As per the RBI rules, PACS and similar cooperative bodies are not allowed to style themselves as banks but there are instances in Odisha where the RBI rules are being flouted. This has angered the apex bank into asking Odisha’s state cooperation department to take immediate steps to stop it, reports Times of India.
Official sources said the RBI came across the illegal naming of cooperative societies as mini banks in Bhubaneswar and the Jagatsinghpur district.
Cooperative officials are quoted saying necessary steps are being taken to ensure that no cooperative societies or PACSs place the word ‘bank’ after the name of their organizations. The Cooperative Societies Act does not permit them to function like banks, officials admitted.