The RBI on Monday cautioned the public against co-operative societies using ‘bank’ in their names as well as accepting deposits from people who are not their members.
After the amendment in the Banking Regulation Act, 1949, effective September 29, 2020, co-operative societies cannot use the words “bank”, “banker” or “banking” as part of their names, except as permitted under the provisions or by the Reserve Bank of India (RBI).
In a statement, RBI said it has come to notice that some cooperative 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 co-operative societies are accepting deposits from non-members/ nominal members/ associate members which is tantamount to conducting banking business in violation of the provisions.