Some co-operative societies are using the word “bank” in their name in contravention of section 7 banking regulation act, 1949 which is applicable to co-operative societies under the Act as per the Reserve Bank.
“Accordingly, co-operative societies may not use the words “bank”, “banker” or “banking” as part of their names, except under the provisions of the BR Act, 1949 or reserve Bank of IndiaThe regulator clarified in a release.
“The members of the public are hereby informed that no license has been issued to such committees under the BR Act, 1949 nor are they authorized by it. reserve Bank of India To carry on banking business,” the RBI said. “The insurance cover from the Deposit Insurance and Credit Guarantee Corporation (DICGC) is also not available for deposits with these societies. The members of the public are advised to exercise caution and caution regarding such co-operative societies if they claim to be a bank and refer to the banking license issued by RBI before dealing with them.
RBI has also observed that some co-operative societies are accepting deposits from non-members which indicates carrying on banking business in contravention of the provisions of BR Act, 1949.