Airtel Payments Bank has been categorised as Scheduled Bank

  • 07 Jan 2022

Airtel Payments Bank has been categorised as a scheduled bank by the Reserve Bank of India (RBI).

Meaning of Scheduled Bank

  • The banks in the Indian banking system are sub categorized as Scheduled Banks, Non-Schedule Banks, Private Banks and Public Banks.
  • Scheduled banks are those banks that are listed under Schedule II of the Reserve Bank of India Act, 1934.
  • The bank's paid-up capital and raised funds must be at least Rs. 5 lakh to qualify as a scheduled bank. These banks are liable for low interest loans from the RBI.
  • They also have membership in clearing houses.
  • They also have numerous obligations to fulfil such as maintaining an average daily Cash Reserve Ratio with the central bank.

Types of Scheduled Banks in India

  • The banks listed in Schedule II are further classified as –
  • Scheduled Commercial Public Sector Banks
  • SBI and its associates
  • Scheduled Commercial Private Sector Banks
  • Old Private Banks
  • New Private Sector Banks
  • Scheduled Foreign Banks in India

Main Functions of Scheduled Banks

  • Acceptance of deposits from the public
  • Provide demand withdrawal facility
  • Lending facility
  • Transfer of funds
  • Issue of drafts
  • Provide customers with locker facilities
  • Dealing with foreign exchange

Differences between a Scheduled Bank and Non-Scheduled Bank

Scheduled Bank

Non-Scheduled Bank

  • They are listed in the second schedule of the RBI Act.

  • They are not listed in the second schedule of the RBI Act.
  • These have a paid up capital of Rs. 5 lakhs or more and comply with all the requirements of the RBI.

  • There is no such condition that needs to be fulfilled for it to be considered a non-scheduled bank.

  • They maintain a cash reserve ratio with RBI.

  • They maintain the CRR amount with themselves.

  • They are authorized to borrow funds from the Reserve Bank of India.

  • They are not allowed to.

  • They are comparatively more financially stable.

  • They are volatile.