Introduction of Banking Industry

The banking sector is the lifeline of any modern economy. It is very important for economic
development of a country that its financing requirements of trade, industry and agriculture are
met with higher degree of commitment and responsibility. As per the Reserve Bank of India
(RBI), India’s banking sector is sufficiently capitalized and well-regulated. Indian banking
industry has recently witnessed the roll out of innovative banking models like payments and
small finance banks. RBI’s new measures may go a long way in helping the restructuring of
the domestic banking industry.
As per 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 withdrawal by cheque, draft, order or otherwise.”
A bank is a financial institution whose purpose is to receive deposits and lend money to
individuals and business, disburse payments, invest funds in securities for returns, and
safeguard money. Its services savings and current accounts provide credit to borrowers in the
form of loans and through credit cards, and act as trustees of its clients.
Also, the advancement in technology has brought mobile and internet banking services to the
fore. The banking sector is laying greater emphasis on providing improved services to their
clients and upgrading their technology infrastructure to enhance customer’s overall
experience as well as give banks a competitive edge.
The Indian banking system consists of 12 public sector banks, 22 private sector banks, 46
foreign banks, 56 regional rural banks, 1485 urban cooperative-e banks and 96,000 rural
cooperative banks in addition to cooperative credit institutions As of November 2020, the
total number of ATMs in India increased to 209,282. (Source:
https://www.ibef.org/industry/banking-india.aspx )