Economy Simplified: What are Scheduled and Non Scheduled Commercial Banks?

Commercial Banks 

1. Commercial Banks are banking institutions that accept deposits and grant short-term loans and advances to their customers. They also provide medium-term and long-term loans to business enterprises.

2. Commercial banks also allow for a variety of deposit accounts, such as current, savings, and time deposit.

3. They lend to all sectors ranging from rural to urban.

4. Public deposits are the main source of funds for these banks.

Scheduled Commercial Banks	Non Scheduled Commercial Banks
Scheduled banks are banks that are listed in the 2nd schedule of the Reserve Bank of India Act, 1934.	Non-scheduled banks, by definition, are those that do not adhere to the RBI’s regulations.
Scheduled banks are liable for low-interest loans from the Reserve Bank of India and membership in clearinghouses.	They are not mentioned in the Second Schedule of the RBI Act, 1934, and are therefore deemed incapable of serving and protecting depositors’ interests.
They must, however, meet certain requirements, such as maintaining an average daily CRR (Cash Reserve Ratio) balance with the central bank at the rates set by it.	Non-scheduled banks must also meet the cash reserve requirement, but not with reserve banks, but with themselves.
The RBI allows Scheduled Banks to raise debts and loans at bank rates.
These banks have certain privileges and benefits, such as:The ability to obtain a refinancing facility from the central bank, Access to currency storage facilities, Membership in the clearinghouse is automatic.	They are risky to do business with due to their financial limitations.
	There are 11 Non-Scheduled State Cooperative Banks and 1500 Non-Scheduled Urban Co-operative Banks as described by RBI

Public Sector Banks

1. These are banks where majority stake is held by the Government of India or Reserve Bank of India. 

2. Examples of public sector banks are: State Bank of India, Corporation Bank etc.

Private Sector Banks

1. These are banks whose majority of share capital of the bank is held by private individuals. 

2. These banks are registered as companies with limited liability. 

3. Examples of private sector banks are: ICICI Bank, Axis bank, HDFC, etc.

Foreign Banks: 

1. Foreign banks are present in the country either through complete branch/subsidiary route presence or through their representative offices.

2. These banks are registered and have their headquarters in a foreign country but operate their branches in our country. 

3. Examples of foreign banks in India are: HSBC, Citibank, Standard Chartered Bank, etc