The Reserve bank of India, on Wednesday said that the Co-operative Societies cannot use the word Bank in their names since it is a violation of Section 7 of the Banking Regulation Act, 1949 (As Applicable to Co-operative Societies) (the B.R.Act, 1949).
“It has also come to the notice of RBI that some Co-operative societies are accepting deposits from non-members / nominal members / associate members which tantamount to conducting banking business in violation of the provisions of the B.R.Act, 1949. Members of the public are hereby informed that such societies have neither been issued any licence under B.R.Act, 1949 nor are they authorized by the RBI for doing banking business,” a recent press release issued by the bank said.
The insurance cover from Deposit Insurance and Credit Guarantee Corporation (DICGC) is also not available for deposits placed with these societies, the bank said.
Members of public are advised to exercise caution and carry out due diligence of such Co-operative societies before dealing with them.
