Scheduled Banks (India): A Comprehensive Guide to Banking in India

In India, a Scheduled Bank is a bank that has been designated by the Reserve Bank of India (RBI) as a bank that meets certain criteria.

These criteria include having a minimum paid-up capital and reserve share of not less than Rs. 5 crores, and being a bank that is owned and controlled by Indians.

Scheduled Banks in India are required to maintain a minimum reserve requirement of 5% of their deposits with the RBI.

They are also expected to meet certain prudential norms and guidelines set by the RBI to ensure the stability and soundness of the banking system.

Scheduled banks in India are a crucial part of the country's banking system, and understanding what they are and how they work is essential for anyone looking to manage their finances effectively.

Scheduled banks are listed in the Second Schedule of the Reserve Bank of India (RBI) Act, 1934, and they have a minimum paid-up capital of Rs. Five Lakhs. This is a requirement set by the RBI to ensure that these banks are financially stable and can provide reliable services to their customers.

To be considered a scheduled bank, a bank must meet certain conditions laid down in the RBI Act, 1934, and the Banking Regulation Act, 1949. These conditions include the appointment of a CEO and other senior management personnel, maintenance of capital adequacy, asset quality, and profitability.

Scheduled banks are further divided into four categories: Public Sector Banks, Private Sector Banks, Regional Rural Banks, and Foreign Banks. As of 31 March 2020, there are 27 scheduled commercial banks in India, comprising 21 public sector banks, three private sector banks, and three foreign banks.

Scheduled banks have several advantages and privileges, including the power to borrow money at bank rates, a central bank's power to provide a refinancing facility, and membership in clearing houses. They also enjoy a higher level of financial security compared to non-scheduled banks.

Here are some of the key characteristics of scheduled banks:

Scheduled banks provide a wide range of services to their customers, including deposits, on-demand withdrawal, lending, fund transfer, release of drafts, lockers for clients, and handling foreign exchange.

Scheduled banks in India are recognized for their security and dependability. They offer a significant advantage of being eligible to borrow funds from the RBI at preferential rates.

This allows them to provide customers with a wider range of loan products at competitive interest rates. Whether it's a business loan, a home loan or a personal loan, scheduled banks are likely to offer attractive options to help you achieve your financial goals.

Scheduled banks hold an esteemed membership in clearing houses, which enables the seamless and efficient settlement of interbank transactions. This membership guarantees swifter clearance times for your cheques and electronic fund transfers, effectively saving you precious time and eliminating any frustration.

Scheduled banks provide a wide range of banking services, including debit and credit cards, internet banking, and mobile banking. This convenient approach makes it easier to handle your finances, as you can perform transactions and access account details through multiple platforms.

Here are some of the essential banking services offered by Indian scheduled banks:

Scheduled banks perform several key functions, including accepting deposits from the public, introducing a demand withdrawal lending facility, and providing customers with locker facilities for their convenience and security.

Scheduled banks in India can be categorized into two main types: commercial banks and co-operative banks.

Commercial banks are further divided into public sector banks and private sector banks. Public sector banks are owned and controlled by the government, while private sector banks are owned by private individuals or companies.

Co-operative banks, on the other hand, are owned and controlled by a group of people who share a common interest or goal. They are often formed to serve the financial needs of a specific community or region.

There are 12 public sector banks in India, where the government owns more than 50% of the stock, making it the major stakeholder.

The number of public sector banks has decreased from 27 through various mergers, resulting in a more streamlined banking system.

Some of the public sector banks have a long history, with Bank of Baroda being established as far back as 1908.

Bank of Baroda has a massive network of 8546 branches, while Bank of India has 5100 branches across the country.

State Bank of India has the largest number of branches with 22,210, making it one of the most widespread public sector banks.

The government's shareholding in public sector banks varies, with Bank of India having the highest government shareholding at 81.41%.

Here is a list of the public sector banks in India, along with their government shareholding and number of branches:

Private sector banks are a significant part of India's banking system, with 21 private sector banks offering a range of banking and financial services to their customers.

These banks have the highest level of private entity stake, with some of them being old private sector banks that came into existence before 1968, and others being new private sector banks that were incorporated after 1968.

Here are some key facts about private sector banks in India:

Foreign banks in India are a unique breed, with 45 global financial institutions operating in the country. These banks are subject to regulations from both their home country and India.

One of the key differences between foreign banks and domestic subsidiary banks is the amount of loans they can provide. Foreign banks have no such restrictions, allowing them to offer a higher volume of loans compared to their domestic counterparts.

Let's take a look at the list of foreign banks operating in India:

Small Finance banks are a type of scheduled bank that offers financial services to small businesses and individuals. They are licensed by the Reserve Bank of India and are required to meet certain capital and asset requirements.

There are 12 Scheduled Small Finance Banks in India, including Au Small Finance Bank Limited and Ujjivan Small Finance Bank Limited. These banks provide a range of financial services such as savings accounts, loans, and deposits.

Some of the benefits of Small Finance banks include their focus on serving the unbanked and underbanked population, as well as their efforts to promote financial inclusion. They also offer innovative products and services that cater to the needs of small businesses and individuals.

Here is a list of the 12 Scheduled Small Finance Banks in India:

Scheduled banks in India offer a diverse array of services to cater to the financial needs of their customers.

These services include deposit accounts, credit facilities, payment services, foreign exchange services, investment services, safe deposit boxes, and various other financial products.

You can open an account online with a scheduled bank in India, which usually entails submitting digital versions of KYC documents and undergoing electronic identity verification.

However, the specific prerequisites and eligibility criteria can differ among banks.

Scheduled banks in India are regulated by the Reserve Bank of India (RBI) and are required to maintain a cash reserve ratio of at least 90%.

Scheduled banks are listed in the second schedule, whereas non-scheduled banks are not mentioned in it. This is a key difference between the two types of banks.

Scheduled banks can borrow from the RBI, but non-scheduled banks can only borrow in emergency situations. This is a significant advantage for scheduled banks.

Scheduled banks are further divided into four categories: public sector banks, private sector banks, regional rural banks, and foreign banks.

Here are some key differences between scheduled and non-scheduled banks in India:

Scheduled banks have a lower risk for depositors as they are financially stable and do not hurt customers' rights.

As of 31 March 2020, there are 27 scheduled commercial banks in India. These banks are carefully assessed by the Reserve Bank of India (RBI) before being included in the prestigious second schedule.

To be eligible, these banks must meet the RBI's criteria on capital adequacy, profitability, and adherence to banking regulations. This includes having a minimum paid-up capital of Rs. Five Lakhs.

Scheduled banks in India encompass a wide range of financial institutions, including nationalized, cooperative, international, and regional rural banks. The RBI has granted scheduled bank status to a bank only if it fulfils certain conditions laid down in the RBI Act, 1934, and the Banking Regulation Act, 1949.

Here is a list of the categories of Scheduled Commercial Banks:

Scheduled banks enjoy a number of advantages and privileges, including a central bank's power to provide a refinancing facility.

Scheduled banks in India are commercial banks that meet the RBI's criteria on capital adequacy, profitability, and adherence to banking regulations.

To be eligible, these banks must be carefully assessed by the Reserve Bank of India (RBI) before being included in the prestigious second schedule.

The RBI's criteria are strict, but the benefits of being a scheduled bank are numerous, including increased credibility and trust among customers.

Scheduled banks in India play a crucial role in the country's financial system, providing a wide range of banking services to individuals and businesses.

The RBI's assessment process is thorough and ensures that only banks that meet the highest standards are included in the list of scheduled banks.

This means that customers can have confidence in the stability and security of their deposits with scheduled banks.

Here's the article section:

A scheduled bank is a type of bank that's listed under the Reserve Bank of India Act, 1934's second schedule. To be considered a scheduled bank, a bank must have a minimum paid-up capital of Rs 5 lakh.

Scheduled banks in India encompass a wide range of financial institutions, including nationalized, cooperative, international, and regional rural banks.

Scheduled banks provide a significant advantage of being eligible to borrow funds from the RBI at preferential rates. This allows them to provide customers with a wider range of loan products at competitive interest rates.

Scheduled banks in India have a strong and trusted history in the banking system, maintaining transparency and trust through their compliance with RBI regulations.

Here's a list of categories of scheduled commercial banks:

Scheduled banks are more financially secure in comparison to non-scheduled banks, and they have a number of advantages and privileges, including the central bank's power to provide a refinancing facility.

Scheduled banks in India face several challenges, including a high volume of non-performing assets.

The Reserve Bank of India's (RBI) guidelines on asset classification and provisioning are complex and difficult to navigate.

Many scheduled banks struggle to maintain adequate capital adequacy ratios, which can lead to a lack of lending capacity.

In 2020, the RBI introduced the Ind AS 109 standard for scheduled banks, which requires them to use the expected credit loss model for provisioning.

The Indian banking sector is highly regulated, which can limit the ability of scheduled banks to innovate and adapt to changing market conditions.

The RBI's guidelines on lending to small and medium-sized enterprises (SMEs) have been criticized for being overly restrictive.

In India, scheduled banks offer a wide range of services to cater to the financial needs of their customers. These services include deposit accounts, credit facilities, payment services, foreign exchange services, investment services, safe deposit boxes, and various other financial products.

Scheduled banks are a one-stop destination for various financial requirements. They offer a diverse array of services that make them a convenient option for customers.

Scheduled payment banks are a type of scheduled bank that offers limited services, including payment and remittance services. There are four scheduled payment banks in India: India Post Payments Bank Limited, Fino Payments Bank Limited, Paytm Payments Bank Limited, and Airtel Payments Bank Limited.

Scheduled commercial banks in India are regulated by the Reserve Bank of India (RBI). As of 31 March 2020, there are 27 scheduled commercial banks in India, comprising 21 public sector banks, three private sector banks, and three foreign banks.

To become a scheduled bank, an institution must meet certain conditions, including a minimum paid-up capital of Rs. Five Lakhs. The RBI has also prescribed norms for the management of scheduled banks, including the appointment of a CEO and other senior management personnel, maintenance of capital adequacy, asset quality, and profitability.