Scheduled banks in India are those banks which are included in which schedule of which Act?
- A.First Schedule of the Banking Regulation Act, 1949
- B.Second Schedule of the Reserve Bank of India Act, 1934
- C.Second Schedule of the Banking Regulation Act, 1949
- D.Seventh Schedule of the Constitution
Correct answer
Explanation
The correct answer is B, the Second Schedule of the Reserve Bank of India Act, 1934. A bank is placed in that Schedule once it has the prescribed paid-up capital and reserves and satisfies the Reserve Bank that its affairs are not conducted in a manner harmful to depositors. Inclusion brings the right to borrow from the RBI at the bank rate, membership of the clearing house and access to the money market.
Options A and C name the Banking Regulation Act, 1949, which is the law on licensing, inspection and winding up of banks but does not carry the list of scheduled banks, so both are wrong. Option D, the Seventh Schedule of the Constitution, contains the Union, State and Concurrent Lists and has nothing to do with banks, although banking itself is an entry in the Union List. Remember the pair: RBI Act 1934 for the Second Schedule, Banking Regulation Act 1949 for regulation.
Read the full article: Types of Banks in India: Classification, Functions and MCQs
Practice Questions
View allWhat is the primary function of a commercial bank?
- A.Issuing currency notes and coins
- B.Conducting monetary policy
- C.Granting loans and accepting deposits
- D.Regulating the money supply
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A commercial bank exists to gather savings from those who have a surplus and lend them to those who need funds, and it earns from the gap between the interest it pays depositors and the interest it charges borrowers.
Read the full explanation →Which among the following is a public sector bank?
- A.Axis Bank
- B.ICICI Bank
- C.Bank of Baroda
- D.Yes Bank
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It was founded in 1908 by Maharaja Sayajirao Gaekwad III, nationalised in the first round of July 1969, and the Government of India still holds the majority of its shares, which is what makes a bank a public sector bank.
Read the full explanation →SEWA (Self-Employed Women's Association) Bank, a cooperative bank in Gujarat, was launched in India in ______.
- A.1974
- B.1894
- C.1994
- D.1874
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Women of the Self-Employed Women's Association at Ahmedabad, who worked as vendors, headloaders and home-based workers, pooled their own share capital and registered a cooperative bank of their own in 1974 because ordinary banks would not deal with borrowers who had no collateral and no paperwork.
Read the full explanation →Which of the following functions of Reserve Bank of India are correct? I. Banker to Banks II. Currency Issuer
- A.Only I
- B.Neither I nor II
- C.Both I and II
- D.Only II
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The Reserve Bank is banker to banks: every scheduled bank keeps an account with it, holds its cash reserve ratio there, settles payments with other banks through those accounts and can borrow from it when short of funds.
Read the full explanation →Which of the following is a payments bank NOT permitted to do?
- A.Accept demand deposits up to a prescribed ceiling
- B.Issue debit cards
- C.Grant loans and issue credit cards
- D.Remit money and make payments
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A payments bank is a differentiated bank licensed on the lines suggested by the Nachiket Mor Committee to carry payments and small savings to people the branch network had not reached.
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