What changed
RBI notified that The United Western Bank Ltd's name was removed from the Second Schedule to the RBI Act, 1934, effective November 25, 2006. The exclusion was based on a prior notification published in the Gazette of India on November 3, 2006.
What it means for you
For the banking system, this exclusion means the bank is no longer a scheduled commercial bank, losing privileges like access to RBI's liquidity facilities and clearing services. Lenders and counterparties should note that such a bank's regulatory status has changed, potentially affecting interbank transactions and deposit insurance coverage.
What you must do
- Verify the current scheduled status of any bank you transact with, especially if it has undergone regulatory actions.
- Update internal records to reflect that United Western Bank Ltd is no longer a scheduled bank for regulatory reporting.
- Review any exposure or interbank arrangements with this bank to assess credit and operational risks.
- Monitor RBI notifications for similar exclusions that may impact your counterparty risk assessments.
Who it affects
Scheduled commercial banks, Depositors and creditors of United Western Bank Ltd, RBI-regulated entities with interbank exposures
What does exclusion from the Second Schedule mean for a bank?
It means the bank loses its status as a scheduled bank under the RBI Act, 1934. This typically results in loss of access to RBI's liquidity facilities, clearing services, and certain regulatory benefits, and may affect deposit insurance coverage.
When did this exclusion take effect?
The exclusion was effective from November 25, 2006, which is the date the relevant notification was published in the Gazette of India.
Does this affect other banks' operations?
Yes, other banks should review any interbank exposures or transactions with United Western Bank Ltd, as its regulatory status has changed, potentially impacting settlement and credit risk.