question_answer

Explain different types of indigenous banks.

Answer:

Ans.     The indigenous bankers can be classified into the following three categories:

(i) Those whose main business is banking

(ii) Those who combine their banking business with trading activities and

(iii) Those who act as commission agents. (For them the banking business is a side business),

In India the majority of the indigenous bankers belong to the second category. The number of villages in India is too large, while the size of each village is so small that any comprehensive scheme for opening branches of commercial banks to cover all the villages is not possible. Therefore, the indigenous bankers have to continue to ' play a unique part mainly in rural finance. The indigenous bankers do not normally have contacts with other banking institutions in the country. Because, they operated mostly with their own funds and not depend upon deposits.