Which of the following is/are correct about non-scheduled banks in India? 1. A non-scheduled bank does not have to maintain CRR with the RBI. 2. Also it cannot lend money from RBI under LAF. 3. The banks named under second schedule of RBI Act 1934, are non-scheduled banks. Select the correct answer using the cods given below: |ForumIAS

[A] 1 only

[B] 2 and 3 only

[C] 1 and 2 only

[D] 1, 2 and 3

Answer: A

Notes:

Non-scheduled banks by definition are those which are not listed in the 2nd schedule of the RBI act, 1934.
They don’t conform to all the criteria under clause 42, but dully follow specific guidelines as laid down by RBI.
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. Bangalore, Baroda City Co-op. Bank Limited are a few examples.
Non- Scheduled Banks have to follow CRR conditions. These banks can have CRR fund with themselves as no compulsion has been made by the RBI to deposit it in the RBI.
Non- Scheduled Banks are also not eligible for having loans from the RBIfor day to day activities but under the emergency conditions RBI can grant loan to them.

Source: ForumIAS