The Reserve Bank of India (RBI) on Wednesday cautioned some co-operative societies against the use of word “Bank” in their names. “It has come to the notice of RBI that some Co-operative Societies are using the word – Bank – in their names. This is a violation of Banking Regulation Act, 1949 (As Applicable to Co-operative Societies),” the central bank said in a statement.
It also said that it has come to the notice some co-operative societies are accepting deposits from non-members or nominal members or associate members which tantamount to conducting banking business in violation of the provisions of the 1949 law, stressing such societies have neither been issued any licence under the act nor are they authorised by the RBI to undertake banking business.
The RBI also advised the public to “exercise caution and carry out due diligence of such co-operative societies before dealing with them”.