INTRODUCTION
A scheduled bank is a bank that is listed in the Second Schedule of the Reserve Bank of India Act, 1934. This list contains the names of banks that are eligible for the maintenance of Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) with the Reserve Bank of India (RBI). These banks are also regulated under the Banking Regulation Act, 1949. In simpler terms, a scheduled bank is a bank that has been authorized by the RBI to conduct banking activities in India.
Scheduled banks can be further categorized into two types – commercial banks and cooperative banks. Commercial banks are banks that are set up with the main objective of making a profit. They accept deposits, provide loans, and offer other banking services to their customers. Examples of commercial banks in India include State Bank of India, HDFC Bank, and ICICI Bank. Cooperative banks, on the other hand, are banks that are set up to provide banking services to a particular group of people, such as farmers or small-scale industries. They are registered under the Cooperative Societies Act, 1912. Examples of cooperative banks in India include Saraswat Cooperative Bank and Punjab and Maharashtra Cooperative Bank.
Scheduled banks play a crucial role in the economy of India. They are the primary source of credit to individuals, businesses, and the government. They mobilize savings from the public and provide loans to those who need them. Scheduled banks also facilitate international trade by providing services such as letters of credit and foreign exchange. They are also responsible for implementing the monetary policy of the RBI by adjusting interest rates and credit availability in the economy.
Scheduled banks also provide a range of services to their customers, such as ATM facilities, online banking, and mobile banking. They offer various types of accounts such as savings accounts, current accounts, and fixed deposit accounts. They also provide loans for various purposes, such as home loans, personal loans, and business loans.
Another important function of scheduled banks is to promote financial inclusion. They provide banking services to underserved and unbanked segments of the population, such as those living in rural areas. This helps to promote economic growth and reduce poverty by providing access to credit and other financial services.
Summary
Scheduled banks play a critical role in the economy by mobilizing savings, providing credit, facilitating international trade, and promoting financial inclusion. They are subject to strict regulations to ensure their safety and soundness, which makes them a reliable choice for banking services.
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Frequently Asked Questions (FAQs)
Q.What is a scheduled bank?
A scheduled bank is a bank that is authorized by the Reserve Bank of India to conduct banking activities in India. These banks are listed in the Second Schedule of the Reserve Bank of India Act, 1934, and are subject to the regulations of the RBI.
Q.What are the types of scheduled banks?
Scheduled banks can be classified into two categories – commercial banks and cooperative banks. Commercial banks are set up with the primary objective of making a profit, while cooperative banks are established to provide banking services to a particular group of people, such as farmers or small-scale industries.
Q.What services do scheduled banks provide?
Scheduled banks offer a range of banking services to their customers, such as deposits, loans, foreign exchange services, and ATM facilities. They also provide online and mobile banking services, making it easier for customers to access their accounts and carry out transactions.
Q.What is the role of scheduled banks in the economy?
Scheduled banks play a crucial role in the economy by mobilizing savings, providing credit to individuals and businesses, facilitating international trade, and promoting financial inclusion. They also implement the monetary policy of the RBI by adjusting interest rates and credit availability in the economy.
Q.Are scheduled banks safe?
Scheduled banks are subject to strict regulations by the RBI to ensure their safety and soundness. They are required to maintain a minimum level of paid-up capital and meet other regulatory requirements. The RBI also monitors their financial health regularly and takes corrective action if necessary to ensure their stability.
Q.Can anyone open an account with a scheduled bank?
Yes, anyone can open an account with a scheduled bank, provided they meet the bank’s eligibility criteria. The account opening process typically involves providing identity and address proof and completing the necessary documentation.
Q.How do I choose a scheduled bank?
When choosing a scheduled bank, consider factors such as the bank’s reputation, financial strength, fees and charges, and the range of services offered. You can also compare the interest rates offered on deposits and loans to choose the best option for your needs.
