Type of Commercial Banks

1.      Exchange Banks:

Exchange banks are those banks which deal in foreign exchange and specialise in financing foreign trade. They are also called foreign exchange banks. In India, these exchange banks have their head offices located outside India. The Chartered Bank and the

Brindlays Bank have their head officers in England, whereas the American Express Bank, and Citi Bank have their head offices in the USA. These banks also render other services such as collecting and supplying information about the foreign customers, providing remittance facilities etc.

2.       Industrial Banks:

Industrial banks are those banks which provide medium term and long-term finance to industries for the purchase of land, machinery etc. They underwrite the debentures and shares of industries and also subscribe to them. In India, there are a number of financial institutions which perform the functions of industrial banks such as Industrial Development Bank of India, Industrial Finance Corporation of India, Industrial Credit and Investment Corporation of India, etc. Each State in India has its own State Financial Corporation. These institutions are also known as Development Banks.

3.       Agricultural Banks:

Agricultural banks are those banks which provide credit to farmers for short-­term, medium-term and long-term needs. In India, commercial banks, regional rural banks and Agricultural Cooperative Banks provide short-term loans to farmers. Land Development Bank give medium-term and long-term loans to farmers on the mortgage of their land. The National Bank for Agriculture and Rural Development (NABARD) provides refinance facilities to all types of banks which give loans to agriculturists.

4.       Cooperative Banks:

Cooperative banks are those financial institutions which are organised on the principle of cooperation. They provide short-term and medium-term loans to their members. In rural areas, there are agricultural cooperative banks which accept deposits and give loans to agriculturists, rural artisans, etc.

In urban areas, there are also cooperative banks which perform the functions of ordinary commercial banks but give loans to their members only. There is a State Cooperative Bank in every state of India with its branches at the district level known as the Central Cooperative Bank. The Central Cooperative Bank, in turn, has is branches both in urban and rural areas.

Every State Cooperative bank is an apex bank which provides credit facilities to the Central Cooperative Banks. It mobilises financial resources from the richer sections of the urban population by accepting deposits and creating credit like commercial banks and borrowing from the money market. It also gets funds from the Reserve Bank of India.

5.       Savings Banks:

Savings banks help promote small savings, and mobilise them. They have been very successful in Japan and Germany. In India, post offices act as savings bank.

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