The Reserve Bank of India (RBI) has introduced a new rule today under the Banking Regulation Amendment Act 2020.
This rule is about changing the names of co-operative banks and has been announced through an official notification.
The RBI, which is the central bank and bank regulator of the country, has put forth fresh regulations for co-operative banks.
As per these regulations, co-operative banks are not allowed to change their names unless they receive written approval from RBI, indicating no objection to the name change.
RBI issued guidelines
Until the Reserve Bank certifies that there is no issue with the name change, the current name must be retained.
This is why RBI has chosen to issue guidelines outlining the process. No approval from CRCS or RCS will be required.
RBI has stated in its notification that these guidelines will be active as soon as this circular is issued.
These rules relate to Sections 49B and 49C of the Banking Regulation Act (BR Act) 1949, which are relevant to cooperative banks.
The regulations of Section 49B pertain to the Central Registrar of Cooperative Societies.
RBI also issued a clarification
In addition to the new rule, RBI has given further information, and this also applies to cooperative banks.
These guidelines are for all District Central Co-operative Banks (DCCBs).
In the future, District Central Cooperative Banks will need written approval from RBI to do things like opening new offices, starting new branches, putting in ATMs, and relocating their offices.
In the same way, RBI has stated that under the Banking Regulation Act of 1949, which applies to District Central Co-operative Banks, they must inform the Reserve Bank when they want to open new places of business or change their office locations.
In fact, RBI had been receiving complaints on this matter for some time, and there was a request for RBI to provide clarification about these rules.
DCCBs must obtain written permission from RBI
After looking into certain aspects of this issue, RBI has determined that DCCBs must obtain written approval from RBI when they wish to open new branches, establish new offices, or expand branches within the same city, village, or town. Guidelines are being provided for DCCBs to follow in this process.
These guidelines apply to all District Central Co-operative Banks.
