Abu Dhabi Commercial Bank PJSC (ADCB) is a leading banking institution in the United Arab Emirates. However, as of recent times, the bank has been undergoing some significant changes that will affect its operations in India. This article aims to provide a comprehensive overview of the recent developments, including the cessation of ADCB as a banking company under the Banking Regulation Act, 1949, and its exclusion from the Second Schedule to the Reserve Bank of India Act, 1934.
Cessation of ADCB as a Banking Company under the Banking Regulation Act, 1949
On February 23, 2023, the Reserve Bank of India (RBI) issued a notification announcing the cessation of ADCB as a banking company under the Banking Regulation Act, 1949, which has been published in the Gazette of India (Part III – Section 4) dated March 25 – March 31, 2023. As a result, the ADCB would no longer be able to carry on banking business in India.
Normally, the RBI takes such strict action after considering the bank’s financial position, the adequacy of its capital and reserves, and the bank’s compliance with the RBI’s regulatory requirements. Also, RBI takes necessary steps to protect the interests of depositors and other stakeholders.
Exclusion of ADCB from the Second Schedule to the Reserve Bank of India Act, 1934
Along with the cessation of ADCB as a banking company, the RBI also excluded the bank from the Second Schedule to the Reserve Bank of India Act, 1934. The Second Schedule to the Act lists the banks that are eligible to operate in India and outlines their respective regulatory requirements.
Now the ADCB will no longer be listed in the Second Schedule, and therefore, will not be able to operate in India as a banking company.
Implications of the Recent Developments
The recent developments will have significant implications for ADCB’s operations in India. As the bank will no longer be able to carry on banking business in India, it will have to wind down its operations and withdraw from the market. This will have implications for the bank’s employees, customers, and other stakeholders in India.
It remains to be seen how ADCB will respond to the developments and what steps it will take to mitigate the implications for its operations in India and globally.
