Commercial banks are classified into the scheduled and non-scheduled bank. The scheduled banks are sub-grouped into:
- Nationalized scheduled commercial banks
- Foreign banks
- Other non-nationalized scheduled banks
- It must have a paid up capital and reserves for an aggregate value of at least Rs. 5,00,000.
- It must satisfy the RBI, that its affairs are not conducted in a manner detrimental to the interest of its depositors; and
- It must be a corporation and not a partnership or a single owner firm.
Scheduled banks enjoy certain privileges such as free/concessional remittance facilities through the offices of the RBI and its agents and borrowing facilities from the RBI. In return, the scheduled are under obligation to:
- maintain an average daily balance of cash reserves with the RBI at rates stipulated by it; and
- submit periodical returns to the RBI under various provisions of Reserve Bank of India Act, 1934 and the Banking Regulation Act 1949 (as amended from time to time).