RBI Derecognises Coӧperatieve Rabobank U.A. from Banking and Second Schedule Status

The Reserve Bank of India, through two separate notifications both dated 24 June 2026, has formally withdrawn the status of Coӧperatieve Rabobank U.A. as a banking company under the banking law framework in India and simultaneously removed it from the Second Schedule to the Reserve Bank of India Act, 1934.

This development has important regulatory, compliance, and transactional implications for businesses, assessee entities, and financial market participants who dealt with Coӧperatieve Rabobank U.A. in India.

This note provides a structured and practical analysis of:

  • What exactly the RBI notifications state
  • The statutory provisions invoked (Section 36A(2) of the Banking Regulation Act, 1949 and Section 42(6)(b) of the Reserve Bank of India Act, 1934)
  • The consequences of losing “banking company” and “scheduled bank” status
  • Key action points for assessee entities, corporates, and advisors

Background of the RBI Notifications

On 24 June 2026, the Reserve Bank of India issued two distinct notifications concerning Coӧperatieve Rabobank U.A. These were published under the following file numbers:

  • F. No. DOR.LIC.No.S2620/23.03.027/2026-27 – issued under Section 36A(2) of the Banking Regulation Act, 1949
  • F. No. DOR.LIC.No.S2621/23.03.027/2026-27 – issued under Section 42(6)(b) of the Reserve Bank of India Act, 1934

Both notifications are signed by R. LAKSHMI KANTH RAO, Executive Director, and relate specifically to the regulatory status of “Coӧperatieve Rabobank U.A.” in the Indian financial system.

Note: The notifications are formal legal instruments. Once issued and published, they carry binding authority unless superseded or modified through subsequent notifications or judicial intervention.

Provision Invoked: Section 36A(2) of the Banking Regulation Act, 1949

The first notification relies on sub-section (2) of Section 36A of the Banking Regulation Act, 1949. Under this provision, RBI has the power to notify changes relating to the status of an entity as a “banking company” within the meaning of the Act.

The notification expressly states that, with effect from the notification, Coӧperatieve Rabobank U.A. “has ceased to be a banking company within the meaning of the said Act.”

Implications of Losing “Banking Company” Status

Once an entity ceases to be a “banking company” as defined in the Banking Regulation Act, 1949, the following broad consequences arise:

  1. Inapplicability of core banking regulatory provisions
    Many compliance, prudential, and supervisory norms framed under the Banking Regulation Act, 1949 are specifically applicable to “banking companies”. Once that status is lost, those provisions no longer apply to the entity in that capacity.

  2. Impact on treatment as a bank under other Indian statutes
    Several fiscal and regulatory laws refer to banking companies or banks as defined under the Banking Regulation Act, 1949. For instance:

    • Certain provisions of the Income Tax Act 1961 refer to “scheduled banks” or “banks” for deduction of tax at source or special presumptive regimes.
    • Various SEBI, FEMA, and Company Law provisions rely on the concept of a bank/banking company in relation to escrow accounts, monitoring, due diligence, and fund flows.

  3. Effect on contractual arrangements
    Many finance documents (loan agreements, facility letters, security documentation, treasury contracts) may define “Bank” or “Lender” by reference to regulatory status. Where Coӧperatieve Rabobank U.A. was party to such arrangements, counterparties may need to examine:

    • Whether any covenants required dealings only with entities that are “banks” or “banking companies” under Indian law
    • Whether representations and warranties concerning regulatory status are affected
    • Whether any default, termination, or renegotiation triggers arise

  4. Customer and depositor considerations
    While Coӧperatieve Rabobank U.A.