Commercial Banks in India are broadly categorized into Scheduled Commercial Banks and Unscheduled Commercial Banks. The Scheduled Commercial Banks have been listed under the Second Schedule of the Reserve Bank of India Act, 1934. The selection measure for listing a bank under the Second Schedule was provided in section 42 (60 of the Reserve Bank of India Act, 1934.
Introduction of Banking:
Banking operations started in India as early as 1870 with the establishment of the Bank of Hindustan, considered as the first bank in India.
The second development in the banking sector happened with the incorporation of the Bank of Calcutta, the Bank of Bombay and the Bank of Bombay in accordance with the Presidency Bank's Act, 1876. All these banks joined hands to form the Imperial Bank of India. The reserve Bank of India was engaged in the performance of central banking activities before the establishment of the Reserve Bank of India.
Activities of Commercial Banks:
The modern Commercial Banks in India cater to the financial needs of different sectors. The main functions of the commercial banks comprise of transfer of funds, acceptance of deposits and then offering those deposits as loans for the establishment of industries, purchase of houses, equipments, capital investment purposes etc. The banks are allowed to act as trustees. On account of the knowledge of the financial market of India the financial companies are attracted towards them to act as trustees to take the responsibility of the security for the financial instrument like a debenture. The Indian Government presently hires the commercial banks for various purposes like tax collection and refunds, payment of pensions etc.
Modern Banking Techniques:
The immense growth of the IT sector is reflected in the banking operation of the Commercial Banks in India. Presently, the IT companies are engaged in the creating software packages to facilitate, accelerate, and organize the banking operations. The Rangarajan Committee and the Reserve Bank of India has played a major role in the popularizing the concept of computer application in banking activities. The computerization process has reached its peak in the present scenario with the use of Total Branch Automation Packages.
Products and Services offered by Commercial Banks in India:
The Commercial Banks in India offer variety of products and services like Investment Advisory Services, Tax Advisory services, Cash Management services, debit cards, ATM cards, credit cards, personal loans, education loans, housing loans, car loans, Investment Advisory Services, and consumer durable loans.
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