We study the design of filter banks for signals defined on the nodes of graphs. We propose novel two channel filter banks, that can be applied to arbitrary graphs, given a positive semi definite variation operator, while using downsampling operators on arbitrary vertex partitions. The proposed filter banks also satisfy several desirable properties, including perfect reconstruction, and critical sampling, while having efficient implementations. Our results generalize previous approaches only valid for the normalized Laplacian of bipartite graphs. We consider graph Fourier transforms (GFTs) given by the generalized eigenvectors of the variation operator. This GFT basis is orthogonal in an alternative inner product space, which depends on the choices of downsampling sets and variation operators. We show that the spectral folding property of the normalized Laplacian of bipartite graphs, at the core of bipartite filter bank theory, can be generalized for the proposed GFT if the inner product matrix is chosen properly. We give a probabilistic interpretation to the proposed filter banks using Gaussian graphical models. We also study orthogonality properties of tree structured filter banks, and propose a vertex partition algorithm for downsampling. We show that the proposed filter banks can be implemented efficiently on 3D point clouds, with hundreds of thousands of points (nodes), while also improving the color signal representation quality over competing state of the art approaches.