The Banking structure in India can be broadly segmented into 3 parts viz., Central Bank, Scheduled Banks & Non Scheduled Banks. Let us decode each one of these terms so that you may have a thorough understanding of each of these terms which will you help you in exams like SBI PO, SBI Clerk, RBI Assistant, IBPS and various other Banking and Insurance exams.

reserve Bank of India

The RBI is the Central Bank of India, this is the apex body which regulates the functioning of all other banks in the country.It was started on  April 1st, 1935 in accordance with Reserve Bank of India Act, 1934. It controls the monetary policy and the value of the Indian Rupee. Its main function is to issue currency known as ‘Bank Notes’.

The aim of the Central Bank is not to earn profit, but to maintain price stability and to strive for economic development with all round growth of the country.

scheduled banks

All the banks that are listed in the second schedule of to the Reserve Bank of India Act, 1934 are scheduled banks. These banks comprise Scheduled Commercial Banks and Scheduled Cooperative Banks. These banks should fulfill the following obligations:

    • Paid up capital and collected funds should not be less than Rs.5 lacs.
    • Any activity of the Bank should not be detrimental or adversely affect the interests of the customers.
What are the perks of being a scheduled bank?

There are two main benefits that these banks enjoy:-
a) Eligibility for a loan from RBI at Bank Rate
b) Automatic membership into a clearing house

composition of scheduled banks

Schedules comprise of i) Commercial Banks, ii) Co operative Banks

Commercial Banks are any banking organization that deals with the deposits and loans of business organizations. Commercial banks issue bank checks and drafts, as well as accept money on term deposits. These institutions are run to make a profit and owned by a group of individuals.

Co operative Banks  are small sized banks operating in rural and urban areas. They also perform fundamental banking activities but they are different from commercial banks. They do not operate with a profit motive.

4 types of commercial banks
  • Public Sector Banks
  • Private Sector Banks
  • Foreign Banks
  • Regional Rural Banks
public sector banks

Banks in which the government has the majority stakes (51% or more) are called Public Sector Banks. These include

  • SBI and its  Associate Banks
  • 19 Nationalized Banks – Banks that were earlier private but were later brought under the control of govt.
  • 1 Other Public Sector Bank i.e. IDBI
sbi and its associates

State Bank of Bikaner and Jaipur (SBBJ) State Bank of Hyderabad (SBH), State Bank of Mysore (SBM), State Bank of Patiala (SBP) and State Bank of Travancore (SBT), besides Bharatiya Mahila Bank (BMB), merged with SBI with effect from April 1, 2017.


private sector banks

Private Banks are owned by private individuals/institutions. These are registered under the Companies Act 1956 as Limited Companies. They are further classified into:

New Private Sector Banks
    • HDFC Bank
    • ICICI Bank
    • AXIS Bank
    • Yes Bank
old Private Sector Banks
  • Karur Vysya Bank
  • IndusInd Bank

To read further about various Public and Private Sector Banks, Click here

Foreign banks

They are nothing but banks which are incorporated outside India but have operations in India. Example HSBC, Standard Chartered, JP Morgan, etc.

regional rural banks

Banks that are specially designed to cater to the credit needs of the rural and weaker sections of the society are called Regional Rural Banks. To know in about various heads and sponsors of RRBs click here.


Structure of Cooperative Banking in India

They are broadly divided in to Urban and Rural Cooperative Banks. But their classification can be done on 5 levels:

Primary Coop. Credit Society – Association of borrowers and non-borrowers. Funds of society are derived from members.
District Central Coop. Bank – Functions at District level only
State Coop. Bank – Apex Body the State Govt.
Land Development Bank – Long term loans to farmers. No deposits from public.
Urban Coop. Bank – general banking activities at State level.

non scheduled banks

Banks not under 2nd Schedule of the Reserve Bank of India Act, 1934 are called non-scheduled banks.

Non-scheduled banks are also subject to the statutory cash reserve requirement. But they are not required to keep them with the RBI; they may keep these balances with themselves. They are not entitled to borrow from the RBI for normal banking purposes, though they may approach the RBI for accommodation under abnormal circumstances.

There are 5 Non-Scheduled Urban Cooperative Banks in India

1 Akhand Anand Co-Operative Bank Ltd

2 Alavi Co-Op Bank Ltd

3 Amarnath Co-operative Bank Ltd

4 Amod Nagrik Sahakari Bank Ltd

5 Amreli Nagrik Sahakari Bank Ltd

Apart from the co op banks there are 4 other Local Area Banks, which complete the ambit of Non Scheduled Banks in India. They are:

1. Coastal Local Area Bank Ltd

2. Capital Local Area Bank Ltd

3. Krishna Bhima Samruddhi Local Area Bank Ltd

4. Subhadra Local Area Bank Ltd



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