Classification of Bank on the basis of Ownership
At present, the word “Bank” is considered as an economic term in all countries. Banks are the financial institutions that are licensed to deal with money and its substitutes by accepting time and demand deposits, making loans, and investing in securities.
According to the economy, different countries have different types of bank ownership.
- Government Bank:
The bank which is established, directed, managed, and controlled by the government is called a government-owned bank. When the bank is governed by the management, control, organizing from the beginning to the organization, it is called a public bank or government bank. Generally, these banks are stated for service motive not for earning a profit. Sometimes a non-government bank is converted into government bank by nationalization. The main objective of these sectors is social welfare.
- Private Bank:
Private Banks are privately owned, directed and controlled. Banks that are controlled and managed by a particular person are called private banks. These banks are those banks that are owned and controlled by the private sector or individuals. Overall, these banks are owned by private individuals or corporations and not by the government or co-operative societies. Those banks are enlisted by the central bank. Indirectly these banks are controlled by the government. The main objective of the private sector is to earn a profit. For example, we can mention UBS Bank, Merrill Lync (The Bank of American Corporation), RBC (Royal Bank of Canada), HSBC Bank as a private bank, etc.
- Joint Ownership Bank:
Joint ownership banks are controlled by the government as well as by the non-government entity. 51% of the shares are belonging to the government and private entity holds the rests. The main objective of these banks is to help its members. State cooperative banks, District cooperative bank and Primary loan society are included in these banks.
- Autonomous Bank:
These banks are established by the special order of the government and the president. Such banks are formed by the special law of the government and through the special ordinance of the constitution. The government has no direct influence on the user of these banks. Bank of America Tower in New York City is one of the best parts of the autonomous bank in America. Such banks are independently regulated in the control system.
- Cooperative Banks:
Cooperative banks are operated on cooperative lines. Co-operative credit institutions are organized under a cooperative society’s law and play a significant role in meeting financial needs in rural areas.