NET Web Desk
In an attempt to stop cooperative societies from misleading customers, the Reserve Bank of India (RBI) has warned cooperative societies against the use of the word ‘Bank’ in their names.
The RBI further in the statement said, “The act is a direct violation of the provisions of Banking Regulation Act.
It may be mentioned that, as per the Banking Regulation (Amendment) Act, 2020, co-operative societies do not have the right to use the work “bank”, “banker” or “banking” as part of their names, and only in cases where it has been permitted under the provisions of Act, or by the RBI.
The RBI further cautioned the general public in order to exercise caution while dealing with such Co-operative societies if they claim to be a bank.
The RBI rules said look for banking licenses issued by RBI before dealing with them. The rules of the RBI further said that the cover of insurance from Deposit Insurance and Credit Guarantee Corporation (DICGC) is also not available for deposits placed with societies not authorized to function as banks.