What changed
Fincare Small Finance Bank Limited has been removed from the Second Schedule to the RBI Act, 1934, effective April 1, 2024. This follows its cessation of banking business from the same date, as notified earlier by RBI. The exclusion was published in the Gazette of India on May 14, 2024.
What it means for you
For banks and lenders, this confirms that Fincare Small Finance Bank is no longer a scheduled bank or a banking company, impacting any interbank exposures or regulatory treatment. Counterparties should update their records and review any credit or settlement arrangements with this entity. The move reflects a formal regulatory closure of its banking license.
What you must do
- Update internal systems to reflect Fincare Small Finance Bank's exclusion from Schedule II and its non-banking status.
- Review and adjust any interbank exposure, credit limits, or settlement arrangements with this entity.
- Ensure compliance with regulatory reporting requirements regarding scheduled bank status changes.
- Communicate the change to relevant departments like treasury, risk, and compliance.
Who it affects
All scheduled commercial banks, Small finance banks, Treasury and risk management teams, Regulatory compliance departments
What does exclusion from the Second Schedule mean?
It means the bank is no longer recognized as a scheduled bank under the RBI Act, 1934, losing associated privileges and obligations, including access to central bank facilities.
When did this change take effect?
The exclusion and cessation of banking business both took effect from April 1, 2024, as per RBI's notification.
Do we need to report this to RBI?
No specific reporting is required, but you must update your internal records and ensure any regulatory filings reflect the correct status of this entity.