Q. What is the best definition for a Scheduled Bank ?
Answer: A bank included in the Second Schedule of the RBI
Notes: Scheduled commercial banks are those which are included in the second schedule of the RBI Act 1934.These carry out the normal business of banking such as accepting deposits, giving out loans and other banking services.
As per the Second Schedule of the Banking Regulation Act of 1965 a bank must satisfy the following conditions, to get fully authorized to run banking business in India. The required two conditions are:
• The bank should have paid a reserve capital of 5 lakh rupees to the Reserve Bank of India and this capital must be maintained throughout their operational period
• The RBI must be satisfied that the banks affairs are not conducted in a manner that is harmful to the interest of its depositors
Those banks that abide by this regulation are called as Scheduled Banks