The Central Government had brought a new Act to bring the co-operative banks under the purview of the central bank RBI. This Banking Regulation (Amendment) Act, 2020 has been enacted with effect from April 1, 2021 for co-operative banks.
RBI’s new guidelines (file photo of Governor Shaktikanta Das)
Merging of Banks in India 2021: The Reserve Bank of India (RBI) has made a big statement on Monday pointing to the merger of co-operative banks. RBI said that the district would consider merging the Central Central Co-operative Banks— DCCBs with the State Cooperative Banks- StCBs. A proposal has been made by a state government in this regard.
Explain that the Central Government had brought a new Act to bring the State Co-operative Banks and District Central Cooperative Banks under the purview of the central bank RBI. The Banking Regulation (Amendment) Act, 2020 has been enacted with effect from April 1, 2021 for co-operative banks. Merging of banks requires the approval of the Reserve Bank of India.
State governments had approach, RBI will decide
Some state governments approached the central bank RBI to merge the district cooperative banks with the state cooperative banks as a 2-tier short-term co-operative credit structure, following which the Reserve Bank has come up with this guideline.
According to the new guidelines, the RBI will consider merger of banks when the state governments, after conducting a detailed study of the legal framework, proposes to merge one or more district cooperative banks with the state cooperative banks.
The news is being updated.