Scheduled Banks in India are those banks that are included in the Second Schedule of the Reserve Bank of India Act, 1934. These banks are regulated by the Reserve Bank of India (RBI). A bank is included in this schedule only if it satisfies the conditions laid down under Section 42(6)(a) of the RBI Act. Banks that are not included in this schedule are known as Non-Scheduled Banks. Scheduled banks are considered financially stable and reliable because they operate under strict RBI regulations and supervision.
Scheduled banks enjoy important facilities from the RBI. They are eligible to receive loans and advances from the RBI at the official bank rate whenever required
Scheduled Banks in India are mainly divided into two categories:
| Main Categories of Scheduled Banks | Types |
|---|---|
| Scheduled Commercial Banks | Public Sector Banks, Private Sector Banks, Small Finance Banks, Regional Rural Banks (RRBs), Foreign Banks, Payments Banks |
| Scheduled Co-operative Banks | State Co-operative Banks, Urban Co-operative Banks |
Scheduled Commercial Banks
Scheduled Commercial Banks are the most important part of the Indian banking system. These banks provide services such as deposits, loans, internet banking, mobile banking, and investment services. They are further divided into different categories:
- Scheduled Public Sector Banks – These banks are mainly owned by the Government of India. Example: State Bank of India.
- Scheduled Private Sector Banks – These banks are owned by private individuals or institutions. Examples include HDFC Bank and ICICI Bank.
- Scheduled Small Finance Banks – These banks mainly provide banking services to farmers, small businesses, and low-income groups.
- Scheduled Regional Rural Banks (RRBs) – These banks focus on providing banking and credit facilities in rural areas.
- Foreign Banks – These are banks headquartered outside India but operating branches within India.
- Scheduled Payments Banks – These banks accept small deposits and provide payment and digital banking services but cannot provide large loans.
Scheduled Co-operative Banks
Scheduled Co-operative Banks operate on co-operative principles and mainly serve local communities. These banks are divided into two categories:
- Scheduled State Co-operative Banks – These banks operate at the state level and mainly support agricultural and rural credit.
- Scheduled Urban Co-operative Banks – These banks operate in urban and semi-urban areas and provide banking services to local people and businesses.
Importance of Scheduled Banks
Scheduled Banks form the backbone of India’s organized banking system. They help in mobilizing savings, providing loans, supporting businesses and industries, promoting rural development, and improving financial inclusion. Through their large branch networks and digital banking services, scheduled banks play a major role in India’s economic growth and financial stability.
Growth of Scheduled Commercial Banks in India (2005–2013)
| Indicators | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 |
|---|---|---|---|---|---|---|---|---|---|
| Number of Commercial Banks | 284 | 218 | 178 | 169 | 166 | 163 | 163 | 169 | 151 |
| Number of Branches | 70,373 | 72,072 | 74,653 | 78,787 | 82,897 | 88,203 | 94,019 | 102,377 | 109,811 |
| Population per Bank (in thousands) | 16 | 16 | 15 | 15 | 15 | 14 | 13 | 13 | 12 |
| Aggregate Deposits | ₹17,002 billion | ₹21,090 billion | ₹26,119 billion | ₹31,969 billion | ₹38,341 billion | ₹44,928 billion | ₹52,078 billion | ₹59,091 billion | ₹67,504.54 billion |
| Bank Credit | ₹11,004 billion | ₹15,071 billion | ₹19,312 billion | ₹23,619 billion | ₹27,755 billion | ₹32,448 billion | ₹39,421 billion | ₹46,119 billion | ₹52,605 billion |
| Deposit as % of GNP | 62% | 64% | 69% | 73% | 77% | 78% | 78% | 78% | 79% |
| Per Capita Deposit | ₹16,281 | ₹19,130 | ₹23,382 | ₹28,610 | ₹33,919 | ₹39,107 | ₹45,505 | ₹50,183 | ₹56,380 |
| Per Capita Credit | ₹10,752 | ₹13,869 | ₹17,541 | ₹21,218 | ₹24,617 | ₹28,431 | ₹34,187 | ₹38,874 | ₹44,028 |
| Credit-Deposit Ratio | 63% | 70% | 74% | 75% | 74% | 74% | 76% | 79% | 79% |
Analysis of Banking Growth
The table shows the strong growth of scheduled commercial banks in India between 2005 and 2013. During this period, the number of commercial banks declined from 284 to 151 because of mergers, restructuring, and consolidation in the banking sector. However, the number of bank branches increased significantly from 70,373 in 2005 to 109,811 in 2013, showing a major expansion of banking services across the country.
The population served by each bank branch also improved. In 2005, one bank branch served around 16,000 people, while by 2013 this number declined to 12,000, indicating better banking access and financial inclusion. Aggregate deposits increased sharply from ₹17,002 billion in 2005 to ₹67,504.54 billion in 2013, reflecting higher public savings and growing confidence in the banking system.
Similarly, bank credit expanded rapidly from ₹11,004 billion to ₹52,605 billion during the same period. This rise shows increased lending activities for businesses, industries, agriculture, and retail customers. Deposits as a percentage of Gross National Product (GNP) also increased from 62% to 79%, highlighting the growing importance of banks in the Indian economy.
Per capita deposits and per capita credit saw continuous growth, which indicates higher income levels, better banking penetration, and increased financial activity among the population. The credit-deposit ratio improved from 63% in 2005 to 79% in 2013, showing that banks were lending a larger share of their deposits to support economic growth. Overall, the data reflects the rapid expansion, modernization, and strengthening of the Indian banking sector during this period.