Basics of Financial Literacy PDF

VANITA VISHRAM WOMEN’S UNIVERSITY 1 Managed By Vanita Vishram, Surat School of Science & Technology Department of Computer Science VAC202 -2C Basics of Financial...

VANITA VISHRAM WOMEN’S UNIVERSITY 1 Managed By Vanita Vishram, Surat School of Science & Technology Department of Computer Science VAC202 -2C Basics of Financial Literacy Unit 1. Financial Planning and Banking Concept ________________________________________________________ Unit 1. Financial Planning and Banking Concept (35%) 1.1 Introduction to Credit, Debit and Saving, Time value of money, World currency chart and its exchange with Indian Rupees. 1.2 Management of spending and financial discipline 1.3 Banking products and services for Indian citizens, Introduction to Reserve Bank of India and other Banking categories. Financial Planning and Banking Concept : - History of Bank : - The banking sector development can be divided into three phases: Phase I: The Early Phase which lasted from 1770 to 1969 Phase II: The Nationalisation Phase which lasted from 1969 to 1991 Phase III: The Liberalisation or the Banking Sector Reforms Phase which began in 1991 and continues to flourish till date  VANITA VISHRAM WOMEN’S UNIVERSITY 2 Managed By Vanita Vishram, Surat School of Science & Technology Department of Computer Science Pre Independence Period (1786-1947): The first bank of India was the “Bank of Hindustan”, established in 1770 and located in the then Indian capital, Calcutta. However, this bank failed to work and ceased operations in 1832. During the Pre Independence period over 600 banks had been registered in the country Following the path of Bank of Hindustan, various other banks were established in India. They were:  The General Bank of India (1786-1791)  Oudh Commercial Bank (1881-1958)  Bank of Bengal (1809)  Bank of Bombay (1840)  Bank of Madras (1843) These three banks were later merged into one single bank in 1921, which was called the “Imperial Bank of India.” The Imperial Bank of India was later nationalised in 1955 and was named The State Bank of India, which is currently the largest Public sector Bank.  VANITA VISHRAM WOMEN’S UNIVERSITY 3 Managed By Vanita Vishram, Surat School of Science & Technology Department of Computer Science why many major banks failed to survive during the pre-independence period, the following conclusions can be drawn: 1 Indian account holders had become fraud-prone 2 Lack of machines and technology 3 Human errors & time-consuming 4 Fewer facilities 5 Lack of proper management skills Post Independence Period (1947-1991) At the time when India got independence, all the major banks of the country were led privately which was a cause of concern as the people belonging to rural areas were still dependent on money lenders for financial assistance with an aim to solve this problem, the then Government decided to nationalise the Banks. These banks were nationalised under the Banking Regulation Act, 1949. Whereas, the Reserve Bank of India was nationalised in 1949. Candidates can check the list of Banking sector reforms and Acts at the linked article. Given below is the list of these 14 Banks nationalised in 1969: 1 Allahabad Bank 2 Bank of India 3 Bank of Baroda 4 Bank of Maharashtra 5 Central Bank of India 6 Canara Bank 7 Dena Bank 8 Indian Overseas Bank 9 Indian Bank 10 Punjab National Bank 11 Syndicate Bank 12 Union Bank of India 13 United Bank  VANITA VISHRAM WOMEN’S UNIVERSITY 4 Managed By Vanita Vishram, Surat School of Science & Technology Department of Computer Science 14 UCO Bank Liberalisation Period (1991-Till Date): To provide stability and profitability to the Nationalised Public sector Banks, the Government decided to set up a committee under the leadership of Shri. M Narasimham to manage the various reforms in the Indian banking industry. The biggest development was the introduction of Private sector banks in India. RBI gave license to 10 Private sector banks to establish themselves in the country. These banks included: 1 Global Trust Bank 2 ICICI Bank 3 HDFC Bank 4 Axis Bank 5 Bank of Punjab 6 IndusInd Bank 7 Centurion Bank 8 IDBI Bank 9 Times Bank 10 Development Credit Bank Note :- Sir Osborne Smith was the first governor of the Reserve Bank of India (RBI), while Chintaman Dwarkanath Deshmukh (C.D. Deshmukh) was the first Indian governor. Central Government is appointed to RBI Governer. Current Governor of India:- Sanjay Malhotra(11 December 2024),Shaktikanta Das.( 12 December 2018 – 10 December 2024)  VANITA VISHRAM WOMEN’S UNIVERSITY 5 Managed By Vanita Vishram, Surat School of Science & Technology Department of Computer Science 1.1 Introduction of Credit: - Credit Card : - A credit card is a payment card, usually issued by a bank, allowing its users to purchase goods or services, or withdraw cash, on credit. Credit cards are plastic or metal cards used to pay for items or services using credit. Credit cards may be issued by stores, banks, or other financial institutions and often offer perks like cash back, discounts, or reward miles. The minimum limit on a credit card is the lowest amount of money you are allowed to spend using that card. The maximum limit is the highest amount of money you are allowed to spend using that card. Example: - someone with Rs 50,000 salary who has a good credit score might get a Credit Card limit of Rs 1,00,000 to Rs 1,50,000 per month. Card number: The card number is one of the most important parts of your card. It identifies your account with the card issuer, and those are the digits you need to provide when making purchases online or by phone. It's typically 16 digits, though some manufacturers use as little as 14 or as many as 19.  VANITA VISHRAM WOMEN’S UNIVERSITY 6 Managed By Vanita Vishram, Surat School of Science & Technology Department of Computer Science Cardholder’s name: This is the person authorized to use the card. That person didn’t necessarily open the account—they might simply have permission to spend from the account as an “authorized user.” Only authorized card users can make purchases with a debit or credit card, and merchants are encouraged to ask for ID before accepting payment with a card. Expiration date: You need to replace your card periodically. Banks typically mail out new cards shortly before old cards expire. Smart chips: These tiny metal processors make cards more secure than traditional magnetic- stripe-only cards. Chips make it harder for thieves to use stolen credit card numbers. If your card has a chip, use it whenever possible by inserting your card instead of swiping. The chip adds a single-use code to every transaction, which makes stolen data less useful. Payment network logo: When you paying online, there’s usually a drop-down menu that requires you to select which network your card belongs to. These logos are helpful when you plan to use your card to pay for goods or services. Magnetic stripe: This black strip contains information about you and your card, and specialized devices known as card readers gather that information. Every time you swipe your card at a merchant, you run the magnetic stripe through a card reader to provide your payment details. Magnetic stripes include your name, card number, expiration date, and other details. If that information is stolen (whether hackers steal the data or a dishonest merchant runs your card through a card-skimming device), the thief can use it to create a fake card with a magnetic stripe that matches your card. Magnetic stripes  VANITA VISHRAM WOMEN’S UNIVERSITY 7 Managed By Vanita Vishram, Surat School of Science & Technology Department of Computer Science occasionally wear down, especially if you’re a heavy card user. Strong magnets can also damage them. If your stripe stops working, merchants may need to punch in your card number by hand, which they may be reluctant to do for security reasons. You can order a replacement card with a new stripe if yours becomes damaged. Hologram: Holograms are security features that help merchants identify valid cards. Holograms are difficult to fake, and technology is constantly improving. Sometimes holograms appear on the front of your card. Bank contact information: If you need to get in touch with your bank, use the contact information on the back of your card. This is a convenient and easy way to prevent fraud. Signature panel: Your card should be signed before you can use it, so sign your name in this area. Signatures are a requirement for some card issuers, but not all. While signing your card used to be a crucial part of the credit card authentication process, cards are now secured electronically, so the signature panel is not as important as it used to be. Security codes: Cards are printed with an additional code to help ensure anybody using the card number has a legitimate, original card. A credit card security code is a three- or four-digit number designed to prevent fraudulent transactions. You might hear this code referred to as the Card Verification Value (CVV). Other common names for it include Card Security Code (CSC), Card Verification Code (CVC or CVC2) and Card Identification Number (CID).  VANITA VISHRAM WOMEN’S UNIVERSITY 8 Managed By Vanita Vishram, Surat School of Science & Technology Department of Computer Science Network logos: Your card might have additional network logos on the back, often in the lower- right corner. These logos help you figure out which ATMs you can use for free. You can use other ATMs, but you'll most likely pay fees to the ATM operator. Plus, you might pay additional fees to your bank or credit card issuer if you use out-of-network ATMs.  VANITA VISHRAM WOMEN’S UNIVERSITY 9 Managed By Vanita Vishram, Surat School of Science & Technology Department of Computer Science Apply for Credit Card :-  VANITA VISHRAM WOMEN’S UNIVERSITY 10 Managed By Vanita Vishram, Surat School of Science & Technology Department of Computer Science How to work Credit Card?: -  VANITA VISHRAM WOMEN’S UNIVERSITY 11 Managed By Vanita Vishram, Surat School of Science & Technology Department of Computer Science 1.1 Introduction of Debit:- A debit card is a payment card that deducts money directly from your checking account. Also called “check cards” or "bank cards," debit cards, can be used to buy goods or services or to get cash from an ATM. Debit cards can help you reduce the need to carry cash. If you have a Classic Visa, Mastercard, or RuPay Debit Card linked to your bank account, you can withdraw Rs. 25,000 daily. For Platinum Visa, Mastercard or RuPay Debit Card, the daily withdrawal limit is Rs. 75,000. The Business Platinum Visa and Mastercard have a daily withdrawal limit of Rs. 1,00,000. Debit card purchases may require a personal identification number (PIN)  VANITA VISHRAM WOMEN’S UNIVERSITY 12 Managed By Vanita Vishram, Surat School of Science & Technology Department of Computer Science Difference between DebitCard and CreditCard:-  VANITA VISHRAM WOMEN’S UNIVERSITY 13 Managed By Vanita Vishram, Surat School of Science & Technology Department of Computer Science 1.1 Saving :- A savings bank account is a deposit account that allows you to save money and earn interest on it. It's a basic type of account that you can open at any bank. You can use a savings account to: Manage your finances, Save for the future, Manage day-to-day expenses, Keep money for emergencies, and Save for shorter-term goals like a vacation or home repair.  VANITA VISHRAM WOMEN’S UNIVERSITY 14 Managed By Vanita Vishram, Surat School of Science & Technology Department of Computer Science Time value of money : -  VANITA VISHRAM WOMEN’S UNIVERSITY 15 Managed By Vanita Vishram, Surat School of Science & Technology Department of Computer Science FV=PV×(1+i) n where: FV=Future value PV=Present value (original amount of money) i=Interest rate per period n=Number of periods World currency chart and its exchange with Indian Rupees 1.Asian Currencies vs Indian Currency Exchange Rate :- Currency Code Country Currency Value in ₹ Afghanistan Afghan Afghani AFN 1.16 INR Armenia Armenian Dram AMD 0.21 INR Azerbaijan Azerbaijani Manat AZN 49.00 INR Bangladesh Bangladeshi Taka BDT 0.76 INR Cambodia Cambodian Riel KHR 0.021 INR China Chinese Yuan CNY 11.50 INR Georgia Georgian Lari GEL 31.14 INR Hong Kong Hong Kong Dollar HKD 10.63 INR Indonesia Indonesian Rupiah IDR 0.0051 INR Japan Japanese Yen JPY 0.54 INR Kazakhstan Kazakhstani Tenge KZT 0.19 INR Laos Lao Kip LAK 0.0039 INR Malaysia Malaysian Ringgit MYR 17.43 INR  VANITA VISHRAM WOMEN’S UNIVERSITY 16 Managed By Vanita Vishram, Surat School of Science & Technology Department of Computer Science South Korea South Korean Won KRW 0.061 INR Sri Lanka Sri Lankan Rupee LKR 0.28 INR Maldives Maldivian Rufiyaa MVR 5.39 INR Pakistan Pakistani Rupee PKR 0.30 INR Philippines Philippine Peso PHP 1.45 INR Thailand Thai Baht THB 2.25 INR Taiwan Taiwanese Dollar TWD 2.56 INR Vietnam Vietnamese Dong VND 0.0033 INR 2. Middle-Eastern Currencies vs Indian Currency Exchange Rate:- Country Currency Currency Code Value in ₹ Bahrain Bahraini Dinar BHD 220.96 INR United Arab Emirates Emirati Dirham AED 22.68 INR Saudi Arabia Saudi Arabian Riyal SAR 22.21 INR Oman Omani Rial OMR 216.38 INR Israel Israeli Shekel ILS 22.15 INR Iraq Iraqi Dinar IQD 0.064 INR Iran Iranian Rial IRR 0.0020 INR Jordan Jordanian Dinar JOD 117.52 INR Kuwait Kuwaiti Dinar KWD 270.41 INR Lebanon Lebanese Pound LBP 0.00093 INR Qatar Qatari Riyal QAR 22.88 INR Libya Libyan Dinar LYD 17.15 INR  VANITA VISHRAM WOMEN’S UNIVERSITY 17 Managed By Vanita Vishram, Surat School of Science & Technology Department of Computer Science 3. South American Currencies vs Indian Currency Exchange Rate:- Country Currency Currency Code Value in ₹ Argentina Argentine Peso ARS 0.095 INR Bolivia Bolivian Boliviano BOB 12.13 INR Brazil Brazilian Real BRL 16.23 INR Chile Chilean Peso CLP 0.087 INR Columbia Colombian Peso COP 0.021 INR Peru Peruvian Sol PEN 22.64 INR Paraguay Paraguayan Guaraní PYG 0.011 INR Uruguay Uruguayan Peso UYU 2.16 INR Venezuela Venezuelan Bolívar VEF 0.0000229447 INR 4.North American Currencies vs Indian Currency Exchange Rate : - Currency Code Value in ₹ Country Currency The United States United States Dollar USD 83.30 INR Canada Canadian Dollar CAD 60.91 INR Aruba Aruban/Dutch Guilder AWG 46.28 INR Barbados Bajan Dollar BBD 41.49 INR Bermuda Bermudian Dollar BMD 83.30 INR Bahamas Bahamian Dollar BSD 83.73 INR Dominica Dominican Peso DOP 1.42 INR Jamaica Jamaican Dollar JMD 0.54 INR Mexico Mexican Peso MXN 4.91 INR  VANITA VISHRAM WOMEN’S UNIVERSITY 18 Managed By Vanita Vishram, Surat School of Science & Technology Department of Computer Science 1.2 Management of spending and financial discipline 1.2.1 Management of spending As shown below, the main areas of personal finance are income, spending, saving, investing, and protection. Each of these areas will be examined in more detail below. 1 Income :- Income refers to a source of cash inflow that an individual receives and then uses to support themselves and their family. It is the starting point for our financial planning process. Common sources of income are:  Salaries  Bonuses  Hourly wages  Pensions  Dividends These sources of income all generate cash that an individual can use to either spend, save, or invest. In this sense, income can be thought of as the first step in our personal finance roadmap.  VANITA VISHRAM WOMEN’S UNIVERSITY 19 Managed By Vanita Vishram, Surat School of Science & Technology Department of Computer Science 2 Spending : - Spending includes all types of expenses an individual incurs related to buying goods and services or anything that is consumable (i.e., not an investment). All spending falls into two categories: cash (paid for with cash on hand) and credit (paid for by borrowing money). The majority of most people’s income is allocated to spending. Common sources of spending are:  Rent  Mortgage payments  Taxes  Food  Entertainment  Travel  Credit card payments The expenses listed above all reduce the amount of cash an individual has available for saving and investing. If expenses are greater than income, the individual has a deficit. Managing expenses is just as important as generating income, and typically people have more control over their discretionary expenses than their income. Good spending habits are critical for good personal finance management. 3 Saving :- Saving refers to excess cash that is retained for future investing or spending. If there is a surplus between what a person earns as income and what they spend, the difference can be directed towards savings or investments. Managing savings is a critical area of personal finance. Common forms of savings include:  Physical cash  Savings bank account  Checking bank account  Money market securities  VANITA VISHRAM WOMEN’S UNIVERSITY 20 Managed By Vanita Vishram, Surat School of Science & Technology Department of Computer Science Most people keep at least some savings to manage their cash flow and the short- term difference between their income and expenses. Having too much savings, however, can actually be viewed as a bad thing since it earns little to no return compared to investments. 4 Investing : - Investing relates to the purchase of assets that are expected to generate a rate of return, with the hope that over time the individual will receive back more money than they originally invested. Investing carries risk, and not all assets actually end up producing a positive rate of return. This is where we see the relationship between risk and return. Common forms of investing include:  Stocks  Bonds  Mutual funds  Real estate  Private companies  Commodities  Art Investing is the most complicated area of personal finance and is one of the areas where people get the most professional advice. There are vast differences in risk and reward between different investments, and most people seek help with this area of their financial plan. 5 Protection : - Personal protection refers to a wide range of products that can be used to guard against an unforeseen and adverse event. Common protection products include:  Life insurance  Health insurance  Estate planning  VANITA VISHRAM WOMEN’S UNIVERSITY 21 Managed By Vanita Vishram, Surat School of Science & Technology Department of Computer Science This is another area of personal finance where people typically seek professional advice and which can become quite complicated. There is a whole series of analysis that needs to be done to properly assess an individual’s insurance and estate planning needs. The Personal Finance Planning Process : - Good financial management comes down to having a solid plan and sticking to it. All of the above areas of personal finance can be wrapped into a budget or a formal financial plan.These plans are commonly prepared by personal bankers and investment advisors who work with their clients to understand their needs and goals and develop an appropriate course of action.Generally speaking, the main components of the financial planning process are:  Assessment  Goals  Plan development  Execution  Monitoring and reassessment Personal Finance Budget – Example :- Preparing a budget or a financial plan is critical for giving you the best shot at achieving your personal and family goals. Below is an example of a simple monthly budget that could be used to manage your income, expenses, savings, and investments. As you can see in the example below, there are three potential sources of income (salary, bonus, and other), followed by a list of expenses (rent, food, groceries, restaurants, entertainment, childcare costs, vacations, etc.), and the difference between the two is the person’s monthly surplus or deficit.  VANITA VISHRAM WOMEN’S UNIVERSITY 22 Managed By Vanita Vishram, Surat School of Science & Technology Department of Computer Science 1.2.2 Financial discipline :- Financial discipline is the practice of developing a set of rules to achieve one’s financial goals. It involves making informed decisions for spending and saving. It is a skill meant to make one have control over money rather than the other way around. 1. Set a realistic budget. 2. List your debts and settle them 3. Build an emergency fund 4. Cut down on spending 5. Look into the future Set a realistic budget : - To start, determine how much of your money comes in and goes then set a practical monthly budget. Utilise a budget journal, an online  VANITA VISHRAM WOMEN’S UNIVERSITY 23 Managed By Vanita Vishram, Surat School of Science & Technology Department of Computer Science spreadsheet or an app that can track your budget and try your best to adhere to this. List your debts and settle them : - Identify your debts and how much it will cost you to settle them. Make sure to include outstanding loans for credit cards, mortgages and medical fees among others. Inclusion of debt payments into your budget guarantees funding for every month. Build an emergency fund:- Save up at least three to six months’ worth of living expenses for emergencies or unexpected eventualities. This fund will serve as your safety net so it’s not for that dream getaway or the luxurious item you’ve been eyeing for a while now. Cut down on spending:- Make wise spending habits by cooking at home, sticking to a shopping list, reconsidering your subscriptions and reducing household expenses like electricity use. Look into the future:- Create a savings plan for retirement and seek sound opportunities for investments. Keep in mind that there are no hard-and-fast rules when it comes to money and your rules may need to change as your priorities and goals do. 1.3 Banking products and services for Indian citizens :- Banking products : - Definition of all this point in notepad 1. Cards 2. Deposits 3. Credit cards 4. Forex 5. Payment services 6. Insurance 7. Savings accounts 8. Loans 9. Investments 10. Money market accounts 11. Current account  VANITA VISHRAM WOMEN’S UNIVERSITY 24 Managed By Vanita Vishram, Surat School of Science & Technology Department of Computer Science 12. Online Banking 13. Demat account 14. Mutual funds 15. Overdraft 16. Basic banking products 17. ATM 18. E-cheque Banking services for Indian citizens : - 1.3.1 Introduction to Reserve bank of India :- Establishment The Reserve Bank of India was established on April 1, 1935 in accordance with the provisions of the Reserve Bank of India Act, 1934. The Central Office of the Reserve Bank was initially established in Kolkata but was permanently moved to Mumbai in 1937. The Central Office is where the Governor sits and where policies are formulated. Though originally privately owned, since nationalisation in 1949, the Reserve Bank is fully owned by the Government of India. Functions :- Currency: The RBI regulates the issue and supply of the Indian rupee. It also manages the country's main payment systems.  VANITA VISHRAM WOMEN’S UNIVERSITY 25 Managed By Vanita Vishram, Surat School of Science & Technology Department of Computer Science Banking: The RBI regulates the banking sector and acts as the bankers' bank. Monetary policy: The RBI formulates and implements the national monetary policy. Price stability: The RBI aims to maintain price stability while also keeping the objective of growth. Development: The RBI supports the government in its developmental projects and policies. Deposit insurance: The RBI has set up the Deposit Insurance Guarantee Corporation to protect the deposits of small depositors. Other banking categories : -  VANITA VISHRAM WOMEN’S UNIVERSITY 26 Managed By Vanita Vishram, Surat School of Science & Technology Department of Computer Science 1. Commercial banks: - These include public sector banks, private sector banks, foreign banks, and regional rural banks. Types of Scheduled Commercial Majority Shareholder(s) Example(s) Banks (SCBs) Public Sector SBI, PNB, Canara Bank, Bank of Government of India Banks Baroda, Bank of India, etc. (PSBs) Private ICICI Bank, HDFC Bank, Axis Bank, Sector Private Individuals Kotak Mahindra Bank, Yes Bank etc. Banks Standard Chartered Bank, Citi Bank, Foreign Foreign Entities HSBC, Deutsche Bank, BNP Paribas, Banks etc. Regional Central Government, Concerned Andhra Pradesh Grameena Vikas Rural Banks State Government, and Sponsor Bank, Uttranchal Gramin Bank, (RRBs) Bank in the ratio of 50:15:35 Prathama Bank, etc.  VANITA VISHRAM WOMEN’S UNIVERSITY 27 Managed By Vanita Vishram, Surat School of Science & Technology Department of Computer Science Public Sector Banks (PSBs) : - Public Sector Banks (PSBs) are also known as Nationalized Banks. They refer to those financial institutions under the Banking System in India where the majority ownership, i.e. more than 50% of the shares, lies with the government. Barring the Reserve Bank of India (which is not a ‘bank’ in the technical sense), all other Public Sector Banks were created in India through the process of nationalization of banks in India. Private Sector Banks : - Private Sector Banks are those banks under the Indian Banking System in which the private sector has a shareholding of more than 51%. For example, the ICICI Bank, Axis Bank, etc. Private Sector Banks, which form part of the Banking System in India, are mainly of two types – Old Private Sector Banks, and New Private Sector Banks. A.Old Private Sector Banks These are banks under the Banking System in India that were left out of the nationalization process (in 1969 and 1980) due to their small size and regional focus. B.New Private Sector Banks These are banks in the Indian Banking System that came into existence after 1991 with the introduction of economic reforms and financial sector reforms. After the adoption of LPG reforms in 1991, the Banking Regulation Act was amended in 1993. It allowed the entry of New Private Sector Banks in the Banking System in India. Foreign Banks :- Foreign Banks refer to those banks that have their headquarters in a different country but operate branches or subsidiaries within India. For example, HSBC, Citi Bank, etc. Regional Rural Banks:-  VANITA VISHRAM WOMEN’S UNIVERSITY 28 Managed By Vanita Vishram, Surat School of Science & Technology Department of Computer Science The concept of Regional Rural Banks (RRBs) was introduced in 1975 on the basis of the recommendations of the Narasimham Working Group (1975). Providing credit to the weaker sections of society including small and marginal farmers, agricultural laborers, artisans, and small entrepreneurs in rural areas at concessional rates of interest, and To mobilize rural savings and channel them for supporting productive activities in the rural areas, check the outflow of rural deposits to urban areas, reduce regional imbalances, and increase rural employment generation. The RRBs mobilize deposits primarily from rural and semi-urban areas and provide loans and advances mainly to small & marginal farmers, agricultural laborers, rural artisans, and other such segments of the priority sector. Overall, the RRBs are required to provide 75% of their total credit as priority sector lending. Regional Rural Banks are regulated by RBI and supervised by the National Bank for Agriculture and Rural Development (NABARD). Functions of commercial banks :-  Accepting deposits  Providing loans  Creating credit  Paying and collecting credit  Buying and selling securities  Bullion trading  Remitting money  Discounting bills of exchange  Providing locker facilities 2.Small finance banks :- Provide basic banking services like deposits and loans to small businesses, farmers, and low-income households Help people who are unbanked or have limited access to banking Examples include Ujjivan Small Finance Bank, AU Small Finance Bank, and Equitas Small Finance Bank. 3.Payments banks: -  VANITA VISHRAM WOMEN’S UNIVERSITY 29 Managed By Vanita Vishram, Surat School of Science & Technology Department of Computer Science These are a relatively new addition to the banking structure. Provide basic banking services like deposits and remittances to low-income families, migrants, and small businesses Generally offer services through mobile applications Cannot offer loans, credit cards, or net banking Examples include Airtel Payments Bank, Paytm Payments Bank, and NSDL Payments Bank. 4.Co-operative banks:- There are many types of cooperative banks in India, including rural, urban, state, and national-level banks. Cooperative banks are owned and operated by their members, who elect a board of directors. Rural cooperative banks (RCBs): Provide financial services to rural communities, especially in agriculture. Urban cooperative banks (UCBs): Provide financial services to people in urban and semi-urban areas. State cooperative banks (SCBs): Provide financial services to the people of a state. National-level cooperative banks: Operate across the country and are regulated by the Reserve Bank of India (RBI). Primary agricultural credit societies (PACSs): Provide credit and other services to farmers. State cooperative agriculture and rural development banks (SCARDBs): Provide long-term finance to members. Primary cooperative agriculture and rural development banks (PCARDBs): Provide long-term finance to members. District cooperative central banks (DCCBs): Operate at the district level and grant money to primary cooperative banks.  VANITA VISHRAM WOMEN’S UNIVERSITY 30 Managed By Vanita Vishram, Surat School of Science & Technology Department of Computer Science Cooperative banks are based on the principles of cooperation, mutual assistance, and shared ownership. They have helped the rural population by providing loans and credits at lower interest rates than local money lenders.