RBI Directions under Section 35A of the Banking Regulation Act, 1949 (AACS) – Unlicensed District Central Cooperative Banks


            Three District Central Co-operative Banks situated in Maharashtra, have been issued certain directions by Reserve Bank of India on 01/06/2012;

  1. They shall not accept fresh deposits including Saving Bank (SB) Accounts, Current Accounts, Fixed Deposit Accounts, Recurring Deposit Accounts and/or any other deposit account by whatever name called.
  2. However, renewal of existing deposits would be allowed in the same name and same capacity.
  3. These directions dated May 09, 2012 shall come into force with effect from the date of receipt of it by respective banks and shall remain in force till further orders.
  4. The directions have been issued in exercise of powers vested in RBI under sub-section (1) of Section 35A of the Banking Regulation Act, 1949 (AACS) read with Section 56 of the Banking Regulation Act, 1949
  5. The directions were issued to a) The District Central Co-operative Banks namely the Osmanabad District Central Co-operative Bank Ltd., Osmanabad, b) The Jalna District Central Co-operative Bank Ltd., Jalna and ) The Dhule and Nandurbar District Central Co-operative Bank Ltd., Dhule.
  6. These directions dated May 09, 2012 shall come into force with effect from the date of receipt of it by respective banks and shall remain in force till further orders.
  7. The Directions addressed to respective DCCBs have to be displayed in their premises for interested members of public. Reserve Bank of India may consider modification of the Directions depending upon the circumstances.
  8. RBI has made it clear that these direction should not per se be construed as rejection of application of licence of the respective DCCB Banks .

 

 

As per Section 35A of the Banking Regulation Act, 1949, RBI can issue directions to any co-operative bank or class of co-operative banks if RBI is satisfied that doing so is necessary,

1.In the public interest or

2.In the interest of banking policy or

3.To prevent the affairs of the bank being conducted in a manner detrimental to the interests of the depositors or prejudicial to the interests of bank or

4.To secure the management of the bank generally, and the banks are bound to follow the directions

 

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