The Reserve Bank of India has extended the cash withdrawal and other restrictions on Kolikata Mahila Cooperative Bank Ltd., Kolkata by six more months from January 10, 2020 to July 09, 2020. In July last year, the central bank had stopped this cooperative bank from granting or renewing any loans and advances, make any investment, incur any liability, accept fresh deposits or disburse any payment without prior approval of the RBI in writing. The central had also allowed depositors to withdraw only up to Rs 1000 from their savings bank or current accounts. On Tuesday this week, the central bank extended the restrictions by six months.
‘The Reserve Bank of India, in public interest, had issued Directions to Kolikata Mahila Co-operative Bank Limited, Kolkata, West Bengal in exercise of its powers vested in it under Sub-Section (1) of Section 35 A read with Section 56 of the Banking Regulation Act, 1949 (AACS) from the close of business on July 09, 2019 which was valid till January 09, 2020. The Reserve Bank of India has now, in public interest, further extended the Directions for a period of six months from January 10, 2020 to July 09, 2020. A copy of the Directive is displayed at bank’s premises for perusal of public,” the RBI said in a statement on January 14, 2020.
Bank’s licence not cancelled!
The central bank clarified that its directions should not be considered as cancellation of the bank’s licence. “The issue of the above Directions by the Reserve Bank of India should not per se be construed as cancellation of banking licence. The bank will continue to undertake banking business with restrictions till its financial position improves. The Reserve Bank of India may consider modifications of these Directions depending upon circumstances from time to time,” RBI said.
What RBI said in July 2019
RBI had issued several directions related to transactions at Kolikata Mahila Cooperative Bank under Sub- Section (1) of Section 35A of the Banking Regulation Act, 1949(AACS) read with Section 56 of the Banking Regulation Act, 1949:
- The RBI directed that from the close of business on July 9, 2019, the coopearative bank “shall not, without prior approval of RBI in writing, grant or renew any loans and advances, make any investment, incur any liability including borrowal of funds and acceptance of fresh deposits, disburse or agree to disburse any payment whether in discharge of its liabilities and obligations or otherwise, enter into any compromise or arrangement and sell, transfer or otherwise dispose of any of its properties or assets except as notified in the RBI Directions dated June 27, 2019, a copy of which is displayed on the bank’s premises for perusal by interested members of the public.”
- For account holders of the bank, the RBI had said: “A sum not exceeding ₹1,000.00 (Rupees One Thousand only) of the total balance in every savings bank or current account or any other deposit account by whatever name called, may be allowed to be withdrawn by a depositor provided that wherever such depositor is having liability to the bank in any manner, i.e., either as a borrower or surety, the amount may be adjusted first to the relevant borrowal account/s, subject to the conditions stated in the above RBI Directions.”