RBI issues New Prudential Regulations for AIFIs; Cancels Licence of Nashik Zilla Girna Sahakari Bank Limited, Nashik

RBI issues new prudential regulations for All India Financial InstitutionsThe Reserve Bank of India (RBI) issued the RBI (Prudential Regulations on Basel III Capital Framework, Exposure Norms, Significant Investments, Classification, Valuation and Operation of Investment Portfolio Norms and Resource Raising Norms for All India Financial Institutions) Directions, 2023 which will be applicable w.e.f. April 1, 2024.

  • These were issued by RBI in exercise of powers conferred by Section 45L of the RBI Act, 1934.


These will be applicable to the five All India Financial Institutions (AIFIs) viz.

  • Export-Import Bank of India (EXIM) Bank
  • National Bank for Agriculture and Rural Development (NABARD)
  • National Bank for Financing Infrastructure and Development (NABFID)
  • National Housing Bank (NHB)
  • Small Industries Development Bank of India (SIDBI)

Key Points:

i.The draft Directions were released for public comments on October 22, 2021, and the final were released on September 21, 2023.

ii.These new directives enforce Basel III standards and regulations for AIFIs, covering capital, exposure, investments, valuation, and resource raising norms.

iii.With these, RBI aims to ensures financial stability, safeguards interests, and enhances resilience of India’s financial sector through ongoing regulatory efforts.

Click Here for Official Guidelines

RBI cancels the licence of Nashik Zilla Girna Sahakari Bank Limited, Nashik, Maharashtra

With order dated 25th September 2023, RBI cancelled the licence of the Nashik Zilla Girna Sahakari Bank Limited, in Nashik, Maharashtra, since the bank did have an adequate capital and earning prospects.

  • The bank does not with the provisions of Section 11(1) and Section 22 (3) (d) read with Section 56 of the Banking Regulation Act, 1949.
  • Following this, the bank ceases to carry on banking business, with effect from 26th September 2023.
  • The authorities have requested the Commissioner and Registrar of Cooperative, Maharashtra, to initiate the bank’s winding up process and appoint a liquidator.


Following the cancellation of the licence, the bank is prohibited from conducting the business of ‘banking’ which includes, acceptance of deposits and repayment of deposits as defined in Section 5 (b) read with Section 56 of the Banking Regulation Act, 1949 with immediate effect.

Reason behind Cancellation:

i.It also failed to comply with the requirements of Sections 22(3) (a), 22 (3) (b), 22(3)(c), 22(3)(d) and 22(3)(e) read with Section 56 of BR Act, 1949;

ii.The bank’s continuation is detrimental to depositors, as its current financial position makes it unable to fully repay them, and harm public interest.

Key Points:

i.99.92% of depositors of the bank are eligible to receive their full deposits from Deposit Insurance and Credit Guarantee Corporation (DICGC).

ii.It should be noted that in case of liquidation, depositors can claim up to Rs 5 lakhs from the DICGC under the DICGC Act, 1961.

Recent Related News:

i.RBI has cancelled the banking licenses of two co-operative banks viz. Malkapur Urban Co-operative Bank Ltd(Malkapur UCB) based in Buldhana, Maharashtra, and Shushruti Souharda Sahakara Bank Niyamita(SSS Bank) based in Bengaluru, Karnataka.

ii.RBI cancelled the banking licence of two cooperative banks, Sri Sharada Mahila Co-operative Bank, Tumkur, Karnataka and Harihareshwar Sahakari Bank, Satara in Maharashtra.

About Reserve Bank of India (RBI):
Governor – Shaktikanta Das
Deputy Governors – Swaminathan Janakiraman, Michael Debabrata Patra, M. Rajeshwar Rao, T. Rabi Sankar
Establishment – 1st April 1935
Headquarters – Mumbai, Maharashtra

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