Scheduled Banks (India)

Scheduled Banks in India are those banks that are listed in the Second Schedule of the Reserve Bank of India Act, 1934. To be included in this schedule, banks must satisfy certain criteria specified by the Reserve Bank of India (RBI). The primary requirement is that the bank's paid-up capital and reserves must be no less than ₹5 lakh (Indian Rupees).

Scheduled banks are further categorized into:

• Scheduled Commercial Banks: These banks primarily deal in financing trade and commerce. They are further divided into:

  • Public Sector Banks: Banks where the government holds a majority stake.
  • Private Sector Banks: Banks where the majority stake is held by private individuals or companies. These can be further divided into old and new private sector banks based on their establishment dates.
  • Foreign Banks: Branches of banks established outside India, operating within the country.
  • Regional Rural Banks (RRBs): Banks established to cater to the credit needs of the rural population, particularly small and marginal farmers, agricultural laborers, and artisans.

• Scheduled Co-operative Banks: These banks are organized under the cooperative structure and primarily cater to the needs of the agricultural sector and small-scale industries. They are further divided into:

  • State Co-operative Banks (StCBs): These operate at the state level.
  • District Central Co-operative Banks (DCCBs): These operate at the district level.
  • Urban Co-operative Banks (UCBs): These operate in urban and semi-urban areas.

Being classified as a Scheduled Bank carries several implications and benefits. These banks are eligible to borrow funds from the RBI at the bank rate and are granted clearinghouse membership. They also have certain reporting requirements to the RBI and are subject to its regulatory oversight. The scheduled status signifies a certain level of financial stability and compliance, lending credibility to the institution.