RBI Grants Scheduled Bank Status to Coastal Local Area Bank, India's First Local Area Bank
The Reserve Bank of India included Vijayawada-based Coastal Local Area Bank Limited in the Second Schedule of the RBI Act, 1934, giving India's first Local Area Bank scheduled status. Coastal Bank now becomes the only scheduled bank headquartered in Andhra Pradesh. Scheduled status opens access to RBI liquidity facilities and money-market operations, strengthening its funding base for expansion. Importantly, Coastal remains classified as a Local Area Bank despite the Second Schedule inclusion - the two categories are not mutually exclusive. The Local Area Bank scheme itself dates to a 1996 RBI framework meant to mobilise rural savings and lend locally within a compact three-district area.
The RBI was established on 1 April 1935 under the RBI Act, 1934, and nationalised on 1 January 1949; headquarters Mumbai | Banks in the Second Schedule of the RBI Act are called scheduled banks and must meet the paid-up capital and reserves criterion | The Local Area Bank scheme was introduced by the RBI in 1996