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.

BREAKING DOWN '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.


  • Institutions with over $5 billion in equity are required to have no person owning more than 20% of the voting shares or 30% of the non-voting shares.
  • Institutions with equity of $1 billion to $5 billion have fewer restrictions on ownership, as they are only subject to having a public float of 35% of voting shares.
  • Institutions with less than $1 billion in equity have no ownership restrictions.


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.

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