Banking : Different types of Institutions

 

Types of Banking and Financial Institutions :

Retail Banking : Retail banking is the achievement  of administrations by a bank to the individuals rather than to the organizations, corporate or the other banks.The  Administrations offers the services like Savings, Money transfers, Loans, Cheques, Cards etc. The term Retail banking mostly recognize as the financial institutions for managing an account administrations for individuals or managing the retail clients which differs it from the other banking types.

Commercial Banking : Commercial banking provide the administrations services such as making business advances, offering fundamental investment schemes, encouraging saving deposits, fixed deposits, issuing bank drafts and bank  cheques, giving the overdraft facilities, investment schemes of bond, cash management, loans mortgages, debit and credit cards.

There are basically two types of commercial banks: Public Commercial Banks and Private Commercial Banks. Public Commercial Banks are generally those banks in which Government holds the major stake usually to emphasis on the social objectives than on profitability. Whereas Private Commercial Banks are  fully owned, managed and controlled by the Private supporters and they are free to operate without any government interference.

Private Banking : The term Private refers to the administration services more on personal basis rather than the mass population (Retail Banking). Private Banks refer as financial institutions for managing accounts, investments and other services offered by the banks to high net worth individuals (HNI) who are categories as high income professionals or large investors. Private Banks subjects to an essential part of wealth management for high income groups. They provide services like : Assets Management, Tax Advisory, Financial Brokers, Offered Solitary relationship manager.

Investment Banking : An Investment Bank refers as a consultant or assisting institution for Individuals, Organizations and Governments in raising the capital by underwriting assets. An Investment Bank likewise assist the Organizations in simplifying the acquisitions and mergers, trading in derivatives, equities, currencies, commodities by providing an auxiliary services. An Investment Bank does not provide the deposit  services like Commercial Banks or Retail Banks.

Specialized Banks : Specialized Banks offers various specialized services away from the traditional banking. Generally, Specialized banks are the financial Institutions also referred as the Foreign Exchange Banks, the Development Banks, the Industry and Mine Banks, the Farms and Agriculture Banks, the Aboriginal Banks (providing financial products and services to the Aboriginal Communities) and Export-Import Banks with unique needs.

Some Specialized Banks are governed and regulated by the State or Central Governments or both for re-structuring, planning and development of the Country. The Specialized Banks are broadly categoried into three types, they are as follows:

 Export Import Banks (EXIM Banks)

  Small Industries Development Banks

·                                                                                           Agricultural and Rural Development Banks.

      Central Banks : A Reserve Bank, Central Bank or Monetary Authority refers to a financial Institution which manages a States or a Country in terms of currency, interest rates and currency valuation. Central bank holds monopoly in increasing monetary base also by printing the National Currency. Central Bank functions mostly include managing the foreign exchange and gold reserves, Implementing Monetary policy, acting as a banker’s bank at time of crisis, making official policies regarding Interest rates. Central bank holds the superior power to protect the country man by punishing banks or institution for performing any reckless or fraudulent behavior. Central Banks are mostly designed and recognized as an independent and politically free entity. For example : Reserve Bank of India (RBI).