Merger of District Central Co-operative Banks (DCCBs) with State Cooperative Banks (StCBs) ?
RBI (Reserve Bank of India) will consider merger of District Central Co-operative Banks (DCCBs) with State Cooperative Banks (StCBs) if the concerned state government will make any proposal.
Why Merger of District Central Co-operative Banks (DCCBs) with State Cooperative Banks (StCBs) in news?
RBI has notified the guidelines for merging DCCBs with StCBs as two-tier Short-term Co-operative Credit Structure (STCCS).
The Banking Regulation (Amendment) Act, 2020 has also been notified in effect from April 1, 2021 for these banks.
The Merger of such banks will be finally be sanctioned by Reserve Bank of India.
What are the guidelines?
As per the guidelines, RBI will consider proposals of merger “when state government will make it” after studying detailed legal framework because cooperative is a state list subject .
Business model should be projected with clear profitability.
It also proposed governance model for merging bank.
Who will approve the merger?
NABARD in association with RBI will also examine and recommend proposals made by state government.
Scheme of amalgamation will be approved by requisite majority of shareholders.
What is Cooperative Banking ?
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