RBI issues guidelines for DCCBs amalgamation; State approval must
RBI & NABARD to jointly vet the merger proposal
In a notification, which is sure to disturb a large chunk of co-op banks in the country, RBI has issued guidelines for the process of amalgamation of the DCCBs with the State Co-op Banks on Monday.
Paraphrasing its notification with the words that RBI is doing so due to request from several state governments, the apex bank has made it mandatory on the part of the state govt to make a proposal/request for the amalgamation, meaning thereby co-op banks on their own cannot do so. However, two DCCBs (without the involvement of state co-op bank) can also decide to amalgamate and ask the state govt to put a proposal on their behalf before the RBI.