TYPES OF BANKS

            In last post we now about banking and list of different types of banks we have.All these banks are divided into different types according to their activities. now we can discuss the types of banks and their activities.

  1. Central Bank.
  • Central Bank and it was also called as Reserve Bank.
  • Monetary Authority this Bank managers States currency money supplies and interest rates.
  • A Central bank is normally government owned and charged with regulatory responsibilities.
  • Controlling the cash and supervising the commercial banks.
  1. Commercial Banks.
  • A commercial bank is a type of bank that provides services such as accepting deposits and granting business loans and offering basic investment products.
  • Commercial bank mostly deals with deposits and loans from corporation’s large businesses as opposite to the individual members of the public.
  1. Retail Banks.
  • Retail Banks are doing transactions directly with consumers rather than corporations or other banks.
  • This Bank services offered saving and transactional accounts mortgages, personal loans, debit cards and credit cards.
  • Banking the term is generally used to distinguish these banking services from investment banking commercial banking or wholesale banking.
  1. Industrial Banks.
  • Industrial banks will provide a long-term loan to the industries.
  • And it doesn’t accept short-term deposits from the public.
  • And it also gives advice to big industrial firms regarding sale and purchase of shares and debentures.
  1. Agricultural Banks.
  • Agricultural banks are the banks which advance loans to the farmers.
  • It gives short-term loans to buy seeds, fertilizers, plows, and other agricultural inputs.
  • This bank also gives long-term loans to farmers to purchase land, and larger equipment and for irrigation purpose.
  1. International bank or Foreign Exchange banks or Global banks.
  • These banks are making international payments through the sale purchase of exchange bills.
  • There are specialized in financing foreign trade.
  • These banks are also converting the currency for exporters.
  1. Investment banks or Merchant Banks.
  • These banks assist individuals, corporations, and governments in raising capital by underwriting or acting as the client’s agent in an issuance of securities or both.
  • Also, assist companies involved in mergers and acquisitions and provide ancillary services such as market making, trading of derivatives and equity securities, income instruments, currencies, and commodities.
  • It does not accept deposits like commercial and retail banks.
  1. Custodian Banks.
  • Custodian bank is specialized financial institution responsible for safeguarding a firm’s or individual’s financial assets and is not necessarily engaged in commercial or consumer/ retail banking such as mortgage, or personal lending, branch banking, personal accounts and ATM.
  1. Cooperative Banks.
  • These banks retail and commercial banks organized on a cooperative basis.
  • These banks include retail banking carried out by credit unions, mutual savings banks, building societies and cooperative, as well as commercial banking services to cooperative banks.
  1. Private Banks.
  • These are also called as wealth Management Banks.
  • These banks are incorporate financial planning, investment portfolio management, and other financial services to high-net-worth individuals.
  • It was small business owners and families to coordinate their retail banking, estate planning, legal resources, tax professionals and investment management.

             All these are the types of banks. And next topic was posted soon so please keep touch with us on Awareness Adda to get more information.