1. The banks which are not listed in the second schedule of the RBI act, 1934 are known as non-scheduled banks.
2. Banks with a reserve capital of less than 5 lakh rupees are qualified as non- scheduled banks.
3. There are five urban cooperative banks and three local area banks which function as non-scheduled banks in India.

All the banks which satisfied the norms and included in the second schedule to the RBI Act, 1934 are called scheduled banks.

Banks can be classified as follows:
A) Based on the functions of banks
B) Based on the status given by the RBI
C) Based on the ownership pattern
A) Based on the functions of banks ;
1) Central Bank
2) Commercial Banks
3) Development Banks
4) Co-operative Banks
5) Foreign Banks
6) Regional Rural Banks
7) Specialised Banks
8) Local Area Banks
9) Small Finance Banks
10) Payment Banks
11) Multilateral Development Banks
B) Based on status given by the RBI:
1) Scheduled Banks
2) Non Scheduled Banks
C) Based on the ownership Pattern
1) Private Sector Banks
2) Public Sector Banks
3) Co-operative Banks

Under this type, the banks are classified into scheduled banks and non-scheduled banks.
(i) All banks which satisfied the norms and included in the Second Schedule to the RBI Act, 1934 are called scheduled banks.
(ii) Such banks are given financial accommodation and remittance facilities at concessional rates by the RBI.
(iii) There is no non-scheduled commercial bank in India.
(iv) There are five Urban Cooperative Banks and three Local Area Banks which function as nonscheduled banks in India.
(v) Small Finance Banks and Payments Banks have not been licenses under Section 22 of the Banking Regulation Act, 1949.

(i) Huge finance required for investment expansion and modernisation of big industries and others are granted by a separate type of banks called development Banks. They are also called industrial banks.
(ii) The objective of development banks is not profit. Their aim is to develop the country and create employment opportunities.
(iii) Finance is provided by them for medium and long terms ranging from five to twenty years
(iv) Development banks do not accept deposits from the public. They subscribe the, shares and debentures of the industries. They provide technical and managerial consultancy services to industrialists.
(v) When a development bank is established for the development of agriculture industry it is called agricultural development bank.
(vi) Examples:
(1) IFCI - Industrial Finance Corporation of India
(2) SIDBI - Small Industries Development Bank of India
(3) MUDRA bank (for the development of micro industries).