Now, what exactly is a "scheduled bank"?
A scheduled bank is defined by section 2(e) of the Reserve Bank of India Act, 1934 to mean a bank included in schedules (1) to (3).
Schedule 1 mentions commercial banks that are divided into:
Public sector banks of two types, viz., (A) State Bank Group (B) Nationalized banks:
Private sector banks sub-divided into: (A) Indian banks and (B) foreign banks.
Schedule 2 mentions co-operative banks and schedule 3 mentions a large number of regional rural banks with the date of establishment of each such bank.
Apparently, a scheduled bank includes foreign banks and co-operative banks and therefore, there is nothing under the Bombay Public Trusts Act or the Income Tax Act to prevent trustees from operating bank accounts or placing trust funds in fixed deposit with such banks.
However, looking to the condition some of our co-operative banks are in, trustees should exercise tremendous caution before placing trust funds in the care of such banks. It may be a good idea to study the bank's financial position, the credibility of the Board and Directors and overall functioning of the bank.