Types Of Banking and Their Importance

Today banking plays a vital role in every individual’s life. Thus the use of banks and banking depends upon the services we need. The deposit we make in our bank account help the bank in giving loans to the required people or the needy. In short, bank works as a mediator. San Francisco Banking services today have improved a lot and this is the reason why today we can access and transfer funds to any bank account in the world. There are many types of banking available and one so one can choose the one you like and need as per your requirements.

Types Of Banking and Their Importance

There are many types of banks:

  • Commercial Bank
  • Retail Bank
  • Investment Banks
  • Cooperative Banks
  • Specialized Banks
  • Central Banks

Commercial Bank:- These banks provide banking services to businesses which includes debit and credit cards, loans, secured and unsecured loans.

Retail Banks:- Retail banks are the one that are providing services to normal customers like us. In retail banking customers are provided with debit cards, credit cards, cheque book, personal banking, Saving account, deposit boxes and many other things.

Public Sector Banks:- Public sector banks are the ones that are run mostly by governments and they have to focus on social objectives rather than profit.

Private Sector Banks:- Private banks are the ones that are controlled and managed by private promoters. Investment banks:- These banks are the ones that help the business, individuals and governments in raising capital by working as clients agent which ensures the security of payment. These banks also provide consultation services to companies and they give advice on mergers and other assets.

Central Banks:- These banks are for bankers. Central bank provides money and other things to the banks under it. These banks act as lender for the banks as well.

Cooperative Banks:- These banks are governed by cooperative societies. These banks provide credit at very low interest rates to their members and so these banks usually follow organizations.

So these are the types of banks available and one can choose accordingly. The biggest benefit of banks is that the loan they provide. For a normal class people, buying a house is very difficult and so banks lend money to these people as loan and in return bank take installments. These installments are small part of that bank lend to the customer and they also add a small interest rate on the principle amount.

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