Companies Act Section 2(80) Scheduled Bank

Scheduled Bank Section 2 (80)

A Scheduled Bank refers to a bank that is listed in the Second Schedule of the Reserve Bank of India (RBI) Act, 1934. This schedule categorizes banks that are eligible to operate in India and includes both public sector banks and private sector banks that meet certain criteria set by the Reserve Bank of India.

Key Criteria for Scheduled Banks:

1. Regulatory Compliance: 

Scheduled Banks must comply with the regulatory requirements set by the Reserve Bank of India, including capital adequacy norms, liquidity requirements, and reporting standards.

2. Incorporation: 

Scheduled Banks are typically incorporated under the Banking Regulation Act, 1949, or are foreign banks operating in India under specific regulatory approvals.

3. Services: 

Scheduled Banks are authorized to offer a wide range of banking services to the public, including accepting deposits, providing loans, issuing credit cards, facilitating foreign exchange transactions, and offering other financial services.

4. RBI Oversight: 

These banks are subject to regular supervision and oversight by the Reserve Bank of India to ensure financial stability, customer protection, and compliance with banking laws and regulations.

Importance:

Public Trust: 

Being listed as a Scheduled Bank signifies credibility and reliability in the banking sector, thereby enhancing public trust and confidence in their financial services.  

Regulatory Compliance: 

Scheduled Banks play a crucial role in the Indian economy by facilitating financial intermediation, credit creation, and economic growth while adhering to regulatory standards.

Systemic Importance: 

Scheduled Banks form a critical part of the country's financial system, contributing to overall economic stability and development.