Schedule II Bank
Definition of 'Schedule II Bank'
A bank which is a subsidiary of a foreign bank and authorized to accept deposits within Canada. A Schedule II bank is a financial institution regulated by Canada's Federal Bank Act and can be owned either domestically or foreignly. A foreign Schedule II bank can be owned by non-residents, and a Canadian Schedule II bank is owned by a Schedule I bank.
Investopedia explains 'Schedule II Bank'
Schedule II banks are the most common type of bank in Canada, as many of the smaller credit unions, trusts and banks fit into this category. Although they are smaller, they are still regulated by the Federal Bank Act and have to adhere to the same strict policies put into place for consumer protection.
Under Bill C-8, implemented on October 24, 2001, the Schedule I and II bank structures were replaced with a new size-based ownership regime based upon the institution's equity.
Although the Schedule I and II bank structures have been replaced, these terms are still widely used to describe the two structures of banks in Canada.