A Foreign Exchange Bank deals with foreign exchange transactions. It acts as a businessman in buying and selling foreign currencies. It grants loans to exporters and importers. These banks opens a letter of credit in favour of importer which enables him to meet his foreign currency needs. Thus, foreign exchange banks encourages flow of foreign investment into India and capture international capital markets.

Indigenous bankers are the earliest bankers in India. They do not ,come under the control of RBI.They accept deposit and deal in Hundis (a credit instrument like promissory note). They give loans to the people at a higher rate of interest against security of jewellery, crops, goods promissory notes, etc. For example, Money lenders, inarvadis, chettiars, pawn brokers are known as indigenous bankers.

1. A Multilateral Development Bank is formed by the Governments of a group of countries.
2. The member countries consist of developed donor countries and borrower countries.
3. International Bank for Reconstruction and Development, Asian Development Bank, African Development Bank, and European Investment Bank are some of the MOBs

Some banks are created for special purposes by the Government. Export and Import Bank of India was set up through Export- Import Bank of India Act, 1981.Its main objective is to facilitate international trade of Indian businessmen. EXIM Bank provides finance for import of technology, export product development, pre-shipment and post-shipment and overseas investment.

i. Money lenders charge exorbitant rates as high as 20 percent per day (12.16 percent per annum).
ii. It is called 'Kandhuvatti' or 'flight vatti' in Tamil.The Usurious Loans Act 1918 of the Government of India and the Tamil Nadu Prohibition of Charging Exorbitant Interest Act 2003 prohibit charging such interest rates.

An individual as well as institution lend money in rural and urban areas.
Certain community based businessmen provided loans for interest in different parts of India.
The reasons for their indispensable existence are:
i) They disburse loan at doorstep at any time of the day with or witheut security.
ii) They provide the required amount and at the required time.
iii) Very less documentation and procedures.
iv) Banks are not willing to advance loans to farmers or labourers with less income levels.

1. The banks which are not listed in the second schedule of the RBI act, 1934 are known as non-scheduled banks.
2. Banks with a reserve capital of less than 5 lakh rupees are qualified as non- scheduled banks.
3. There are five urban cooperative banks and three local area banks which function as non-scheduled banks in India.

Banks can be classified as follows:
A) Based on the functions of banks
B) Based on the status given by the RBI
C) Based on the ownership pattern
A) Based on the functions of banks ;
1) Central Bank
2) Commercial Banks
3) Development Banks
4) Co-operative Banks
5) Foreign Banks
6) Regional Rural Banks
7) Specialised Banks
8) Local Area Banks
9) Small Finance Banks
10) Payment Banks
11) Multilateral Development Banks
B) Based on status given by the RBI:
1) Scheduled Banks
2) Non Scheduled Banks
C) Based on the ownership Pattern
1) Private Sector Banks
2) Public Sector Banks
3) Co-operative Banks

Under this type, the banks are classified into scheduled banks and non-scheduled banks.
(i) All banks which satisfied the norms and included in the Second Schedule to the RBI Act, 1934 are called scheduled banks.
(ii) Such banks are given financial accommodation and remittance facilities at concessional rates by the RBI.
(iii) There is no non-scheduled commercial bank in India.
(iv) There are five Urban Cooperative Banks and three Local Area Banks which function as nonscheduled banks in India.
(v) Small Finance Banks and Payments Banks have not been licenses under Section 22 of the Banking Regulation Act, 1949.

(i) Huge finance required for investment expansion and modernisation of big industries and others are granted by a separate type of banks called development Banks. They are also called industrial banks.
(ii) The objective of development banks is not profit. Their aim is to develop the country and create employment opportunities.
(iii) Finance is provided by them for medium and long terms ranging from five to twenty years
(iv) Development banks do not accept deposits from the public. They subscribe the, shares and debentures of the industries. They provide technical and managerial consultancy services to industrialists.
(v) When a development bank is established for the development of agriculture industry it is called agricultural development bank.
(vi) Examples:
(1) IFCI - Industrial Finance Corporation of India
(2) SIDBI - Small Industries Development Bank of India
(3) MUDRA bank (for the development of micro industries).