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What are scheduled banks and non scheduled banks?

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8 months ago

Scheduled Banks in India refer to those banks which have been included in the Second Schedule of Reserve Bank of India Act, 1934. RBI in turn includes only those banks in this Schedule which satisfy the criteria laid down vide section 42(6)(a) of the said Act. Banks not under this Schedule are called Non-Scheduled Banks

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Abigail Ghoshal answered.
8 months ago

Scheduled Bank refers to the banks which have been included in the Second Schedule of Reserve Bank of India Act (RBI), 1934. These banks are eligible to avail loans at the bank rate from RBI and automatically acquire the membership of the clearinghouse. The schedule bank comprises of all Commercial banks such as Nationalized Banks, foreign banks, development banks, cooperative regional and rural banks and maintains Cash Reserve Ratio (CRR) with RBI. Scheduled banks have to submit their returns annually as per the regulations of RBI.

On the other extreme, non-scheduled banks are the banks that do not adhere to the norms prescribed by the Reserve Bank of India (RBI). These banks have to maintain their CRR themselves. These banks are also not allowed to borrow money from RBI for their regular banking purposes. These banks do not have any return filing requirements. These are the banks that are generally run by private players with their own resources.