Banking Structure in India: 23 Revision Flashcards

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Test one fact at a time:open a card, recall the direct answer, then practise it in MCQ format.
Which banks in India are listed under the second schedule of the RBI Act, 1934?
Direct Answer
Scheduled Banks
What are the two conditions Under section 42 (6) (a) of the RBI Act, a bank must satisfy to be considered a Scheduled Bank?
Direct Answer
Paid reserve capital of 5 lakh rupees and conduct not harmful to depositors' interests
How many non-scheduled banks are currently in operation in India?
Direct Answer
Four
Which act defines the banks that are not included in the Reserve Bank of India (RBI) Act, 1934, and are thus considered Non-Scheduled Banks?
Direct Answer
Banking Regulation Act, 1949
What is the minimum paid reserve capital required for a bank to be considered a Scheduled Bank in India?
Direct Answer
5 lakh rupees
What is the significance of being a Scheduled Bank in relation to the RBI Act, 1934?
Direct Answer
Eligibility for loans from RBI
Which banks are not eligible for loans from RBI for their day-to-day general requirements?
Direct Answer
Non-Scheduled Banks
Which section of the Banking Regulation Act, 1949, defines the banks that are not included in the RBI Act, 1934?
Direct Answer
Clause (c) of Section 5 of the Banking Regulation Act, 1949
What is the primary criterion for a bank to be classified as a Non-Scheduled Bank in India?
Direct Answer
Not listed in the second schedule of the RBI Act, 1934
What is the primary classification of scheduled banks in India?
Direct Answer
Commercial and Cooperative Banks

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Why is the State Bank of India recognized as a separate category of Scheduled Commercial Banks (SCBs)?
Direct Answer
Because of the distinct statutes governing it
Which group in India includes Nationalized banks and the State Bank of India?
Direct Answer
Public Sector Banks
What characterizes private sector banks in India?
Direct Answer
Incorporated according to the RBI guidelines in 1993
How are foreign banks present in India?
Direct Answer
Through their representative offices
When were Regional Rural Banks (RRBs) established in India, and what is their primary objective?
Direct Answer
Established in 1976 to facilitate rural credit
What is the area of operation of Regional Rural Banks (RRBs) in India?
Direct Answer
Limited to specific states
Who are the joint owners of Regional Rural Banks (RRBs) in India?
Direct Answer
Government of India and Sponsor Banks
In what proportion is the issued capital of a Regional Rural Bank (RRB) shared among its owners?
Direct Answer
50%, 15%, 35%
Which bank holds the distinction of being the first Regional Rural Bank in India?
Direct Answer
Prathama Bank
What distinguishes co-operative banks in terms of ownership and membership?
Direct Answer
Owned by members who are also customers
How are co-operative banks often established in terms of community or interest?
Direct Answer
By persons from the same local or professional community or with a common interest
What is a characteristic feature of the banking products provided by co-operative banks?
Direct Answer
Limited banking products
What principle do co-operative banks follow in their functioning?
Direct Answer
No-profit no-loss