Co-operative societies can’t use the word “Bank” in their names, RBI cautions the general public
- Blog|News|FEMA & Banking|
- 2 Min Read
- By Taxmann
- |
- Last Updated on 24 November, 2021
Latest from Taxmann
Press release dated 22-11-2021
RBI has cautioned about Cooperative societies using the word “bank” in their names and for accepting deposits from non-members. RBI said that Cooperative societies can’t use the words “bank”, “banker” or “banking” as part of their names, except as permitted under the provisions of the Banking Regulations Act, 1949 or by the RBI. It also informed that Co-operative societies have neither been issued any license under Banking Regulations Act, 1949 nor are they authorized by the RBI for doing banking business.
According to Section 7 of the Banking Regulation Act, 1949, RBI noticed that some co-operative societies are using the word “bank” in their names in violation of the Banking Regulation Act.
It has also come to the notice of RBI that some cooperative societies are accepting deposits from non-members, nominal members, associate members which is equivalent to conducting banking business in violation of the prescribed provisions.
Cooperative societies are formed to promote the economic interests of their members. It can maintain accounts and accept deposits from its members only and not from non-members.
Additionally, insurance cover from Deposit Insurance and Credit Guarantee Corporation (DICGC) is also not available for deposits placed with these societies.
RBI quoted that “Members of the public are advised to exercise caution and carry out due diligence of such Co-operative societies if they claim to be a bank, and look for banking license issued by RBI before dealing with them
Click Here To Read The Full Notification
Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.
Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.
The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:
- The statutory material is obtained only from the authorized and reliable sources
- All the latest developments in the judicial and legislative fields are covered
- Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
- Every content published by Taxmann is complete, accurate and lucid
- All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
- The golden rules of grammar, style and consistency are thoroughly followed
- Font and size that’s easy to read and remain consistent across all imprint and digital publications are applied
Sign Up
To subscribe to our weekly newsletter please log in/register on Taxmann.com
Latest Books
Everything on Tax and Corporate Laws of India
To subscribe to our weekly newsletter please log in/register on Taxmann.com
CA | CS | CMA
