Banks are of the following types.
1. Central Bank: The central bank of a country serves as the leader of the banking system and the money market. Every country has a central bank which regulates money supply and credit with the help of the Government. It exercises supervision and control over all other banks in the country. The Reserve Bank of India is the central bank of our country. It acts as the bankers' bank. It carries out the country's monetary policy. It occupies a central position in the banking system of the country.
2. Commercial Banks: These are joint stock banks which receive deposits from the public and business firms. They also provide short-term and medium-term loans to customers. These banks carry on all kinds of banking functions within the framework of the Banking Regulation Act, 1949 in India. Com-mercial banks are classified into two broad categories scheduled and non-scheduled banks. Scheduled banks are those included in the second schedule to the Reserve Bank of India Act. Commercial banks not included in this schedule are non-scheduled banks..
3. Industrial Banks: These banks provide finance to industrial concerns for medium-term and long-time periods. They also purchase and underwrite shares and debentures of industrial enterprises. They also provide managerial and technical advice and assistance to industries. These banks are also called de-velopment banks or developmental financial institutions. Industrial Development Bank of India (IDBI), 255 Industrial Credit and Investment Corporation of India (ICICI), Industrial Finance Corporation if India (IFCI), are examples of industrial development banks in our country.
4. Merchant Banks: These banks perform merchant banking functions such as underwriting of securi-ties. They serve as issue houses, underwriters, lead managers, brokers, etc., for companies which issue shares and debentures. SBI Capital Markets is an examples of merchant banks.
5. Agricultural Banks: These banks provide medium-term and long-term loans to farmers against the security of land. They are therefore, called Lank Development Banks. Agricultural banks also provide loans for permanent improvement in agricultural land. Commercial banks, regional rural banks and agricultural cooperative banks provide short term loans to farmers. The National Bank for Agriculture and Rural Development (NABARD) provides refinance facilities to all types of banks which give loans to agriculturists.