Which of the following is not a type of bank?
The bank is a significant factor in our life. But sometimes we can’t understand which of the following is not type of bank? If we look at the types of banks, there are different types of banks such as commercial banks, commercial banks, and regional banks. A commercial bank is known for accepting deposits and lending to individual entrepreneurs.
The central bank i.e. RBI is known for the functions of currency creation, creation of credit money, and control of money. Cooperative banks offer various types of loan schemes as well as attractive deposits.
Investment banks provide advice on various types of investments such as underwriting or trading of securities. But sometimes the question arises as to who should be called a bank.
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Following are not a type of bank?
A bank is a financial institution that performs the primary function of accepting deposits from people or institutions and making loans. And she would have obtained a license from RBI for this work.
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Small Finance Bank
Then a finance bank is a type of banking institution. Small finance banks are generally found in rural areas or areas with less financial services. This organization works to provide financial services to small businesses or individuals.
Small Finance Banks have a very small scale of business and they also offer loans at low interest rates. Usually, these institutions do not ask for many documents while giving loans. Sometimes these institutions also provide loans to people with bad credit.
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Credit union –
A credit union is a consumer-owned organization which means credit unions are member-operated and provide deposit accounts or other financial facilities but do not have bank status. They are not set up to make a profit. Credit unions generally offer higher interest rates than banks on deposits but are not considered safer.
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Lender –
In many places, people go to nearby moneylenders or reputable persons to borrow some money to meet their short-term money needs. Lenders only cater to short-term needs of money but can charge interest rates on the given money.
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Insurance Company-
An insurance company cannot be said to be a bank. Both insurance companies and banks are financial institutions. But if you go to see them, there is a lot of difference. Banks and insurance companies have different business modules and risks. Also, the assets and liabilities of banks and insurance companies are of different types. Insurance is taken out on the occurrence of an event i here only if the event happens the insurance money meets the insured but not in the bank Banks are useful for saving or lending or using other banks.
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Venture capital –
The primary function of venture capital is very different. Venture capitalists invest their own money in a small company and help that organization or company grow. To earn money, venture capital sells shares of such companies and earns profits.
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Currency exchange firms –
Currency exchange firms are not banks. These institutions provide some financial services which are sometimes not available in banks. But nowadays these institutions are facing competition from banks.
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Micro loan organization-
Like banks, micro organizations provide credit, but these organizations have small amounts of loans, so they are called micro two organizations. Often, when small businesses need financial support, they meet their financial needs from micro organizations.
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Types of Banks
Banks are very important in the economy. To keep money circulating in the economy or to meet the need for money, banks play a very vital role. Let’s see different types of banks.
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Central Bank –
Central Bank was established in the year 1934. Reserve Bank of India is the central bank of India. The main function of RBI Bank is to create currency along with controlling all banks, guiding other banks, implementing economic policy, and controlling credit and money. Every country has a single central bank which controls all the banks and performs the important function of running the economy smoothly.
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Co-operative Banks –
Co-operative banks work on the principle of cooperation. Co-operative banks are registered under the Co-operative Societies Act 1912 and the bank carries out its functions with the help of a managing committee.
The purpose of this bank is mainly to finance agricultural enterprises in rural areas or to provide assistance to traders in local areas. Co-operative banks are of two types namely State Co-operative Bank and Urban Co-operative Bank. These banks are owned by their members. The customers of co-operative banks are mainly traders or individuals in the local area.
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Commercial Banks –
Commercial banks are established under the Banking Companies Act, of 1956. The main objective of these banks is to make a profit. While commercial banks provide various services to customers, various functions.
Such as providing safe deposit lockers, money transfers, credit cards, ATM cards, or customer bill payments are performed by commercial banks. The main types of commercial banks are Public Sector Banks, Private Sector Banks, Foreign Banks, and Regional Banks.
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Regional Rural Bank
RRB was established in 1975 and these banks are registered under the Regional Rural Bank Act 1996. The shares of this bank are tied up with 50 percent central government, 15 percent of the state government, and 35 percent of commercial banks. It looks like this. A Regional Rural Bank is a type of commercial bank.
Functioning of Banks
What is said is that banks are using different types of technology and according to this step, banks are becoming more proficient in the services they provide. Following are the services offered by us against banks.
- Accepting Deposits – Business banks accept deposits from Indian institutions and other individuals and offer attractive interest rates.
- Lending – Banks are seen as offering various types of loans to people like Home Loans Car Loans FD Loans Gold Loans Mortgage Loans Personal Loans etc.
- Payments and Settlements – Banks can now send money in one place in a very fast manner, services include RTGS online transfer, check net transfer, debit or credit card transfer, or electronic transfer.
- Currency Exchange – Today many banks are providing foreign exchange services which include buying and selling or foreign currency exchange.
- Lockers facilities – People keep their valuables in the lockers available in the bank to prevent them from getting lost or stolen or other documents or other important documents can be kept in a quick place. Banks provide the facility of lockers at a very low rate.
- Investment Facilitation – Bank offers various investment options to its customers including Mutual Funds Fixed Deposits Repairing Deposits
- Internet banking – These days many people sit while using the Internet banking facility. Internet banking has made people’s lives very easy and convenient. Banks do not need to be open to use the Internet banking facility. The account holder can use the internet banking service on his account anytime within 24 hours.