Case Brief
The Reserve Bank of India issued directions to Mercantile Urban Co-operative Bank Ltd., Meerut under Section 35A of the Banking Regulation Act, 1949 (as applicable to co-operative societies) read with Section 56. Effective from the close of business on October 06, 2015, the bank was restricted from granting or renewing loans and advances, making investments, incurring liabilities, accepting fresh deposits, disbursing payments, entering into compromises or arrangements, and disposing of assets except as specifically permitted by RBI. The directions allowed limited withdrawals up to ₹1,000 from each savings/current/other deposit account, renewal of existing term deposits on maturity, permitted expenditure, and investment in Government/SLR-approved securities. RBI clarified that the order should not be construed as cancellation of the banking licence and that the bank would continue to undertake banking business with restrictions for six months, subject to review.
Action Snapshot
- Primary Impact
- Business restriction
- Entity Type
- Co-operative bank
- Location