Commercial Banks are profit making financial institutions that accept deposits, make loans,  and offer funds transfer (including transaction banking) services. Commercial banks usually  provide short-to-medium term credit as they gather funds from the general public that could be  withdrawn at a short notice. 

Public Sector Commercial Banks 

Public sector banks constitute the majority of commercial banking space in India both in terms  of credit outreach and asset size. These are the banks in which the government is a majority  shareholder. These banks comprise the 19 nationalized banks plus the State Bank of India  Group. 

Private Sector Commercial Banks  

India started giving licenses to private sector banks in the 1990s. A bank having its majority  shareholding in private hands is called a private bank. These banks are companies registered  with limited liability and regulated by the RBI. 

Regional Rural Banks (RRBs) 

RRBs were established in 1975 in India as local level banks. These are structured as  commercial banks and have the primary objective of providing credit and promoting growth in the rural economy. However, they accumulated a huge amount of non-performing assets (NPAs) and  due to their high cost of operation many were shut down. 

Foreign Banks 

By the end 2015, 46 foreign banks had branch office presence whereas 39 had representative  office presence in India. Standard Chartered Bank (SCB) had the highest 102 branches in the  country whereas HSBC and Citi had 50 and 45 branches, respectively. Foreign banks are  present in India since the eighteenth century. Foreign banks in India operate either as Wholly  Owned Subsidiary (WOS) or in branch mode. 

Payments Banks

In 2014-15 RBI decided to give licenses to specialized banks known as payment banks. These  banks can take small deposits (up to 1Lakh currently). However, these banks can’t issue credit  cards or make loans. 

Small Finance Banks  

Along with payments banks a new type of banks Small Finance Banks were also issued licenses  recently. Their objective is to promote financial inclusion in the society. 

Post-Office Savings Banks (POSB)  

Post offices have a widespread presence in India. They complement rural banks in terms of  providing deposit taking and money transfer facilities. However, they do not make loans or  provide credit. Recently these banks were also granted payments bank’s licenses. 

Wholesale and Long-Term Finance Banks (WLTFB)  

RBI has recently finalized guide-lines to issue licenses to another type of new banks known  as Wholesale and Long-term Finance Banks. These banks are being set-up to provide long term funding to infrastructure projects. 

Non-banking Financial Companies (NBFCs) 

NBFCs are companies registered under the Companies Act of 1956 or 2013, that carry out the  businesses of loans and advances, advances, acquisition of shares, stock-bonds hire-purchase,  insurance business or chit business. They are regulated by the RBI.

Important links –

1. https://www.investopedia.com/terms/f/foreignbranchbank.asp
2. https://www.investopedia.com/ask/answers/032615/what-difference-between-subsidiary-and-wholly-owned-subsidiary.asp