RBI approves amalgamation of The Rajapur Sahakari Bank Ltd. with The Malad Sahakari Bank Ltd.

Current Context: The Reserve Bank of India (RBI) has approved the voluntary amalgamation of The Rajapur Sahakari Bank Ltd. with The Malad Sahakari Bank Ltd. This amalgamation is effective from September 23, 2024.

• It is sanctioned under Sub-Section (4) of Section 44A read with Section 56 of the Banking Regulation Act, 1949.
• The branches of The Rajapur Sahakari Bank Ltd. will operate as branches of The Malad Sahakari Bank Ltd.
• This ensures a seamless transition for customers whose accounts, loans, and services will be transferred to the new entity.
• Employees of The Rajapur Sahakari Bank Ltd. will also be absorbed into The Malad Sahakari Bank Ltd., promoting job continuity.
• The merger aims to enhance financial stability, operational efficiency, and service offerings.
• It will expand the combined network’s reach and accessibility.
• All these changes will be under the regulatory oversight of the RBI to ensure compliance and safeguard stakeholder interests.

Question:

1 Under which sections of the Banking Regulation Act, 1949, was the amalgamation of The Rajapur Sahakari Bank Ltd. with The Malad Sahakari Bank Ltd. sanctioned?

• A) Section 44A and Section 56
• B) Section 35A and Section 56
• C) Section 45 and Section 57
• D) Section 42 and Section 55

Answer: A) The amalgamation was sanctioned under Sub-Section (4) of Section 44A read with Section 56 of the Banking Regulation Act, 1949, which provides the legal framework for the voluntary amalgamation of cooperative banks.