This indicator pertains to Scheduled Commercial Banks (SCBs)—banks that are listed in the Second Schedule of the Reserve Bank of India (RBI) Act, 1934. These banks must comply with RBI’s regulatory norms concerning capital adequacy, asset quality, liquidity, and risk management. SCBs are categorised into various types, including public sector banks, private sector banks, foreign banks, regional rural banks (RRBs), and cooperative banks that conduct commercial operations. They offer a wide range of financial services such as accepting deposits, providing loans, managing payment systems, and delivering investment solutions. Public sector banks are the largest in terms of outreach and assets, while private and foreign banks lead in digital innovation and customer-centric services. The RBI exercises close supervision over SCBs to maintain financial soundness and trust.

This indicator is crucial for assessing the functioning and contribution of India’s formal banking sector to the broader economy. SCBs play a vital role in mobilising household and corporate savings, directing funds into productive investments, and supporting sectors such as agriculture, industry, and infrastructure. Their operations are fundamental to implementing monetary policy, promoting financial inclusion, and ensuring credit availability to underserved regions. The health and performance of SCBs directly influence economic stability, employment generation, and entrepreneurial growth. Monitoring this indicator helps policymakers and analysts gauge the effectiveness of banking reforms, identify systemic risks, and strategise toward a resilient and inclusive financial ecosystem, aligned with India’s goals for sustainable and equitable development.