Business Analysts can have or not have IT background.Generally the people who do such work is a technical person who has had programming exp. but now as the business complexities increase and as more professionalism is expected we now see functional consultants.These are people who have worked in the specific industry and have domain experience.They help a lot in understanding the exact business requirements which is the key to successful project completion.Now we also have something called Hybrid analyst who has IT exp. as well as Domain exp.
Different companies percieve Business analyst differently.And its better to have an analyst with specific domain knowledge if the project involve complexity.So I think it does makes sense to categorise them.