The RBI on Monday said District Central Co-operative Banks are allowed to close their un-remunerative branches without prior permission of the central bank, though a nod will be needed from the Registrar of Cooperative Societies of the respective state.
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, the Reserve Bank of India said in a circular.
"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 the closure of the branch," it said.
Also, the District Central Co-operative Bank (DCCB) should return the original licence/s issued for the closed branch to the Regional Office concerned of the Reserve Bank.
However, DCCBs will not be allowed to close branches if restrictions have been imposed on the bank by the RBI.
In another circular, the Reserve Bank laid down the procedure to be followed for change in the name of cooperative banks.
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