Banky’s Understanding: Banking is defined in Section 5(b) of the Banking Regulation Act, 1949: ‘Banking means the accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise, and withdrawable by cheque, draft, order or otherwise.’ Three essential elements: (1) Accepting deposits from PUBLIC, (2) For purpose of LENDING or INVESTMENT, (3) Repayable on demand and withdrawable by CHEQUE. If any element is missing → it’s NOT banking!

Banky’s Understanding: A bank is ‘scheduled’ if it’s included in the Second Schedule of the RBI Act, 1934. Criteria: (1) Paid-up capital + reserves ≥ ₹5 lakh, (2) RBI is satisfied that bank’s affairs are not detrimental to depositors’ interests. Benefits: can borrow from RBI, participate in clearing house, eligible for DICGC deposit insurance. Almost all major banks (PSBs, private, foreign, RRBs) are scheduled. Non-scheduled = very small banks not meeting criteria.

Banky’s Understanding: Government of India holds majority stake (51% or more) in these banks. Currently 12 PSBs after mega-mergers (SBI, BoB, PNB, Canara, Union Bank, IoB, Bank of India, Central Bank, UCO, Indian Bank, Bank of Maharashtra, Punjab & Sind). SBI is the largest PSB. Nationalisation history: 14 banks (1969) + 6 banks (1980). FDI allowed: 20% through Government route for public banking.

Banky’s Understanding: Conceptualised in 1975 based on Narasimham Committee recommendations. Ownership: Centre 50% + State 15% + Sponsor Bank 35%. Currently 43 RRBs. Each RRB is sponsored by a commercial bank (e.g., SBI sponsors several RRBs). NABARD exercises supervisory functions over RRBs. PSL target for RRBs: 75% of ANBC (vs 40% for commercial banks). Focus: rural and semi-urban areas, agriculture, small enterprises.

Banky’s Understanding: Can do EVERYTHING a regular bank does — accept deposits AND lend. But with a special mandate: serve unserved and underserved segments. 75% of credit must go to priority sector (vs 40% for regular banks). Must have at least 25% branches in unbanked rural centres. Minimum paid-up capital: ₹200 crore. Examples: AU Small Finance Bank, Equitas, Ujjivan.

Banky’s Understanding: Can accept deposits up to ₹2 lakh per customer. CANNOT lend or issue credit cards. Can provide: debit cards, internet banking, mobile banking, bill payments, remittances, third-party fund transfers. Must invest deposits in govt securities (75% in SLR-eligible). Examples: Airtel Payments Bank, India Post Payments Bank, Paytm Payments Bank, Jio Payments Bank. Designed for financial inclusion — bringing basic banking to the unbanked.

Banky’s Understanding: Run on cooperative principles: mutual help, democratic management, voluntary membership. Two structures: Urban Cooperative Banks (UCBs) — operate in urban/semi-urban areas, under RBI regulation. Rural Cooperatives — 3-tier (State Coop Bank → District Central Coop Bank → Primary Agricultural Credit Societies/PACS). NABARD supervises rural cooperatives. Recently, cooperative banks brought under RBI supervision through Banking Regulation Act amendment.

Banky’s Understanding: Fintech: Financial technology companies (Paytm, PhonePe, Razorpay) — use tech to provide financial services. Techfins: Technology companies entering finance (Google Pay, Amazon Pay) — tech-first, finance-second. Neobanks: Fully digital banks with NO physical branches — operate via apps/websites, often in partnership with licensed banks (e.g., Jupiter, Fi, Niyo). They’re not separately licensed in India — work as partners of existing banks. The UPI revolution (Unified Payments Interface) has transformed India’s payment landscape.