Business

Difference Between Scheduled and Unscheduled Banks

Main difference

The main difference between scheduled banks and non-scheduled banks is that scheduled banks include all commercial banks such as nationalized, foreign, development, cooperative and regional rural banks and non-scheduled banks are the banks that do not adhere or join. adhere to prescribed standards. by the Reserve Bank or the Central Bank.

Scheduled vs. Unscheduled Banks

Banks that are enrolled or included in the central bank scheme called scheduled bank while non-scheduled banks are those banks that are not included in the central bank program. Listed banks are scheduled and under the full control of the central bank and unlisted banks are not scheduled or under the direct control of the central bank. Listed banks must deposit 18% with the central bank (12.5% ​​others and 5.5% in cash), and there is no obligation for unlisted banks. Listed banks get the privileges of the clearing facility and the new discount of a bill to the central bank, while unlisted banks do not get the facility.

Comparison chart

Scheduled Banks unregistered banks
Listed banks are a banking company whose minimum paid-up capital is a certain amount and does not harm the interests of depositors. Non-registered banks are banks that do not obey the rules specified by the reserve bank or say banks that do not belong to the category of registered banks.
Cash reserve ratio
Maintained with reserve bank. kept to themselves.
returns
To be sent periodically. There is no such provision to file periodic returns.
second schedule
Listed in the second schedule. Not included in the second program.
Loan
Registered banks are granted money to borrow from the reserve bank for normal banking purposes. Unregistered banks cannot borrow money from the reserve bank for normal banking purposes.
Members of the Clearing House
You can become a member of the clearing house. You cannot become a member of the clearinghouse.

What are programmed banks?

Scheduled banks are the banks that account in the second reserve bank box. Registered banks enjoy certain rights, such as the right to receive the apex bank refinancing facility, the right to the foreign exchange facility, and the right to become members of the clearing house. However, they are required to meet certain obligations, such as maintaining a standard daily CRR (cash reserve ratio) balance with the reserve bank or central bank at rates it sets. Add to that; These banks need to submit returns at regular intervals, to the central bank as long as the reserve bank or central bank rules and banking regulation. To modify as a programmed bank, the bank must meet the conditions that are:

  • The total minimum value of the paid-up capital and the reserve must be a
  • The bank is required to satisfy the central bank that its concerns are not carried out in a way that causes harm or detriment to the interests of depositors.
  • The bank is required to be a corporation rather than a sole proprietorship or associate.

What are unregistered banks?

Non-registered bank refers to banks that are not listed in the second reserve bank schedule. In better terms, banks that do not obey or accede to the provisions specified by the central bank, in the sense of reserve bank, or according to specific functions, etc. or according to the judgment of the reserve bank, they are unable to help and protect the precipitates or the interest of the depositors, they are known as unregistered banks. Non-registered banks are also required to maintain the cash reserve requirement, not with the reserve banks, but with themselves. These are the local area banks.

Types

  • cooperative banks
  • State cooperative banks
  • Central cooperative banks
  • Primary credit societies

Key differences

  1. A banking corporation whose paid-up capital is a specified amount and does not harm the interests of depositors called a scheduled bank. On the other hand, unregistered banks are the banks that are not competent to comply with the provision of the central bank.
  2. Scheduled banks are some others covered in the second Reserve Bank program, while non-scheduled banks are the banks that are not covered in the second Reserve Bank program.
  3. Registered banks are allowed to borrow money from the central bank for normal banking purposes. In contrast, unregistered banks are not allowed to borrow money from the central bank for normal banking purposes. However, in abnormal states, they can request accommodation from the central bank.
  4. Listed banks are free to become members of the clearing house, while unlisted banks do not.
  5. Scheduled banks must hold cash reserves with the reserve bank, at rates prescribed by the reserve bank. On the other hand, Non-Scheduled Bank is also required to keep cash reserves, but only for themselves.
  6. Scheduled banks must file or send periodic statements to the reserve bank. In contrast, there is no such need for regular filings with the central bank, in the case of non-registered banks.

Final Thought

Listed banks obtain allocations through the offices of the Central Bank or the Reserve Bank and their agents, free of charge or at favorable rates. On the other hand, borrow skills or facilities from the Central Bank in the presentation of records. Such facilities are not granted to non-registered banks.

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