BFSI stands for Banking, Financial and Insurance sector. Generally, it represents a major portion of the Indian economy which comprises of all Banking Insurance and Non-banking institutions.
India, as a developing nation have always fostered the positives for the BFSI sector to flourish at an appreciable pace. Banking is one of the pillar components of the BFSI industry. It comprises of the following structure:
- Central Bank
In India, the Reserve Bank of India is the most designated Central Bank of the country. It holds the power to supervise the functioning of the national banking industry. It has the power to authorise the currency flow and to increase or decrease the same to check the inflation.
- Scheduled Commercial Bank
These banks are further classified into three types:
- Public Sector Banks
The banks wherein the government owns the majority stake and whose shares are listed on public exchanges are referred as Public Sector banks. Many public sector banks are merged under single pre-existing bank.
Some of these banks are Vijaya Bank, Dena Bank have merged into Bank of Baroda.
- Private Sector Banks
The banks where the majority stake is controlled by private shareholders are known as Private sector banks. In India there are around 22 active Private Sector Banks. Some of these banks are ICICI bank, Axis Bank.
- Foreign Banks
The banks whose headquarters are outside India are referred as Foreign Banks. The host countries gain dual benefits as foreign banks as they accelerate dealings in international transactions while increasing the employment scope in the banking sector. In total there are 45 foreign banks in India.
Due to the rising per capita income, expanding distribution, introduction of new products, networking and increasing customer awareness of financial products, the BFSI sector is growing exponentially. In the coming years, BFSI industry will continue to be a top priority industry for India’s economic development.