RBI issues Directions on The Mapusa Urban Co-operative Bank of Goa Ltd., Goa

Case Brief

RBI, exercising powers under Section 35A of the Banking Regulation Act, 1949 read with Section 56, issued Directions to The Mapusa Urban Co-operative Bank of Goa Ltd., Nandadeep, Mapusa, Goa. Effective from the close of business on July 24, 2015, the bank was barred from granting or renewing loans and advances, making investments, incurring liabilities including borrowings and acceptance of fresh deposits, disbursing payments, entering into compromises or arrangements, and selling or otherwise disposing of assets except as permitted under the RBI Directions. The order also capped withdrawals at ₹1,000 from each savings/current/other deposit account, subject to the stated conditions. RBI explicitly noted that the Directions were not to be construed as cancellation of the banking licence and that the bank would continue to conduct banking business with restrictions until its financial position improved.