Carrers in Banking Finance and Insurance - Scheduled Banks Non Scheduled Banks- SBNSB

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Your Ad Here	Scheduled Banks Non Scheduled Banks - Another classification of banks which is in common usage is that of scheduled banks and non-scheduled banks which came into existence with the coming into force of the Reserve Bank of India Act. Let us find what do these two terms connote. Scheduled banks are the banks which are included in the Second Schedule to the Reserve Bank of India Act and may be broadly compared to the member banks in the United States of America. According to Section 42(6)(a) of the Act a bank must meet the following conditions to qualify for inclusion in the Second Schedule:
(i) The bank must have a paid-up capital and reserves of an aggregate value of not less than Rs. 5 lakhs, (ii) It must satisfy the Reserve Bank that its affairs are not being conducted in a manner detrimental to the interests of its depositors and (iii) It must be a company as defined in the Companies Act 1956, or a State Cooperative bank or an institution notified by the Central Government in this behalf or a corporation or a company incorporated by or under any law in force in any place outside India. By an amendment of the Act, the State Cooperative banks became eligible for inclusion in the Second Schedule from March 1966. Every Regional Rural Bank which is established under the Regional Rural Banks Act is included in the Second Schedule from the date of its establishment on its being notified by the Central Government in pursuance of sub-clause (iii) of Section 42(6)(a).
The status of scheduled bank confers on banks certain advantages, especially the facility of obtaining accommodation in the from of refinance and loans and advances from the Reserve Bank and of being considered for grant of authorised dealer's licence to handle foreign exchange business (for which other conditions have also to be fulfilled). Correspondingly, they bear certain obligations towards the Reserve Bank such as maintenance of cash reserves and submission of fortnightly returns prescribed from time to time under Section 42 of the Reserve Bank of India Act, 1934. The Reserve Bank is empowered to exclude from the Schedule any bank the aggregate value of whose paid-up capital and reserves falls below Rs. 5 lakhs, or which goes into liquidation or otherwise ceases to transact banking business. Non-Scheduled banks are banking companies other than those included in the Second Schedule to the Reserve Bank of India Act.	Your Ad Here

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