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Banking system in India

Types of Bank in India 

  1. Scheduled Banks: these are banks that are listed in the Second Schedule of RBI Act, 1934
  2. Non-Scheduled Banks: these are banks which are not listed in the Second Schedule of RBI Act, 1934

Scheduled Banks include Scheduled Commercial Banks & Scheduled Cooperative Banks

  • Scheduled Commercial Banks include 
  1. Public Sector Banks
  2. Foreign Banks 
  3. Private Banks
  4. RRBs 
  • Scheduled Cooperative Banks includes certain Urban Cooperative & State Cooperative Banks

Non-Scheduled Banks includes certain Urban Cooperative Banks

Difference between Scheduled Banks & Non- Scheduled Banks 

  1. Scheduled Banks are listed in the 2nd Schedule of the RBI Act, 1934 while Non-Scheduled Banks are not listed in the 2nd Schedule of the RBI Act, 1934
  2. CRR is maintained with the RBI in case of  Scheduled Banks while Non-Scheduled Banks maintain CRR with themselves.
  3. Scheduled banks are allowed to borrow money from RBI for regular banking purpose, not the case with non-Scheduled banks.
  4. Scheduled banks have to submit periodical returns, not such periodic compulsion for Non-Scheduled Banks.
  5.  Scheduled banks can become member of clearing house while Non-Scheduled banks can’t.

 

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