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Major Differences Between Scheduled and Non-Scheduled Banks
Major Differences Between Scheduled and Non-Scheduled Banks
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The term "Scheduled Banks" refers to banks that are listed in the Reserve Bank of India Act of 1934's "Second Schedule." In turn, the Reserve Bank of India (RBI) only includes banks in this Schedule that meet the requirements outlined in section 42(6)(a) of the aforementioned Act. There are two types of primary facilities available to every scheduled bank: It becomes eligible for the RBI's bank rate debts and loans. Additionally, it automatically joins the clearing house.
Non-Scheduled banks are those that are not subject to the RBI's regulations and fall outside the scope of this Schedule. They are not mentioned in the RBI Act of 1934's second schedule. Additionally, they must meet the requirement for a cash reserve with their own funds, not the RBI's. They tend to be smaller, cover a narrow range, and have additional financial constraints.
