RBI Eases Closure Rules for District Central Co-operative Banks

October 31, 2023

The Reserve Bank of India (RBI) has announced a significant change in its regulations, allowing District Central Co-operative Banks (DCCBs) to close un-remunerative branches without seeking prior permission from the central bank. However, DCCBs will need approval from the Registrar of Cooperative Societies in their respective states. The RBI issued a circular outlining the new guidelines on Monday.

Streamlining Branch Closures

Under the updated regulations, DCCBs can make decisions to close branches, but such determinations must be made by their Boards. These decisions should take into account all relevant factors and must be documented in the minutes of the Board meeting, as stated by the RBI.

Additionally, the circular stipulates that DCCBs must provide a two-month notice in advance of branch closures to all existing depositors and clients. This notice should be published in local leading newspapers through a press release and communicated individually to each constituent of the branch.

Furthermore, the RBI mandates that DCCBs return the original licenses issued for any closed branches to the concerned Regional Office of the Reserve Bank.

It’s important to note that DCCBs will not be permitted to close branches if the RBI has imposed restrictions on the bank. In such cases, the closure request will not be entertained.

Change in Cooperative Bank Names

In a separate circular, the RBI has also outlined the procedure for cooperative banks to follow when changing their names. This procedure is aimed at streamlining and formalizing the process for cooperative banks seeking to alter their names.

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