Co-operative societies cannot use Bank in their names: Warns RBI

Co-operative societies cannot use Bank in their names: Warns RBI The Banking Regulation Act, 1949 (BR Act, 1949) was amended by the Banking Regulation (Amendment) Act, 2020 (Act 39 of 2020) on September 29, 2020. As a result, except as permitted by the provisions of the BR Act, 1949 or the Reserve Bank of India, co-operative societies cannot use the words "bank", "banker", or "banking" as part of their names (RBI). The RBI has been informed that some Co-operative Societies are using the word "Bank" in their names, which is a violation of Section 7 of the Banking Regulation Act, 1949 (As Applicable to Co-operative Societies) (the BR Act, 1949). The RBI has also learned that some cooperative societies are accepting deposits from non-members/nominal members/associate members, which amounts to conducting banking business in violation of the provisions of the BR Act, 1949. Members of the public are hereby notified that such societies have not been granted a licence under the BR Act, 1949, nor have they been authorised by the RBI to conduct banking business. Deposit Insurance and Credit Guarantee Corporation (DICGC) insurance is also not available for deposits made with these societies. Members of the public are advised to exercise caution and conduct due diligence on such Co-operative societies if they claim to be banks, and to look for a banking licence issued by the RBI before doing business with them.