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Different Types Of Banks

Types of Banking

Banking is simply defined as the business activity of accepting and keeping safe money owned by other individuals and entities, and/or then lending out this money in order to earn a profit.

You can choose the best bank according to your preference and for what purpose.

Some of the banking services we have available are:

1. Commercial Banks

Commercial banks are banks which accept deposits and provide loans with interest. This bank mainly provides capital to start a business or maintain and keep the business going.

Also check: Types of Loan Offered by Commercial Bank

2. Central Bank

It regulates the monetary and credit system of the country. The Central bank serves as the regulator of all banking system in a country.

3. Industrial Banks

These type of bank gives capital for industrialists to make the business grow, it is giving capital for industrial organizations, entities to have enough capital to buy the machines needed to operate the business.

4. Agricultural Banks

These type of banks are helping the farmers in the countryside. It provides loans especially to farmers to promote agricultural needs.

5. Savings Bank

It serves as a keep-safer of the money in the long term for individual needs.

6. Foreign Exchange

These banks mainly give services for foreign currency exchanges and provide credit for the purpose of foreign trading and other businesses.

7. Private Banks

This is mainly serving the services of its own business. They also provide loans but with a high interest compared to other banks.

Commercial Banks also accepts deposits:

  • Savings Deposits
  • Current Deposits
  • Fixed Deposits
  • Seasonal Deposits
  • Recurring Deposits

Commercial Banks also provides different types of loans as follows:

  • Cash Credits
  • Overdrafts
  • Loans
  • Discounting Bills

All banks are classified on the according to its purpose and its functions.

These services enumerated are now mainly catered by Commercial Banks, providing services of agricultural banks.

They are providing loans for industries as industrial banks, they are even expanding services for foreign exchange, trading, import and export services.

Eventually, this will replace foreign exchange banks.

Therefore the commercial banks are the most progressive banks which dominate all other banks when it comes to services, especially on giving a wider array of long term loans and other services.

This is the reason why it gains a very large number of customers in the populace.

Conclusion

I have mentioned 7 types of banks that you should know if you want to be successful in banking.

You’ll see through the post that, the role of each bank is different.

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