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Coastal Local Area Bank Limited, headquartered in Vijayawada, has been included in the Second Schedule to the Reserve Bank of India Act, 1934, gaining scheduled bank status.
The inclusion was made through RBI Notification DoR.LIC.No.S3539/22-03-070/2026-27 dated 28 July 2026, published in the Gazette of India (Part III, Section 4).
It becomes the only scheduled bank headquartered in Andhra Pradesh, while continuing to function as a local area bank.
As on 31 March 2026 the bank had deposits of Rs 994.72 crore, advances of Rs 910.05 crore, net NPAs of 0.21% and a CRAR of 24.81% against the 9% minimum.
Scheduled status opens access to RBI liquidity windows, money-market operations and refinance from NABARD and the National Housing Bank.
A bank becomes a 'scheduled bank' only when the RBI includes it in this Schedule. Section 42(6) sets the conditions - paid-up capital and reserves of at least Rs 5 lakh, and affairs not conducted in a manner detrimental to depositors.
Governs licensing, branch expansion and prudential supervision of all banking companies in India, including local area banks.
Central bank and banking regulator; licences banks and notifies inclusion in the Second Schedule
Apex development bank providing refinance to scheduled banks for agriculture and rural credit; established 1982
| Feature | Local Area Bank | Small Finance Bank |
|---|---|---|
| Scheme announced | 1996 | Guidelines 2014, first licences 2015 |
| Area of operation | Two to three contiguous districts | Nationwide, no area restriction |
| Priority sector lending target | 40% of adjusted net bank credit | 75% of adjusted net bank credit |
| Number operating | Two | Several, including Capital SFB which converted from a local area bank in 2016 |
General Awareness > Banking Regulation and the RBI
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A bank listed in the Second Schedule to the RBI Act, 1934, eligible for RBI liquidity facilities and money-market participation
Capital-to-Risk Weighted Assets Ratio - a bank's capital as a proportion of its risk-weighted assets; the RBI minimum for commercial banks is 9%
A small private bank licensed under the 1996 scheme to operate in two or three contiguous districts