Podcast
Questions and Answers
What is the percentage of Priority Sector Lending (PSL) for Small Finance Banks and Regional Rural Banks?
What is the percentage of Priority Sector Lending (PSL) for Small Finance Banks and Regional Rural Banks?
When was the concept of Local Area Bank introduced?
When was the concept of Local Area Bank introduced?
What is the restriction on the location of branches of Local Area Banks?
What is the restriction on the location of branches of Local Area Banks?
What is the sponsoring bank for Uttar Bihar Gramin Bank?
What is the sponsoring bank for Uttar Bihar Gramin Bank?
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What is the regulation governing the interest rates of Regional Rural Banks?
What is the regulation governing the interest rates of Regional Rural Banks?
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What is the status of Local Area Banks?
What is the status of Local Area Banks?
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What is the chronological order of the development of banks?
What is the chronological order of the development of banks?
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Which type of bank is not allowed to give loans?
Which type of bank is not allowed to give loans?
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What is the purpose of the Post Shoppe outlet in big post offices?
What is the purpose of the Post Shoppe outlet in big post offices?
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How can overseas Indians pay RTI fees online?
How can overseas Indians pay RTI fees online?
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What is the Deen Dayal SPARSH Yojana for?
What is the Deen Dayal SPARSH Yojana for?
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Where is the Officers' training conducted?
Where is the Officers' training conducted?
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What is the foundation of Post Office Savings Bank?
What is the foundation of Post Office Savings Bank?
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Can India Post Payments Bank accept time deposits?
Can India Post Payments Bank accept time deposits?
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Can a customer keep more than ₹2 lakh balance in an India Post Payments Bank account?
Can a customer keep more than ₹2 lakh balance in an India Post Payments Bank account?
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Which of the following services is not directly available in India Post Payments Bank?
Which of the following services is not directly available in India Post Payments Bank?
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What is the minimum capital required to establish a Small Finance Bank?
What is the minimum capital required to establish a Small Finance Bank?
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What is the experience required in banking/finance for a Small Finance Bank?
What is the experience required in banking/finance for a Small Finance Bank?
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Which of the following is not eligible to establish a Payment Bank?
Which of the following is not eligible to establish a Payment Bank?
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What is the number of Payment Banks selected initially?
What is the number of Payment Banks selected initially?
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What is the CRR, SLR, Repo, and FDI requirement for Payment Banks?
What is the CRR, SLR, Repo, and FDI requirement for Payment Banks?
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Which region was given preference by the RBI Committee for licensing of Small Finance Banks?
Which region was given preference by the RBI Committee for licensing of Small Finance Banks?
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What is the operational area for Payment Banks?
What is the operational area for Payment Banks?
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What is the total number of Small Finance Banks listed on RBI's website?
What is the total number of Small Finance Banks listed on RBI's website?
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What type of loan is provided by Infrastructure Finance Company (IFC)?
What type of loan is provided by Infrastructure Finance Company (IFC)?
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What is the main function of Asset Reconstruction Companies (ARC)?
What is the main function of Asset Reconstruction Companies (ARC)?
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What is the main purpose of Factoring Companies?
What is the main purpose of Factoring Companies?
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What is the role of RBI in Gold Loan Companies?
What is the role of RBI in Gold Loan Companies?
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What type of company is IL&FS?
What type of company is IL&FS?
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What is the main function of Housing Finance Companies?
What is the main function of Housing Finance Companies?
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What is the primary function of a Development Finance Institution (DFI)?
What is the primary function of a Development Finance Institution (DFI)?
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Which committee recommended the classification of financial intermediaries into only two categories: Bank or non-bank?
Which committee recommended the classification of financial intermediaries into only two categories: Bank or non-bank?
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What was the outcome of the IDBI Act in 2004?
What was the outcome of the IDBI Act in 2004?
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Which of the following institutions was setup by the Government of India, World Bank, etc.?
Which of the following institutions was setup by the Government of India, World Bank, etc.?
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What is the primary function of UCB-banks?
What is the primary function of UCB-banks?
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Which of the following institutions is owned by the Ministry of Micro, Small and Medium Enterprises (MSME)?
Which of the following institutions is owned by the Ministry of Micro, Small and Medium Enterprises (MSME)?
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What happened to IDBI in 2018?
What happened to IDBI in 2018?
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What is the primary function of the organization mentioned in the disclaimer?
What is the primary function of the organization mentioned in the disclaimer?
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Study Notes
Differential Banks
- Regional Rural Banks (RRBs) were established in 1976 under the RRB Act, based on the recommendations of M.Narasimham's Committee on Financial Inclusion.
- RRBs are subject to CRR and SLR norms, but RBI can prescribe separate norms.
- Loan interest rates of RRBs cannot be more than the prevailing lending rates of Cooperative Banks in the area.
- RRBs are restricted to a few districts, e.g., Uttar Bihar Gramin Bank (Sponsor bank - Central Bank of India).
Local Area Banks
- Local Area Banks were established in 1996 based on the Budget announcement by Finance Minister Manmohan Singh.
- They are not set up by the Union or State governments or by any special Act or Parliament, but by private entities applying to RBI under the Banking Regulation Act.
- They can open branches in a maximum of three districts, with one urban center per district.
- The remaining branches need to be opened in rural areas of that district.
Small Finance Banks
- Small Finance Banks were established in 2015, with a minimum capital requirement of ₹100 crore.
- Examples include Capital Small Finance Bank (Punjab), Ujjivan (Karnataka), and Utkarsh (UP).
- They can open branches anywhere, with a preference for North East and Central India clusters where Universal Banks' penetration is poor.
Payment Banks
- Payment Banks were established in 2015, with a minimum capital requirement of ₹100 crore.
- Examples include Airtel, India Post, FINO, Paytm, Jio, and NSDL.
- They cannot accept time deposits, but can link accounts to enable automatic transfer of excess balance to a Savings Bank account.
Post Office Savings Bank (PoSB)
- PoSB was established under the Government Savings Bank Act 1873.
- It accepts demand deposits, savings accounts, and time deposits.
- It can keep more than ₹2 lakh balance.
- E-banking and online bill payment services are available.
India Post Payments Bank (IPPB)
- IPPB was established in 2016 as a public limited company under the Companies Act 2013.
- It accepts only savings accounts and current accounts.
- It cannot accept time deposits, but can link accounts to enable automatic transfer of excess balance to a PoSB account.
- UPI, BHIM, NEFT, IMPS, and BBPS services are available.
Development Finance Institutions (DFIs)
- DFIs provide medium to long-term loans to industries, including support services like arranging foreign currency, underwriting, technical/management consultancy, and bank guarantees.
- They do not accept deposits from ordinary people.
- Examples include Industrial Finance Corporation of India (IFCI), National Small Industries Corporation (NSIC), ICICI, Industrial Development Bank of India (IDBI), and India Infrastructure Finance Company Ltd (IIFCL).
Non-Banking Financial Institutions (NBFCs)
- NBFCs include Infrastructure Finance Companies, Asset Reconstruction Companies, Factoring Companies, Gold Loan Companies, and Housing Finance Companies.
- Examples of NBFCs include Tata Capital, Reliance Capital, Infrastructure Leasing & Financial Services Limited (IL&FS), and others.
- NBFCs are classified into different categories based on their functions and services.
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Description
Quiz on types of banks, including Regional Rural Banks, Local Area Banks, and Small Finance Banks, and their differences. Also covering chronology and characteristics of these banks.
