Scheduled Banks in India

Scheduled Banks in India

By Sreya Ray
SHARE

Scheduled Banks

Scheduled Banks are those banks whose names are included in the 2nd schedule of the Reserve Bank of India Act, 1934. The banks may be nationalised, private banks, regional rural banks or even foreign banks. The banks which do not feature in the list are termed as non-schedule banks. They can borrow from RBI and are also member of the Clearing houses.

Reserve Bank of India is empowered to include or exclude any Bank from the 2nd schedule through section 42(6) of Reserve Bank of India Act.

The criteria to be fulfilled by the Bank are

  • The Bank must be operating in India
  • The nature of transaction and procedures adopted by the bank are not detrimental to the interest of the customers dealing with the bank
  • The paid up capital must be at least Rs. 5 lakhs
  • 5 % of Demand Liabilities and 2% of Time Liabilities of the Bank has to be maintained with Reserve Bank of India
  • The Bank should not of partnership or single owner type

Advantages of scheduled banks over non scheduled banks

Schedule Banks enjoy certain privileges from the Reserve Bank of India and its agents like they can borrow money from RBI, they also enjoy remittances at concessional (even free ) charges.

Recommended Read :
SHARE
Sreya Ray
Sreya Ray is working as a Manager at State Bank of India. She is a voracious reader and a passionate writer. Her life is complete with her daughter and the support of her husband and the inspiration of her parents. Sreya loves multi-tasking and is a dreamer. If she don't create anything on a day,She feels that she had wasted my day.

RELATED ARTICLESMORE FROM AUTHOR

1 COMMENT

  1. The article was informative on giving details about scheduled banks. I feel it’s better to opt for a loan from a scheduled bank as you can be assured that the funds come from the right place. Lots of good to know information in this. It will be beneficial for someone who is looking to borrow or invest.

LEAVE A REPLY