RBI extends action period on Amanath Co-operative Bank

Case Brief

RBI has extended the Directions applicable to Amanath Co-operative Bank Ltd., Bengaluru for six months from January 05, 2015 to July 04, 2015, subject to review. These Directions, originally in force from April 05, 2013 and issued under Section 35A of the Banking Regulation Act, 1949 read with Section 56, continue to bar the bank from several core banking activities without prior RBI approval, including lending, investments, borrowing, accepting fresh deposits, making payments, and disposing of assets. Depositor withdrawals remain capped at Rs 1,000 per account subject to the stated conditions. RBI also clarified that the directions should not be construed as cancellation of the banking licence and that the bank may continue banking business with restrictions until its financial position improves.