RBI extends action period on Amanath Co-operative Bank

Case Brief

The Reserve Bank of India has extended the existing Directions on Amanath Co-operative Bank Ltd., Bangalore for a further three months, from October 05, 2014 to January 04, 2015, subject to review. These directions, issued under Section 35A of the Banking Regulation Act, 1949 read with Section 56, continue to restrict the bank from granting or renewing loans and advances, making investments, incurring liabilities including borrowings and fresh deposits, disbursing payments, entering into compromises or arrangements, and selling or otherwise disposing of assets without prior RBI approval. The bank may permit withdrawals only up to Rs 1,000 per depositor account, subject to specified conditions. The press release emphasizes that this is not a cancellation of banking licence and that the bank will continue banking business with restrictions until its financial position improves.