What changed
RBI advised all scheduled commercial banks that State Bank of Saurashtra's name was removed from the Second Schedule to the RBI Act, 1934. The exclusion was formalized via a notification dated October 16, 2008, published in the Gazette of India on November 22, 2008.
What it means for you
State Bank of Saurashtra ceases to be a scheduled bank, losing associated privileges like access to RBI's liquidity facilities and statutory reserve requirements. For other banks, this is a routine regulatory update with no direct operational impact, but it may affect interbank exposures or legacy accounts linked to that entity.
What you must do
- Update your internal records to reflect State Bank of Saurashtra's non-scheduled status.
- Review any outstanding interbank transactions or exposures with State Bank of Saurashtra for compliance.
- Inform relevant departments (e.g., treasury, credit) about this change for risk assessment.
Who it affects
All scheduled commercial banks, Treasury and operations teams handling interbank relationships, Legal and compliance departments tracking bank status changes
What does exclusion from the Second Schedule mean for State Bank of Saurashtra?
It loses scheduled bank status, meaning it is no longer entitled to borrow from RBI at the bank rate or access other central bank facilities. It also no longer needs to maintain statutory reserves with RBI.
Does this circular affect other banks' operations?
No direct operational impact, but banks should update their records and review any exposures to State Bank of Saurashtra for regulatory or risk management purposes.