What changed
RBI notified that Sikkim State Co-operative Bank Ltd has been included in the Second Schedule to the RBI Act, 1934, effective from October 12, 2021, as published in the Gazette on January 18, 2022. This changes its status from non-scheduled to scheduled bank.
What it means for you
For Sikkim State Co-operative Bank, scheduled status means it can now borrow from RBI at the repo rate, access liquidity facilities, and enjoy enhanced credibility. For other co-operative banks, this signals RBI's continued recognition of well-managed state co-operative banks, potentially encouraging similar upgrades.
What you must do
- Update your records to reflect Sikkim State Co-operative Bank as a scheduled bank for interbank transactions.
- Review your exposure limits and risk weights for transactions with this bank, as scheduled status may affect regulatory treatment.
- Inform your treasury and compliance teams about this change for accurate reporting.
Who it affects
Sikkim State Co-operative Bank, All State Co-operative Banks, All Central Co-operative Banks, Banks with interbank exposure to Sikkim State Co-operative Bank
What does inclusion in the Second Schedule mean for a co-operative bank?
It means the bank is recognized as a scheduled bank under the RBI Act, 1934, entitling it to borrow from RBI, access clearing house facilities, and enjoy higher depositor confidence.
When did this change take effect for Sikkim State Co-operative Bank?
The inclusion was effective from October 12, 2021, with the official notification published in the Gazette on January 18, 2022.
Does this notification affect other co-operative banks directly?
No, it only applies to Sikkim State Co-operative Bank. However, it may serve as a benchmark for other state co-operative banks seeking scheduled status.