Scheduled Commercial Banks in India

The scheduled commercial banks are those banks which are included in the second schedule of RBI Act 1934 and which carry out the normal business of banking such as accepting deposits, giving out loans and other banking services. The major difference between Scheduled Commercial Banks and Scheduled Cooperative Banks is their holding pattern, since cooperatives are registered under the Cooperative Societies Act as cooperative credit institutions.

Scheduled Commercial Banks can be further divided into four groups:

  • Public Sector Banks: This includes:

    • SBI & Associates
    • Nationalized Banks
    • Other Public Sector Banks
  • Private Banks
  • Foreign Banks
  • Regional Rural Banks

Scheduled Commercial Banks (Public Sector)

At present, there are 27 Public Sector Banks in India including SBI (plus its 5 associates) and 19 nationalized banks. Further, there are two banks which have been categorized by RBI as “Other Public Sector Banks”. IDBI and Bhartiya Mahila Bank come under this category.

SBI & Associates

State Bank of India with its around 17,000 branches and around 200 foreign offices, is India’s largest banking and financial services company by assets. With over 2 lakh employees, SBI is banker to millions of Indians. This bank got birth in the British Era. Its first parents were three presidency banks viz. Bank of Calcutta (later Bank of Bengal), Bank of Bombay and the Bank of Madras. In 1921, these three presidency banks were merged in one entity called “Imperial Bank of India”. The Imperial Bank of India was nationalized in 1955 and was renamed a State Bank of India. Thus, State bank of India is the oldest Bank of India.

In 1959, there were eight associates of SBI. The current five associate banks of SBI are:

  • State Bank of Bikaner & Jaipur
  • State Bank of Hyderabad
  • State Bank of Mysore
  • State Bank of Patiala
  • State Bank of Travancore

Apart from the above, the SBI also has seven non-banking subsidiaries viz. SBI Capital Markets Ltd, SBI Funds Management Pvt Ltd, SBI Factors & Commercial Services Pvt Ltd, SBI Cards & Payments Services Pvt. Ltd. (SBICPSL), SBI DFHI Ltd, SBI Life Insurance Company Limited and SBI General Insurance.

Is SBI a nationalized Bank?

Nationalized Banks

There are 19 nationalized banks in India as follows:

  1. Allahabad Bank
  2. Andhra Bank
  3. Bank of Baroda
  4. Bank of India
  5. Bank of Maharashtra
  6. Canara Bank
  7. Central Bank of India
  8. Corporation Bank
  9. Dena Bank
  10. Indian Bank

  1. Indian Overseas Bank
  2. Oriental Bank of Commerce
  3. Punjab & Sind Bank
  4. Punjab National Bank
  5. Syndicate Bank
  6. UCO Bank
  7. Union Bank of India
  8. United Bank of India
  9. Vijaya Bank

Other Public Sector Banks

Further, there are two scheduled commercial banks in India, which have been classified as “other Public Sector Banks”. These are

  1. IDBI
  2. Bhartiya Mahila Bank.

Scheduled Commercial Banks (Private Banks)

In private sector banks, most of the capital is in private hands. There are two types of private sector banks in India viz. Old Private Sector Banks and New Private Sector Banks.

Old Private Banks

There are 13 old private sector banks as follows:

  1. Catholic Syrian Bank
  2. City Union Bank
  3. Dhanlaxmi Bank
  4. Federal Bank
  5. ING Vysya Bank
  6. Jammu and Kashmir Bank
  7. Karnataka Bank

  1. Karur Vysya Bank
  2. Lakshmi Vilas Bank
  3. Nainital Bank
  4. Ratnakar Bank
  5. South Indian Bank
  6. Tamilnad Mercantile Bank

Out of the above banks, the Nainital Bank is a subsidiary of the Bank of Baroda, which has 98.57% stake in it. Some other old generation private sector banks in India have merged with other banks. For example, Lord Krishna Bank merged with Centurion Bank of Punjab in 2007; Sangli Bank merged with ICICI Bank in 2006; Centurion Bank of Punjab merged with HDFC in 2008.

New Private Sector Banks

The new private sector banks were incorporated as per the revised guidelines issued by the RBI regarding the entry of private sector banks in 1993. At present, there are seven new private sector banks as follows:

  1. Axis Bank
  2. Development Credit Bank (DCB Bank Ltd)
  3. HDFC Bank
  4. ICICI Bank
  5. IndusInd Bank
  6. Kotak Mahindra Bank
  7. Yes Bank

Apart from the above, there are two banks which are yet to commence operation. These have obtained ‘in-principle’ licenses from RBI. They are

  1. IDFC
  2. Bandhan Bank of Bandhan Financial Services.

Foreign Banks

As of December 2014, there are 43 foreign banks from 26 countries operating as branches in India and 46 banks from 22 countries operating as representative offices in India. Most of the foreign banks in India are niche players. RBI policy towards presence of foreign banks in India is based upon two cardinal principles viz. reciprocity and single mode of presence. more details about regulation of Foreign Banks by RBI, click here

Regional Rural Banks

Regional Rural Banks were started in 1970s due to the fact that even after nationalization, there were cultural issues which made it difficult for commercial banks, even under government ownership, to lend to farmers. Each RRB is owned by three entities with their respective shares as follows:

  • Central Government → 50%
  • State government → 15%
  • Sponsor bank → 35%

They are regulated by NABARD. More information on RRBs is here.

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