The indigenous banking system is highly unorganized and segmented. Different indigenous bankers operate separately and independently. They have no coordination with each other and have no link with other banking sectors. The transfer of funds is not possible in such a system.
The indigenous bankers occupy an important place in the Indian money market and play a vital role in financing the internal trade. They are especially popular in the areas, which lack joint stock banks or are not properly served by these banks.
Indigenous bankers constitute the ancient banking system of India. They have been carrying on their age-old banking operations in different parts of the country under different names.