Difference between In Band and Out of Band Protocols

In band
In-band control is a characteristic of network protocols with which data control is regulated. In-band control passes control data on the same connection as main data.In Band Protocols
Protocols that use in-band control include HTTP and SMTP.
SMTP is in-band because the control messages, such as “HELO” and “MAIL FROM”, are sent in the same stream as the actual message content.

Out of Band
In computer networking, out-of-band data (called “urgent data” in TCP) looks — to the application — like a separate stream of data from the main data stream. This can be useful for separating two different kinds of data. Note that just because it is called “urgent data” does not mean that it will be delivered any faster or with higher priority than data in the in-band data stream. Also beware that unlike the main data stream, the out-of-band data may be lost if the application cannot keep up with it. “Urgent data” notifies the receiving connection that the separate stream is more important than the main stream. Therefore it must first check the separate stream in order to process the main stream normally.

To Understand this, cosider the file transfer through FTP Protocol (an Out of Band Protocol)

FTP operates on the application layer of the OSI model, and is used to transfer files using TCP/IP. In order to do this an FTP server needs to be running and waiting for incoming requests. The client computer is then able to communicate with the server on port 21. This connection, called the control connection, remains open for the duration of the session, with a second connection, called the data connection, either opened by the server from its port 20 to a negotiated client port (active mode) or opened by the client from an arbitrary port to a negotiated server port (passive mode) as required to transfer file data.
The control connection is used for session administration (i.e., commands, identification, passwords) exchanged between the client and server using a telnet-like protocol.

For example “RETR filename” would transfer the specified file from the server to the client. Due to this two-port structure, FTP is considered an out-of-band protocol.