In Indian banking terminology, banks are classified as scheduled and non scheduled banks. A scheduled bank is a bank which meets certain criteria and is included in a specific schedule of the Reserve Bank of India. Which of the following statements correctly defines a scheduled bank?

Introduction / Context:
This question tests your understanding of a basic concept in Indian banking classification. The term "scheduled bank" appears frequently in economic surveys, RBI documents and financial newspapers. Knowing what exactly makes a bank a scheduled bank is important for both banking awareness and general economics sections in exams.

Given Data / Assumptions:

• The concept mentioned is "scheduled bank".
• The context is specifically Indian banking regulation.
• The options present various possible definitions, including nationalisation status and regulatory bodies.
• Only one option matches the legal meaning used in the Reserve Bank of India Act.

Concept / Approach:
In India, a scheduled bank is defined as a bank that is included in the Second Schedule of the Reserve Bank of India Act, 1934. Inclusion in this Schedule depends on certain conditions, such as minimum paid up capital and reserves, and the judgement of the RBI that the bank's affairs are not detrimental to the interests of depositors. This classification is independent of whether a bank is nationalised, private or foreign; what matters is whether it appears in the Second Schedule.

Step-by-Step Solution:
Step 1: Note that the question is about the formal definition of a scheduled bank, not about ownership. Step 2: Recall that scheduled banks are those listed in the Second Schedule of the RBI Act. Step 3: Examine the options. Option D explicitly mentions inclusion in the Second Schedule of the Reserve Bank of India Act. Step 4: Recognise that nationalisation or foreign ownership is not the deciding factor for this classification. Step 5: Select option D as the correct answer.

Verification / Alternative check:
Any standard banking awareness book or RBI publication will define scheduled banks exactly in terms of their inclusion in the Second Schedule of the RBI Act. These sources also emphasise that both public sector and private sector banks can be scheduled if they meet the criteria. This clear and consistent definition provides a reliable check that option D is correct.

Why Other Options Are Wrong:
A bank being fully nationalised means it is owned by the government, but some nationalised banks were once non scheduled before meeting the criteria, and many scheduled banks are not nationalised.
A privately owned bank can be either scheduled or non scheduled depending on whether it is included in the Second Schedule, so private ownership alone does not define a scheduled bank.
A bank based in a foreign country but operating in India may be a scheduled bank if it is included in the Second Schedule, but foreign origin is not a defining condition.
Being regulated only by the Ministry of Finance is incorrect because all banks are regulated by the Reserve Bank of India, and the term scheduled specifically relates to the RBI Act, not exclusive ministry control.

Common Pitfalls:
The main pitfall is to associate "scheduled" with "nationalised" and assume that only public sector banks can be scheduled banks. Another mistake is to think that scheduled refers to some kind of timetable or government programme rather than a legal schedule attached to an Act. To avoid confusion, remember the precise phrase "included in the Second Schedule of the RBI Act" whenever you see the term scheduled bank.

Final Answer:
A scheduled bank is correctly defined as a bank that is included in the Second Schedule of the Reserve Bank of India Act.