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    Scheduled bank

    Meaning of Scheduled Bank

    • The banks in the Indian banking system are sub categorized as Scheduled Banks, Non-Schedule Banks, Private Banks and Public Banks. Scheduled banks are those banks that are listed under Schedule II of the Reserve Bank of India Act, 1934.
    • The bank's paid-up capital and raised funds must be at least Rs. 5 lakh to qualify as a scheduled bank. These banks are liable for low interest loans from the RBI.
    • They also have membership in clearing houses.
    • They also have numerous obligations to fulfil such as maintaining an average daily Cash Reserve Ratio with the central bank.

    Types of Scheduled Banks in India

    • The banks listed in Schedule II are further classified as –
    • Scheduled Commercial Public Sector Banks
    • SBI and its associates
    • Scheduled Commercial Private Sector Banks
    • Old Private Banks
    • New Private Sector Banks
    • Scheduled Foreign Banks in India

    Main functions of these banks

    Given below is a list of the most important functions of these Scheduled Banks - - Acceptance of deposits from the public - Provide demand withdrawal facility - Lending facility - Transfer of funds - Issue of drafts - Provide customers with locker facilities - Dealing with foreign exchange

    Differences Between a Scheduled Bank and Non-Scheduled Bank

    Scheduled Bank

    • They are listed in the second schedule of the RBI Act.
    • These have a paid up capital of Rs. 5 lakhs or more and comply with all the requirements of the RBI.
    • They maintain a cash reserve ratio with RBI.
    • They are authorized to borrow funds from the Reserve Bank of India.
    • They are comparatively more financially stable.

    Non-Scheduled Bank

    • They are not listed in the second schedule of the RBI Act.
    • There is no such condition that needs to be fulfilled for it to be considered a non-scheduled bank.
    • They maintain the CRR amount with themselves.
    • They are not allowed to.
    • These banks are riskier.

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