What changed
RBI notified the inclusion of 9 new RRBs (e.g., Baroda Rajasthan Gramin Bank, Wainganga Krishna Gramin Bank) in the Second Schedule via notification RPCD.CO.RRB.No.7812A/2009-10. Simultaneously, 40 erstwhile RRBs were excluded from the Schedule via notification RPCD.CO.RRB.No.7812B/2009-10, both dated January 21, 2010, and published in the Extraordinary Gazette on March 12, 2010.
What it means for you
For banks and lenders, this formalizes the legal status of the amalgamated RRBs as scheduled banks, granting them access to RBI facilities and regulatory benefits. The exclusion of the 40 old RRBs means their separate legal identities cease, and all assets/liabilities now vest with the new entities. Lenders dealing with these RRBs must update their records to reflect the new bank names and ensure compliance with RBI's Second Schedule requirements.
What you must do
- Update internal systems and records to reflect the new RRB names and exclude the old ones from your counterparty lists.
- Verify that any transactions or exposures with the erstwhile RRBs are now correctly attributed to the amalgamated banks.
- Communicate with relevant branches and treasury teams about the change in legal status for these RRBs.
- Ensure compliance with RBI's Second Schedule requirements for any dealings with the new RRBs.
Who it affects
Regional Rural Banks (RRBs) and their sponsor banks, Lenders and financial institutions with exposures to these RRBs, RBI regional offices and regulatory compliance teams, Banking operations teams handling interbank transactions
Why were 40 RRBs excluded from the Second Schedule?
These 40 erstwhile RRBs were amalgamated into 9 new RRBs as part of a consolidation exercise. Their exclusion from the Second Schedule reflects the completion of the amalgamation, meaning they no longer exist as separate legal entities.
What is the effective date for these changes?
The notifications were issued on January 21, 2010, and published in the Extraordinary Gazette of India on March 12, 2010. The inclusion and exclusion are effective from the date of the notifications.
Do I need to update my bank's records for these RRBs?
Yes, if your bank has any transactions, exposures, or counterparty relationships with these RRBs, you must update your systems to reflect the new amalgamated bank names and remove the old ones to ensure accurate regulatory and operational compliance.