BANKING AFFAIRS

Detailed explanation-1: -Banks with a reserve capital of less than 5 lakh rupees qualify as non-scheduled banks. Unlike scheduled banks, they are not entitled to borrow from the RBI for normal banking purposes, except, in an emergency or abnormal circumstances. Bangalore City Co-operative Bank Ltd.

Detailed explanation-2: -Initially introduced in the Union Budget in 1996, local area banks were created to provide financial services in local areas of their contiguous districts. These banks operate in the form of non-scheduled banks, and their activities are regulated and controlled by the Reserve Bank of India.

Detailed explanation-3: -Local Area Bank is set up as a private limited entity under the private sector to respond to the local’s credit and other financial needs and requirements, and that too in a competitive form. The banking activities of LAB are regulated and monitored by the RBI or the Reserve Bank of India.

Detailed explanation-4: -The scheduled banks are the banks that have been included under the Second Schedule of the Reserve Bank of India (RBI) Act, 1934. On the other hand, the non-scheduled banks are the banks that are not included in this schedule.