1. Commercial bank: A commercial bank is an institution that offers financial services to individuals and businesses in the general public. Commercial banks often have physical branches that employ tellers and consultants who can help perform banking tasks for clients. This can include conducting deposits or withdrawals, organizing loans and creating protection for personal assets. A commercial bank can also assist business clients with securing business loans that they can use to fund their operations..
2. Investment bank: An investment bank primarily serves large organizations, corporations and institutions that need help with investments. Investment banks can help with tasks like organizing and confirming mergers and acquisitions, issuing securities and helping businesses finance projects that require large amounts of funding.
3. Retail bank: A retail bank functions similarly to a commercial bank by providing financial services to clients in the general public. However, a retail bank typically only serves individual clients by helping them with their banking needs and doesn't take on businesses as clients. Retail banks can assist individual clients with taking care of their money, accessing credit options and making secure deposits. A retail bank can also open new checking and savings accounts for clients, facilitate their personal loans and set up mortgages that can help them purchase pieces of property.
4. Community bank: Community banks usually exist to serve clients in the general area where they operate. This means that most community banks only take on clients who come from their communities, which often results in community banks being smaller than other types of banks. By focusing their services on members of the community, community banks can personalize the services they offer and usually establish lasting relationships with the clients they acquire.
5. Central bank: The central bank is the primary source for liquid resources that all banks in a banking system use. Most countries have some sort of central bank that supports the rest of the banking operations in the nation. In the United States, the central bank is called the Federal Reserve. The Federal Reserve has several functions, like purchasing and selling securities, determining how much money a bank can issue in loans, setting interest rates and helping banks borrow funds.

The banking sector plays a crucial role in facilitating credit, investment, and infrastructure, especially in a middle-income economy like India. The country is not only home to nearly 1.4 billion inhabitants, but also to a vast network of banks and non-banking financial companies (NBFC) to execute a diverse range of financial services for individuals, companies, and small enterprises. The Reserve bank of India is the primary regulator of banks in India.

RBI has decided to set up Public Credit Registry (PCR), an extensive database of credit information, accessible to all stakeholders. The Insolvency and Bankruptcy Code (Amendment) Ordinance, 2017 Bill has been passed and is expected to strengthen the banking sector. Microfinance industry’s gross loan portfolio (GLP) by 10% in FY22 to Rs. 2.85 trillion (US$ 36.42 billion).
The Government of India has been supportive of the banking sector in the country, especially on the financial inclusion agenda. A flagship program, the Pradhan Mantri Jan Dhan Yojana (PMJDY), was launched in August 2014 which aims to provide universal banking services to the unbanked by setting up bank accounts for them and issuing payment cards to all. As of 2022-23, the number of bank accounts—opened under the government’s flagship financial inclusion drive ‘Pradhan Mantri Jan Dhan Yojana (PMJDY)’—reached over 486 million and deposits in the Jan Dhan bank accounts totalled over US$ 24.2 billion.