Scheduled Banks in India: Functions, Benefits, and Future Perspectives

Scheduled banks in India are specifically recognized by the Reserve Bank of India and offer a secure and regulated financial environment. With numerous institutions in the Indian banking industry, scheduled banks provide stability and consumer protection. Whether you are an experienced investor or new to banking, these banks are a reliable choice for your financial needs in India. 

What are Indian Scheduled Banks?

The RBI has specific criteria outlined in the RBI Act of 1934 and the Banking Regulation Act of 1949 that determine which financial institutions are granted scheduled bank status. These scheduled banks are listed in Schedule II of the Reserve Bank of India Act of 1934 and represent the majority of banks under the central bank’s jurisdiction. Meeting the requirement of having paid-up capital and raised funds of at least 5 lakh rupees is a key factor for obtaining this status.

As clearing house members, Scheduled banks should maintain an average daily cash reserve ratio with the central bank. This ensures the stability and liquidity of the banking system while allowing scheduled banks to meet their financial obligations and operate effectively within the established regulatory framework.

Scheduled banks in India are allowed by the Reserve Bank of India to provide loans at bank rates. In addition, the RBI has set forth management standards in its directions for 2015. These standards cover various aspects such as appointing the CEO and other senior management staff, ensuring sufficient capital adequacy, maintaining asset quality and focusing on profitability. 

Types of Scheduled Banks in India in 2024

Scheduled banks are commercial banks regulated by the RBI and included in the Second Schedule of the Reserve Bank of India Act, 1934. They are classified into the following categories - 

• Scheduled Commercial Public Sector Banks
• SBI and its associates
• Scheduled Commercial Private Sector Banks
• Old Private Banks 
• New Private Sector Banks
• Scheduled Foreign Banks 

List of Scheduled Banks as Per RBI in India in 2024

According to the latest list released by the Reserve Bank of India (RBI), here is the list of scheduled banks operating in India in 2024 - 

Category	Name of the Bank
Scheduled Public Sector Banks	Bank of Baroda
	Bank of India
	Bank of Maharashtra
	Canara Bank
	Central Bank of India
	Indian Bank
	Indian Overseas Bank
	Punjab & Sind Bank
	Punjab National Bank
	State Bank of India
	UCO Bank
	Union Bank of India
Scheduled Private Sector Banks `	Axis Bank Ltd.
	Bandhan Bank Ltd.
	CSB Bank Ltd.
	City Union Bank Ltd.
	DCB Bank Ltd.
	Dhanlaxmi Bank Ltd.
	Federal Bank Ltd.
	HDFC Bank Ltd.
	ICICI Bank Ltd.
	IDBI Bank Ltd.
	IDFC First Bank Ltd.
	Induslnd Bank Ltd.
	Jammu & Kashmir Bank Ltd.
	Karnataka Bank Ltd.
	Karur Vysya Bank Ltd.
	Kotak Mahindra Bank Ltd.
	Nainital Bank Ltd.
	RBL Bank Ltd.
	South Indian Bank Ltd.
	Tamilnad Mercantile Bank Ltd.
	YES Bank Ltd.
Scheduled Small Finance Banks	Capital Small Finance Bank Limited
	ESAF Small Finance Bank Limited
	Fincare Small Finance Bank Limited
	Equitas Small Finance Bank Limited
	Jana Small Finance Bank Limited
	North East Small Finance Bank Limited
	Shivalik Small Finance Bank Limited
	Suryoday Small Finance Bank Limited
	Au Small Finance Bank Limited
	Ujjivan Small Finance Bank Limited
	Unity Small Finance Bank Limited
	Utkarsh Small Finance Bank Limited
Scheduled Payments Banks	Airtel Payments Bank Limited
	Fino Payments Bank Limited
	India Post Payments Bank Limited
	Paytm Payments Bank Limited
Scheduled Regional Rural Banks	Andhra Pradesh Grameena Vikas Bank
	Andhra Pragathi Grameena Bank
	Arunachal Pradesh Rural Bank
	Aryavart Bank
	Assam Gramin Vikash Bank
	Bangiya Gramin Vikas Bank
	Baroda Gujarat Gramin Bank
	Baroda Rajasthan Kshetriya Gramin Bank
	Baroda UP Bank
	Chaitanya Godavari Grameena Bank
	Chhattisgarh Rajya Gramin Bank
	Dakshin Bihar Gramin Bank
	Ellaquai Dehati Bank
	Himachal Pradesh Gramin Bank
	J&K Grameen Bank
	Jharkhand Rajya Gramin Bank
	Karnataka Gramin Bank
	Karnataka Vikas Grameena Bank
	Kerala Gramin Bank
	Madhya Pradesh Gramin Bank
	Madhyanchal Gramin Bank
	Maharashtra Gramin Bank
	Manipur Rural Bank
	Meghalaya Rural Bank
	Mizoram Rural Bank
	Nagaland Rural Bank
	Odisha Gramya Bank
	Paschim Banga Gramin Bank
	Prathama UP Gramin Bank
	Puduvai Bharathiar Grama Bank
	Punjab Gramin Bank
	Rajasthan Marudhara Gramin Bank
	Saptagiri Grameena Bank
	Sarva Haryana Gramin Bank
	Saurashtra Gramin Bank
	Tamil Nadu Grama Bank
	Telangana Grameena Bank
	Tripura Gramin Bank
	Utkal Grameen bank
	Uttar Bihar Gramin Bank
	Uttarakhand Gramin Bank
	Uttarbanga Kshetriya Gramin Bank
	Vidharbha Konkan Gramin Bank
Scheduled Foreign Banks (in India)	AB Bank Ltd.
	American Express Banking Corporation
	Australia and New Zealand Banking Group Ltd.
	Barclays Bank Plc.
	Bank of America
	Bank of Bahrain & Kuwait BSC
	Bank of Ceylon
	Bank of China
	Bank of Nova Scotia
	BNP Paribas
	Citibank N.A.
	Cooperatieve Rabobank U.A.
	Credit Agricole Corporate & Investment Bank
	Credit Suisse A.G
	CTBC Bank Co., Ltd.
	DBS Bank India Limited
	Deutsche Bank
	Doha Bank Q.P.S.C
	Emirates Bank NBD
	First Abu Dhabi Bank PJSC
	FirstRand Bank Ltd
	HSBC Ltd
	Industrial & Commercial Bank of China Ltd.
	Industrial Bank of Korea
	J.P. Morgan Chase Bank N.A.
	JSC VTB Bank
	KEB Hana Bank
	Kookmin Bank
	Krung Thai Bank Public Co. Ltd.
	Mashreq Bank PSC
	Mizuho Bank Ltd.
	MUFG Bank, Ltd.
	NatWest Markets Plc
	NongHyup Bank
	PT Bank Maybank Indonesia TBK
	Qatar National Bank (Q.P.S.C.)
	Sberbank
	SBM Bank (India) Limited
	Shinhan Bank
	Societe Generale
	Sonali Bank PLC
	Standard Chartered Bank
	Sumitomo Mitsui Banking Corporation
	United Overseas Bank Ltd
	Woori Bank

 

 

What Functions Do Scheduled Banks in India Perform?

Here are all the key functions that scheduled banks in India perform - 

• Accepting deposits from the public
• Introducing a demand withdrawal lending facility
• Funds transfer and issuance of drafts
• Providing customers with locker facilities is essential for ensuring their convenience and security
• After the Government of India allowed their establishment, private banks dealing with foreign exchange were set up in India in the 1990s. Previously, the public sector banks were the main players in this field 

What are the Benefits of Banking with a Scheduled Bank?

In the modern world, selecting the best bank is essential for efficient financial management. Among the numerous banking options available, scheduled banks are recognized for their security and dependability. Their distinct advantage makes them an appealing choice for safeguarding and managing your funds. 

• Stability of Scheduled Banks

Scheduled banks in India are subject to strict regulations from the Reserve Bank of India, the country’s central bank. These regulations ensure that these banks maintain a strong financial position by setting minimum capital requirements. As a result, customers can have confidence in the safety of their deposit

• Access to Exclusive Credit Facilities

Scheduled banks offer a significant advantage of being eligible to borrow funds from the RBI at preferential rates. This allows them to provide customers with a wider range of loan products at competitive interest rates. Whether it is a business loan, a home loan or a personal loan, scheduled banks are likely to offer attractive options to you achieve your financial goals. 

• The Power of Clearing House Membership

Scheduled banks hold an esteemed membership in clearing houses, a crucial network that enables the seamless and efficient settlement of interbank transactions. This membership guarantees swifter clearance times for your cheques and electronic fund transfers, effectively saving you precious time and eliminating any frustration you may have

• A Full Spectrum of Banking Services

Scheduled banks provide more than just deposit protection. They provide a wide range of banking services, including debit and credit cards, internet banking and mobile banking. This convenient approach makes it easier to handle your finances, as you can perform transactions and access account details through multiple platforms

• Trustworthy and Reliable Banking

Scheduled banks in India have a strong and trusted history in the banking system, maintaining transparency and trust through their compliance with RBI regulations. Customers can have faith in their dealings with these banks, as they prioritize ethics and customer satisfaction

Essential Banking Services Offered by Indian Scheduled Banks

Scheduled banks offer a diverse array of services to cater to the financial needs of their customers. These include deposit accounts, credit facilities, payment services, foreign exchange services, investment services, safe deposit boxes and various other financial products. This wide range of offerings makes scheduled banks a one-stop destination for various financial requirements. 

How Does the Future Look for Scheduled Banks in India?

Scheduled banks play a crucial role in the Indian economy but they are now facing significant challenges that are reshaping the banking landscape.

1. The Rise of Digital Banking: Digital banking is undeniably transforming the banking sector, with scheduled banks now offering strong online and mobile banking platforms. A significant number of transactions at leading banks like the State Bank of India already occur through digital channels, a trend that is expected to keep growing
2. Government Initiatives: The government is making efforts to promote digital payments and financial inclusion with initiatives such as the Unified Payments Interface (UPI) and Bharat Bill Payment System (BPSS) contributing to a cashless ecosystem. This is in line with the digital wave that India is currently witnessing
3. Privatization and Consolidation: The potential for increased privatization of public sector banks is a significant shift in the banking sector. With the recent budget proposal to privatize two banks, there is a strong indication towards creating a more competitive landscape. This, along with consolidation among existing players, has the potential to result in fewer but stronger banks
4. Collaboration is Key: Collaboration with fintech companies is crucial for scheduled banks to innovate and adapt to the future. By leveraging advances in artificial intelligence, machine learning and data analytics, banks can revolutionize areas such as customer service, fraud detection and risk management. This partnership between traditional banks and fintech first will drive positive change in the industry 
5. The Human Touch Endures: Traditionally, banks have focused on providing personalized services and building strong customer relationships. As digitalization becomes increasingly important, banks must find ways to incorporate technology without losing the human touch. This balance is crucial for maintaining customer satisfaction and loyalty while also improving operational efficiency
6. Navigating the Unknown: The future is indeed uncertain, especially when it comes to cybersecurity threats and the constantly changing regulatory landscape. Scheduled banks need to be ready to face these challenges head-on to ensure the security and stability of their operations. They must stay vigilant and adapt to the evolving environment to protect themselves and their customers

Frequently Asked Questions (FAQs)

 

Q: What are scheduled banks in India?

A: Scheduled banks in India are commercial banks that are carefully assessed by the Reserve Bank of India (RBI) before being included in the prestigious second schedule. To be eligible, these banks must meet the RBI’s criteria on capital adequacy, profitability and adherence to banking regulations. 

Q: How do I choose the right scheduled bank in India?

A: Choose the right bank based on your financial needs and goals. Consider the following factors:

• Types of accounts offered
• Interest rates
• Charges
• Branch network and online banking
• Customer service reputation

Q: How safe are my funds in a scheduled bank in India?

A: Scheduled banks in India provide a high level of security for your deposit, with the RBI ensuring deposit insurance coverage up to a specific limit per account holder in case of bank failure. Moreover, they implement strong security measures to protect your financial information and transactions. 

Q: What are the differences between scheduled and non-scheduled banks?

A: The main difference between scheduled and non-scheduled banks is the level of regulation and oversight. Scheduled banks are closely monitored by the RBI, following strict financial guidelines and maintaining capital adequacy, while non-scheduled banks operate with less stringent regulations, posing higher risks for depositing funds. Scheduled banks also offer a wider range of financial products and services compared to non-scheduled banks.

Q: Can I open an account online with a scheduled bank in India?

A: Yes, several banks in India provide the option for online account opening. This usually entails submitting digital versions of KYC documents and undergoing electronic identity verification. However, the specific prerequisites and eligibility criteria can differ among banks. 

Q: What are some of the challenges faced by the scheduled banks in India?

A: Indian scheduled banks face numerous challenges due to the dynamic financial landscape such as:

• High Non-Performing Assets (NPAs)
• Cybersecurity Threats
• Financial Inclusion

 

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