DEPARTMENT OF TECHNICAL EDUCATION

ANDHRA PRADESH
Name : P. Samba Murthy, HCCP
Designation : Head of Department
Branch :D.C.C.P.
Institute : SRRS Govt. Polytechnic,
Sircilla
Semester : V - Semester
Subject : Banking – I
Subject Code : CCP – 504 (B)
Topic : Indian Banking Industry – Growth
Duration : 50 minutes
Sub-Topic : Features of Scheduled and Non
scheduled Banks
Teaching Aids : PPT
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OBJECTIVES:

On completion of this period, you would be

able to understand:
 the features of scheduled and non-scheduled
banks

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Recap

RBI empowered to include bank name in 2nd

schedule based on conditions.

There are 3 to 4 non- scheduled banks in India

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 Commercial banks

Non- scheduled
Scheduled bank
banks

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Classification of commercial banks
 The classification of commercial banks into
scheduled and non-scheduled introduced at
inauguration of the Reserve Bank of India in
1935.

 The object was contact between the Reserve

Bank and commercial banks with sound
financial position.

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Public sector banks
evolution

 First of all imperial Bank of India was nationalized

and renamed as State Bank of India in 1955

 Later, eight former state associated banks were

reconstituted into seven subsidiary banks of the
State Bank of India. These called associates of the
State Bank of India

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Public sector banks evolution (Contd..)

 On July 19, 1969, 14 major commercial banks

nationalized. Again on April 15, 1980, 6 more
commercial banks were nationalized.

 Another important development in public sector

establishment of Regional Rural Banks in 1974.
At present, their number is 196.

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Features of scheduled bank’s

 All commercial bank (public sector bank) offer bills

of exchange for re discounting privilege of schedule
bank no need statutory reserve

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Scheduled banks features

a. Scheduled commercial banks – include public

sector banks, private sector banks and foreign
banks.

c. Scheduled banks – include co-operative banks

along with commercial banks

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Scheduled banks features
a. Public sector banks –include only banks
associated with Government .
b. Scheduled banks should abide by all the rules
and regulations.
c. The operations of scheduled banks controlled
and regulated by Reserve Bank eligible for
rediscounting facilities.
d. Scheduled banks avail of the facilities
refinance from RBI.

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Scheduled banks features

a. Guarantees issued by schedule bank are

acceptable to government and quasi
government bodies.
b. Covered by the Deposit Insurance Scheme
and the Credit Guarantee Scheme.

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Scheduled banks features

 From March, 1966, State Co-operative banks any

eligible to become scheduled banks.
 Later Urban Co-operative banks are also made
eligible.
 The scheduled commercial banks at present
account for virtually the entire banking business in
the country.

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Scheduled banks features

 Share of public sector scheduled banks (including

RRBs) in total banking business has increased, but
private sector banks has declined.

 This share of the public sector banks is now more

than 90%.

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SUMMARY:
 Two type commercial banks
a. scheduled
b. Non-scheduled
 Schedule get certain privileges from RBI.

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Frequently asked questions
 In how many groups commercial banks were divided
and what are they?

 What are the privileges and facilities the scheduled

banks possess.

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QUIZ
1) The classification of commercial banks into
scheduled and non-scheduled was introduced in
the year:
 1935
 1953
 1964
 1980

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QUIZ

1) Imperial Bank of India was nationalized and

renamed as:

 Oriental Bank of Commerce

 State Bank of India
 State Bank of Hyderabad
 Karur Vysya Bank

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QUIZ

3. The operations of scheduled banks are controlled

and regulated by

a) Reserve Bank
b) Imperial Bank
c) State Bank of India
d) Foreign Banks

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Frequently asked questions

a) Discuss the salient feature of scheduled banks?

d) Write the privileges of schedule banks enjoy with RBI.

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