On August 11th 2022, the Reserve Bank of India (“RBI”) published the guidelines on Section 23 of the Banking Regulation Act, 1949 (as applicable to Co-operative Societies) – opening of a new place of business by District Central Co-operative Banks (DCCBs) and issued guidelines outlining the requirements and procedure for DCCBs to submit applications for the same or the installation of ATMs.
Criteria for the opening of the new place of business
A DCCB must meet the following requirements before opening branches, extension counters, specialized branches, regional offices, zonal offices, administrative offices, shifting of branches, or upgrading extension counters into full-fledged branches:
Procedure For Opening A New Place Of Business
DCCBs meeting the requirements may submit their application in the format prescribed in the Banking Regulation (Co-operative Societies) Rules, 1966 to the concerned Regional Office (RO) of the RBI and a copy of the application to NABARD for prior approval for opening branches, extension counters, specialized branches, regional offices, zonal offices, administrative offices, shifting of branches, or upgrading extension counters into full-fledged branches.
DCCBs are permitted to set up on-site ATMs without taking prior permission from the RBI. Without seeking prior approval from the RBI, DCCBs may also set up off-site/mobile ATMs in their operational regions, provided they meet the requirements outlined. Additionally, DCCBs must make sure that their Board of Directors has duly approved the proposal for the installation of off-site/mobile ATMs. Following the operationalisation of the off-site/mobile ATMs, DCCBs are required to submit a report to the concerned RO of the RBI and obtain authorization under Section 23 of the Banking Regulation Act of 1949 (AACS) from the concerned RO of the RBI. However, DCCBs have to comply with the following conditions for the operation of off-site/mobile ATMs:
DCCBs are also allowed to offer all their goods and services through the ATM channel as long as the technology allows for it and adequate safeguards are put in place to avoid misuse of the channel.
- Shilpi Pandey, Senior Associate