What changed
RBI notified that Sangli Bank Ltd's name was removed from the Second Schedule to the RBI Act, 1934 via a notification dated May 14, 2007, published in the Gazette of India on June 2, 2007. This exclusion was communicated to all scheduled commercial banks on September 7, 2007.
What it means for you
Sangli Bank Ltd loses its scheduled bank status, which affects its eligibility for RBI liquidity facilities and certain regulatory benefits. For other banks, this serves as a reminder that scheduled status can be revoked, impacting interbank transactions and counterparty risk assessments.
What you must do
- Update your internal records to reflect Sangli Bank Ltd's non-scheduled status for regulatory reporting and counterparty risk.
- Review any outstanding exposures or transactions with Sangli Bank Ltd and adjust risk weights or provisioning as per RBI guidelines for non-scheduled banks.
- Communicate this change to relevant treasury and credit risk teams to ensure compliance with interbank lending norms.
Who it affects
Sangli Bank Ltd, All scheduled commercial banks with interbank exposures to Sangli Bank Ltd, RBI's regulatory supervision team
What does exclusion from the Second Schedule mean for Sangli Bank Ltd?
It means Sangli Bank Ltd is no longer a scheduled commercial bank under the RBI Act, 1934. This typically results in loss of access to RBI's liquidity adjustment facility, refinance, and other central bank privileges, and the bank must comply with different regulatory requirements.
Does this affect other banks' transactions with Sangli Bank Ltd?
Yes, other banks should treat Sangli Bank Ltd as a non-scheduled entity for regulatory purposes. This may impact capital adequacy calculations, exposure limits, and reporting under RBI norms.
When did this exclusion take effect?
The exclusion was effective from the date of the notification, May 14, 2007, and was published in the Gazette of India on June 2, 2007. RBI communicated this to banks on September 7, 2007.