Updated for 2026 Syllabus Detailed Explanations High-Yield Core Concepts

Bank Promotion Exam Guide

Banking Awareness | Banking Knowledge | for all Bank Exams

Module: General Practice

Q2: What are the two conditions Under section 42 (6) (a) of the RBI Act, a bank must satisfy to be considered a Scheduled Bank?

A
Paid-up capital of 2 lakh rupees and RBI approval
B
Paid reserve capital of 5 lakh rupees and conduct not harmful to depositors' interests
C
Minimum customer deposits and government authorization
D
Profitable operations and regular audits
✅ Correct Answer: B
Paid reserve capital of 5 lakh rupees and conduct not harmful to depositors' interests.
Under section 42 (6) (a) of the RBI Act, a bank is included in the second schedule if it satisfies these requirements.
This regulatory requirement is a key pillar of the Banking Structure in India.