RBI extends action period on Shri Swami Samarth Urban Cooperative Bank

Case Brief

The Reserve Bank of India extended the Directions earlier issued to Shri Swami Samarth Urban Cooperative Bank Ltd., Naldurg (Osmanabad), Maharashtra for a further three-month period from February 14, 2015 to May 13, 2015, subject to review. These Directions, imposed 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 borrowing and acceptance of fresh deposits, disbursing or agreeing to disburse payments, entering into compromise or arrangement, and selling, transferring or otherwise disposing of properties or assets except as permitted by RBI. Depositors are allowed limited withdrawal of up to Rs. 1,000 from each savings, current, or other deposit account on one occasion during the directions period. RBI noted that the directions are not to be construed as cancellation of the banking licence and that the bank will continue banking business with restrictions until its financial position improves.