Q.What is a scheduled bank? How does it differ from a non-scheduled bank?

A scheduled bank is one listed in the second schedule of the central bank's governing Act because it satisfies the prescribed conditions of capital and sound working.

Scheduled bank. A scheduled bank is a commercial bank that has been included in the second schedule of the Reserve Bank of India Act because it fulfils two conditions: it has the prescribed minimum paid-up capital and reserves, and it satisfies the central bank that its affairs are not conducted in a manner harmful to the interests of its depositors. Such a bank enjoys certain privileges — chiefly the right to borrow from the central bank and to avail of its clearing and remittance facilities — but in return it must keep the prescribed reserves with the central bank and submit to its supervision.

Difference from a non-scheduled bank:

A common slip is to say a scheduled bank is simply 'a big bank' — size is only a rough consequence; the real test is inclusion in the second sc …