RBI extends curbs on UP-based People’s Co-operative Bank for 3 months

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RBI extends curbs on UP-based People’s Co-operative Bank for 3 months 

The Reserve Bank of India (RBI) has extended restrictions on People’s Co-operative Bank Limited, Kanpur, for a further period of three months from September 11 to December 10.

The bank has been under restrictions since June 10, 2020, through the directives issued under Section 35A of the Banking Regulation Act, 1949 (AACS).

“The validity of the directive, which was last extended up to September 10, 2021 has further been extended for a period of three months from September 11, 2021 to December 10, 2021 vide directive DOR.MON.D-35/12.28.059/2021-22 dated September 8, 2021 subject to review,” said an RBI statement on Saturday.

Section 35A of the Banking Regulation Act, 1949 gives the central bank power to give directions to banks and can take action, to prevent the affairs of any banking company being conducted in a manner detrimental to the interests of the depositors or in a manner prejudicial to the interests of the banking company.

As per the directives, the Kanpur-based co-operative bank has been barred from granting fresh loans and accepting deposits for six months without prior approval of the RBI, due to its weak financial position.

“In particular, no amount of the total balance across all savings bank or current account or any other account of a depositor may be allowed to be withdrawn,” the RBI had said in its statement on June 11, 2020, when it had imposed the restrictions.

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