RBI extends action period on Amanath Co-operative Bank

Case Brief

The Reserve Bank of India stated that the directions previously issued to Amanath Co-operative Bank Ltd., Bengaluru under Section 35A read with Section 56 of the Banking Regulation Act, 1949 shall continue from July 05, 2015 to January 04, 2016, subject to review. The order is a continuation of earlier restrictions first notified on April 01, 2013 and extended multiple times thereafter. The bank remains prohibited, without prior RBI approval in writing, from granting or renewing loans and advances, making investments, incurring liabilities including borrowings and fresh deposits, disbursing payments, entering compromises or arrangements, and selling or otherwise disposing of assets except as specifically permitted. The directions also allow only limited withdrawal of up to ₹1,000 from each savings/current/other deposit account subject to conditions. RBI clarified that these directions should not be construed as cancellation of banking licence and that the bank will continue to carry on banking business under restrictions.