RBI classifies commercial banks in India into Scheduled Banks and Non Scheduled Banks. 

SCHEDULED BANKS

1. The scheduled bank is a bank that has been included in the Second Schedule of the Reserve Bank of India Act, 1934.

2. The RBI grants scheduled bank a status of a bank only if it fulfils certain conditions laid down in the RBI Act, 1934 and the Banking Regulation Act 1949, one of which is having a minimum paid-up capital of Rs. 5 lakhs. What is a paid up capital? click on the link to know

3. These banks are eligible for loans from the RBI at bank rate and are given membership to clearing houses. The Bank rate is the rate at which Scheduled commercial banks can borrow from the RBI for a long term. The clearing house is an institution that helps in the clearance of cheques and other instruments.

4. The list includes the State Bank of India and its subsidiaries, all nationalised banks (Bank of Baroda, Bank of India, etc.), regional rural banks, foreign banks (HSBC Holdings Plc, Citibank NA) and some co-operative banks. These also include private sector banks, both classified as old (Karur Vysya Bank) and new (HDFC Bank Ltd.).

5. The schedule bans are required to maintain a CAR or CRAR of at least 9%.

6. These banks are likely to be more secure as compared to non-scheduled banks.

7. As of 2025, there are 12 public sector scheduled banks but there were once 27 such public sector banks that have now been merged. There are 21 private sector schedule banks in India.

NON SCHEDULED BANKS 

1. Non-scheduled banks, by definition, are those which are not listed in the Second schedule of the RBI act, 1934.

2. Banks with a reserve capital of less than ₹5,00,000 qualify as non-scheduled banks.

3. Unlike scheduled banks, they are not entitled to borrow from RBI from normal banking purposes, except, in an emergency or abnormal circumstances.

4. Basically, these are small community banks in India that do not qualify to access funds directly from the RBI due to a lack of reserve capital, which makes them ineligible, except in extraordinary circumstances.

5. These banks are not subjected to any reserve requirement like CRR or SLR.

6. The safety and security of the depositors money of these banks are comparatively less as compared to scheduled banks.

7. There are more than 2000 non-scheduled banks active in India.

Further information can be found at RBI's website here