RBI warns Cooperatives against using 'bank' in names
Published: Nov 29, 2017
By TIOLCORPLAWS News Service
MUMBAI, NOV 29, 2017: Reserve Bank of India (RBI) has noticed that some Co-operative Societies are using the word “Bank” in their names. This is a violation of Section 7 of the Banking Regulation Act, 1949. It has also come to the notice of RBI that some Co-operative societies are accepting deposits from non-members, nominal members and associate members which tantamount to conducting banking business in violation of the law.
Such societies have neither been issued any licence nor are they authorized by the RBI for doing banking business. The insurance cover from Deposit Insurance and Credit Guarantee Corporation (DICGC) is also not available for deposits placed with these societies. Members of public are advised to exercise caution and carry out due diligence of such Co-operative societies before dealing with them.