Given the ever-growing population, Banking in India is a long-running queue, with never-ending forms, etc.
On top of this, there is some serious hardship in terms of understanding the policies and regulations.
However, there is a significant change in the banking industry over the past two decades. A shift in technology and liberalization of the economy.
In this article, we will have a brief understanding of the types of banks, types of banking and what are the challenges associated with it.
Types of banks in India:
- Scheduled Commercial Banks
- Public Sector Banks
- Private Sector Banks
- Regional Rural Banks
- Foreign Banks
- Co-operative Banks
- Small Finance Banks
Types of banking in India
- Retail Banking: Individuals and households can utilize this sort of banking to get credit cards, loans, mortgages, and checking and savings accounts.
- Commercial Banking: Corporate loans, working capital financing, and trade financing are just a few of the services this sort of banking offers to companies.
- Investment Banking: In addition to underwriting securities, issuing bonds, and offering merger and acquisition advice, this sort of banking offers services to businesses and governments.
- Private Banking: High-net-worth individuals can use these banking services for wealth management, private loans, and individualized financial planning.
- Central Banking: This sort of banking is in charge of carrying out monetary policy and overseeing the banking industry. The central bank is an independent organization in many nations that is in charge of controlling the money supply and preserving economic stability.
- Online Banking: This sort of banking is in charge of carrying out monetary policy and overseeing the banking industry. The central bank is an independent organization that is in charge of controlling the money supply and preserving economic stability.
- Microfinance Banking: Microloans and savings accounts are among the financial services offered by this category of banking to low-income people and small companies.
Challenges with Banking in India:
- Non-performing assets (NPAs) and bad loans: High NPA numbers in India’s banks are a problem since they reduce their profitability and stability.
- Lack of financial inclusion: A significant portion of the Indian population is still unbanked and unable to access basic financial services, despite the efforts of the government and institutions.
- Cybersecurity threats: The banking industry is becoming more digital, which increases the danger of cyberattacks and financial fraud. This presents a challenge for banks in terms of safeguarding consumer data and upholding the security of their systems.
- Competition from non-traditional players: Conventional banks are dealing with more competition from new players who are providing innovative and practical financial services, such as fintech firms and digital wallets.
- Regulatory compliance: In India, banks must navigate a complicated regulatory landscape where they must balance their economic objectives with a multitude of rules and regulations.
- Lack of infrastructure: Indian rural and isolated areas frequently lack essential facilities like electricity and internet access, which makes it challenging for banks to offer their services there.
What does the future of banking in India look like?
The future of banking in India is expected to be driven by digitalization and increased adoption of technology. To read more, access this complete article here: Banking 101
Original blog: https://fello.in/blogs/banking101
