RBI/2023-24/78
DoR.REG/LIC.No.54/19.51.052/2023-24

October 30, 2023

Madam / Sir

Clarification regarding Shifting of Branches/Offices/Extension Counters within the same city, town or village by District Central Co-operative Banks (DCCBs) and Guidelines on Closure of Branches and Extension Counters by DCCBs

Pursuant to the amendment to the Banking Regulation Act (No.39 of 2020) dated September 29, 2020, District Central Co-operative Banks (DCCBs) are permitted to open new place of business/install ATMs or shift the location of such offices only after obtaining prior approval of the Reserve Bank of India (RBI). Accordingly, guidelines for opening of new place of business by District Central Co-operative Banks (DCCBs) – Section 23 of the Banking Regulation Act, 1949 (As Applicable to Co-operative Societies) were issued vide Circular DOR.REG.No.63/19.51.052/2022-23 dated August 11, 2022.

2. In this regard, RBI has been receiving references seeking clarifications on shifting of branches within the same locality and closure of un-remunerative branches by District Central Co-operative Banks (DCCBs).

3. On examination of the matter, it has been decided to issue requisites clarifications regarding Shifting of Branches/Offices/Extension Counters within the same city, town or village by DCCBs and Guidelines on Closure of Branches and Extension Counters by DCCBs, as enclosed in Annex - 1.

Commencement

4. These guidelines will come into effect from the date of issue of this circular.

Applicability

5. This circular is applicable to all District Central Co-operative Banks.

Yours faithfully

(Manoranjan Padhy)
Chief General Manager

Encl: Annex - 1 & 2

Annex to the Circular DoR.REG/LIC.No.54/19.51.052/2023-24 dated October 30, 2023

Annex – 1

A. Clarification regarding Shifting of Branches/Offices/Extension Counters within the same city, town or village by DCCBs

In terms of section 23(a), read with section 56 of Banking Regulation (BR) Act, 1949 (AACS), the District Central Co-operative Banks (DCCBs) may shift their Branches/Offices/Extension Counters located in the rural or semi-urban or urban/metropolitan areas, within the same village or town or locality/municipal ward respectively, without prior permission of Reserve Bank.

The DCCBs shall ensure that:

(a) The decision to shift branch shall be taken by the Board after taking into account all the relevant factors including viability and should be properly recorded/minuted in the proceedings of the Board meeting.

(b) The shifting of branch shall be approved by Registrar of Cooperative Societies, as required under Co-operative Act/Rules applicable.

(c) Due care shall be taken that customers of the branch, which is being shifted, are informed two months in advance so as to avoid inconvenience to them.

(d) A report in this regard shall be submitted by DCCBs in format, as per Annex – 2 enclosed with this circular, to the concerned Regional Office of Reserve Bank and National Bank for Agriculture and Development (NABARD) within a month from the date of such shifting.

(e) The DCCBs shall submit the branch licence in original to the concerned Regional Office of Reserve Bank for recording the change in the branch licence.

B. Guidelines on Closure of Branches and Extension Counters by DCCBs

DCCBs are allowed to close their un-remunerative branches without prior permission of Reserve Bank subject to the following conditions:

(a) The bank should not have been placed under any directions under section 35A of the Banking Regulation Act, 1949 (AACS).

(b) The decision to close down branches should be taken by the Board after taking into account all the relevant factors and should be properly recorded/minuted in the proceedings of the Board meeting.

(c) The closure of branch shall be approved by Registrar of Cooperative Societies of the respective state.

(d) The bank should give two months notice in advance to all existing depositors/ clients of the branch through press release in local leading newspapers as well as communicate to each constituent of the branch, well in advance of closure of the branch.

(e) It should return the original licence/s issued for the closed branch to the Regional Office concerned of Reserve Bank.

(f) The disposal of the premises occupied by the erstwhile branch should be reported to our Regional Office concerned, NABARD and the RCS.

(g) Bank should report to the Regional Office concerned of Reserve Bank and NABARD, in Form VI prescribed under Rule 8 of Banking Regulations (Co-operative Societies) Rules, 1966 after closing the branches, within one month from the date of closure, along with copies of the relative Board resolution and RCS approval.

(h) The bank should preserve all the relevant records and make them available to NABARD inspection team for scrutiny during the course of inspection.