Clarification on Shifting Branches/Offices/Extension Counters and Guidelines on Branch Closure by DCCBs
Introduction
The Reserve Bank of India (RBI) has introduced new guidelines regarding the shifting of branches, offices, and extension counters within the same city, town, or village by District Central Co-operative Banks (DCCBs). In addition, guidelines have been issued on the closure of unprofitable branches and extension counters by DCCBs.
Shifting of Branches/Offices/Extension Counters
DCCBs are allowed to shift their branches, offices, and extension counters within the same locality without prior approval from the RBI. However, certain conditions must be met:
- Decision-Making: The board of directors of the DCCBs should make a well-documented decision to shift a branch, considering viability and other relevant factors.
- Regulatory Approval: Shifting of a branch should be approved by the Registrar of Cooperative Societies, as required by applicable cooperative acts or rules.
- Customer Notification: Customers of the branch being shifted should be informed at least two months in advance to minimize any inconvenience.
- Reporting: DCCBs should submit a report to the concerned Regional Office of the RBI and the National Bank for Agriculture and Rural Development (NABARD) within one month from the date of shifting.
- License Update: DCCBs should submit the original branch license to the concerned Regional Office of the RBI to record the changes.
Guidelines on Branch Closure
DCCBs can close unprofitable branches without prior permission from the RBI, provided the following conditions are met:
- Regulatory Compliance: The bank should not be under any directives under section 35A of the Banking Regulation Act, 1949.
- Decision-Making: The decision to close branches should be made by the board of directors after considering all relevant factors and properly recording them.
- Approval: Branch closure should be approved by the Registrar of Cooperative Societies.
- Customer Communication: The bank should provide a two-month notice to existing depositors and clients through press releases in local newspapers and individual communication.
- License Return: The original licenses issued for the closed branches should be returned to the concerned Regional Office of the RBI.
- Premises Disposal: The bank should report the disposal of the premises occupied by the closed branch to the Regional Office of the RBI, NABARD, and the Registrar of Cooperative Societies.
- Reporting: The bank should report the branch closure to the concerned Regional Office of the RBI and NABARD, along with copies of the board resolution and RCS approval.
- Record Preservation: The bank should preserve all relevant records and make them available for scrutiny during inspections by NABARD.
| 1. | (i) Name of the bank | |
| ii) Address of the head office/ Central Administrative office | ||
| (iii) Total number of bank branches | ||
| (iv) Name of the office/branch(s/es) which has/ have been shifted and date of shifting | ||
| (v) With r/t (iv) above, please mention: i) Llicence No. & Date: ii) Approval No. & Date: |
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| (vi) Old address of the aforesaid office branch | ||
| (vii) New address of the aforesaid office/branch | ||
| (viii) Distance between the old and new addresses | ||
| (ix) Whether the entire office/ branch(s/es) functioning at the old address has/have been shifted to the new address or only a part of the office/some departments has/have been shifted? | ||
| (x) Reasons for shifting | ||
| (xi) Details of how premises at the old address will be disposed of / surrendered | ||
| 2. | (i) Whether the city/town in which the office is located is rural or semi-urban, or urban or metropolitan (as per last Census)? Please specify | |
| (ii) Whether the locality to which the office has been shifted is – a) predominantly residential (Rural/Urban) b) predominantly commercial (Rural/Urban) c) an industrial area(Rural/Urban) |
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| (iii) Are there any branches of other co-operative bank or commercial bank within 400 meters from the new address? If so, give details (i.e. names and distances from new location) |
| (iv) Is any other cooperative or commercial bank also located in the same building wherein the office/branch has now been shifted or in the building adjoining or opposite it? If so, give details. | ||
| 3. | (i) Have the new premises been acquired on lease/rent or self- constructed or purchased? Please specify: | |
| (ii) Has the Board approved such deviations? (If yes, please enclose a copy of the resolution) | ||
| (iii) Whether the shifting is being approved by RCS? (If so, enclose a copy of the approval) | ||
| (iii) In case the new premises have been purchased/self- constructed, has the bank obtained permission of the Registrar for investment of funds? If so, attach a copy of the Registrar’s orders If not, explain the reasons why permission is not obtained? |
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| 4. | Shifting of a bank’s Head Office/ Administrative Office (within the same locality) In case the bank has shifted its Head Office /Administrative office, will the bank’s registered address also change? If so, has the bank taken necessary action in this regard as required under the State Cooperative Societies Act? |
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| Has the bank sent a separate intimation of change of registered address to Department of Supervision of Reserve Bank of India (Central Office and Regional Office) and NABARD Regional Office, as required under the guidelines? | ||
| 5. | Will the bank’s bye-law need amendment? | |
| Confirm whether RBI NOC for alteration of bye-laws has been granted u/s 49C of BR Act, 1949 (Yes/No) | ||
| If Yes – Give details of bank’s request and RBI NOC (Furnish copy) | ||
| If No – Reason for not approaching RBI for grant of NOC u/s 49C of BR Act, 1949 | ||
| Details of CRCS/RCS approval (Furnish copy) |
Additional Information on Shifting Branches/Offices/Extension Counters
Here are a few additional points to further clarify the guidelines on shifting branches, offices, and extension counters:
No Changes to Bank’s Financial Structure: The shifting of branches, offices, or extension counters should not result in any changes to the financial structure of the DCCBs.
Address Change Communication: The DCCBs should communicate the new address of the shifted branch, office, or extension counter to the concerned Regional Office of the RBI and NABARD, as well as update the same information on their website.
Layout and Design: The DCCBs should ensure that the layout and design of the shifted branch, office, or extension counter are compliant with the regulatory and customer service guidelines issued by the RBI and NABARD.
Maintenance of KYC Records: The KYC records of customers served by the shifted branch should be transferred to the new location and maintained securely.
Continuity of Services: The DCCBs should ensure uninterrupted banking services to customers during the shifting process, with the primary objective of minimizing inconvenience.
Further Details on Branch Closure Guidelines
Here are a few additional details regarding the guidelines for branch closure by DCCBs:
Transition Support: The DCCBs should assist customers affected by branch closures by offering support in transferring their accounts to the nearest alternative branch.
Employees’ Rights: The DCCBs should adhere to the relevant labor laws and regulations while dealing with employees affected by branch closures, including considerations such as redeployment, reassignment, or compensation, as per the applicable agreements or policies.
Customer Feedback: The DCCBs should establish a mechanism to receive feedback from affected customers regarding the closure of branches, ensuring transparency and addressing any grievances promptly.
Conclusion
By following the guidelines provided by the RBI, DCCBs can effectively manage the shifting of branches, offices, and extension counters while minimizing disruptions to both customers and employees. Additionally, the regulations for branch closure ensure transparency, customer communication, and proper record maintenance throughout the process.
Disclaimer:
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