Q Why is it in News ?
A The Reserve Bank of India (RBI) has informed that Airtel Payments Bank Ltd. has been categorized as a Scheduled Bank.
Q Why such a move?
- With this, the bank can now pitch for government-issued Requests for Proposals (RFP) and primary auctions.
- It can undertake both Central and State Government businesses participating in government-operated welfare schemes.
Q What are Scheduled Banks?
- Scheduled Banks refer to those banks which have been included in the Second Schedule of Reserve Bank of India Act, 1934.
- Reserve Bank of India (RBI) in turn includes only those banks in this Schedule which satisfy the criteria laid down vide section 42(6)(a) of the said Act.
- Every Scheduled bank enjoys two types of principal facilities: it becomes eligible for debts/loans at the bank rate from the RBI; and, it automatically acquires the membership of clearing house.
- Banks not under this Schedule are called Non-Scheduled Banks
Q What are various types of Scheduled Banks ?
A There are two main categories of commercial banks in India namely:
- Scheduled Commercial banks
- Scheduled Co-operative banks
Scheduled commercial Banks are further divided into 5 types as below:
- Nationalised Banks
- Development Banks
- Regional Rural Banks
- Foreign Banks
- Private sector Banks
Payment bank (currently four banks Airtel Payments Bank, Fino Payments Bank, India Post Payments Bank, Paytm Payments Bank have been granted Scheduled bank status).
Scheduled Co-operative banks are further divided into 2 types namely:
- Scheduled State Co-operative banks
- Scheduled Urban Co-operative banks