisitions, reorganizations and broker trades for both institutions and private investors. They can also trade securities for their own accounts. 4. Merchant banking A bank that deals mostly in (but is not limited to) international finance, long-term loans for companies and underwriting. Merchant banks do not provide regular banking services to the general public. Their knowledge in international finances make merchant banks specialists in dealing with multinational corporations. The main difference between investment banking and merchant banking is that it does not deal with trading. 5. Universal banking A banking system in which banks provide a wide variety of financial services, including both commercial and investment services. Universal banking is common in some European countries, including Switzerland. In the United States, however, banks are required to separate their commercial and investment banking services. Proponents of universal banking argue that it helps banks better diversify risk. Detractors think dividing up banks' operations is a less risky strategy. Universal banks may offer credit, loans, deposits, asset management, investment advisory, payment processing, securities transactions, underwriting and financial analysis. While a universal banking system allows banks to offer a multitude of services, it does not require them to do so. Banks in a universal system may still choose to specialize in a subset of banking services. 6. Central banking The entity responsible for overseeing the monetary system for a nation (or group of nations). Central banks have a wide range of responsibilities, from overseeing monetary policy to implementing specific goals such as currency stability, low inflation and full employment. Central banks also generally issue currency, function as the bank of the government, regulate the credit system, oversee commercial banks, manage exchange reserves and act as a lender of last resort. The central banking system in the U.S. is known as the Federal Reserve System (commonly known as "the Fed"), which is composed of 12 regional Federal Reserve Banks located in major cities throughout the country. The main tasks of the Federal Reserve are to supervise and regulate banks, implement monetary policy by buying and selling U.S. Treasury bonds and steer interest rates. Ben Bernanke currently serves as the chairman of the Board of Governors of the Federal Reserve. 7. Cooperative societies

Member-owned financial co-operative. These institutions are created and operated by its members and profits are shared amongst the owners. As soon as you deposit funds into a credit union account, you become a partial owner and participate in the union's profitability. Credit unions are formed by large corporations and organizations for their employees and members. 8. Islamic banking A banking system that is based on the principles of Islamic law (also known Shariah) and guided by Islamic economics. Two basic principles behind Islamic banking are the sharing of profit and loss and, significantly, the prohibition of the collection and payment of interest. Collecting interest is not permitted under Islamic law. Since this system of banking is grounded in Islamic principles, all the undertakings of the banks follow Islamic morals. Therefore, it could be said that financial transactions within Islamic banking are a culturally distinct form of ethical investing (for example, investments involving alcohol, gambling, pork, etc. are prohibited). The Dubai Islamic Bank has the distinction of being the world's first full-fledged Islamic bank, formed in 1975. 9. Internet banking The performance of banking activities via the Internet. Online banking is also known as "Internet banking" or "Web banking." A good online bank will offer customers just about every service traditionally available through a local branch, including accepting deposits (which is done online or through the mail), paying interest on savings and providing an online bill payment system. Online banks cannot provide direct ATM access, but they make provisions for consumers to use ATMs at other banks and retail stores, and they may reimburse consumers for any associated fees. Because of the reduced overhead costs associated with not having physical branches, online banks tend to offer consumers significant savings and pay higher interest rates. Online banks handle customer service tasks by phone, email or online chat. 10. Mobile banking The use of wireless handheld devices such as cellular phones and laptops to conduct commercial transactions online. Mobile commerce transactions continues to grow, and the term includes the purchase and sale of a wide range of goods and services, online banking, bill payment, information delivery and so on. Also known as m-commerce. The services that are extended through mobile banking are: Checking the statements Status on cheque Pin provision of ATM cards and credit cards Technical assistance through call centers Blockage of accounts

11. International banking A facility that allows depository institutions in the United States to offer deposit and loan services to foreign residents and institutions, while being exempted from reserve requirements imposed by the Federal Reserve and some state and local income taxes. Because of these exemptions, IBFs enable U.S. banks and U.S.-based financial institutions to compete more effectively for overseas deposits and loans business in the Eurocurrency markets. 12. Specialized banking Specialized banks are foreign exchange banks, industrial banks, development banks, exportimport banks catering to specific needs of these unique activities. These banks provide financial aid to industries, heavy projects and foreign trade activities.

INDIAN BANKING INDUSTRY 1. Scheduled banks 1.1 scheduled commerce banks 1.1.1 SBI & Associates Public sector banks 1.1.2 Nationalised banks (including IDBI) Public sector banks 1.1.3 Foreign banks 1.1.4 Regional rural banks 1.1.5 Other scheduled commerce banks 1.2 scheduled cooperative banks 1.2.1 Rural cooperative banks 1.2.1.1 short term (state, district and primary level cooperative banks) 1.2.1.2 long term (SCARDBs & PCARDBs) 1.2.2 Urban cooperative banks 1.2.2.1 Signal 1.2.2.2 Multi-state 2. Unscheduled banks