RBI extends action period on Suri Friends’ Union Co-operative Bank

Case Brief

The Reserve Bank of India extended the existing directions against The Suri Friends’ Union Co-operative Bank Ltd., Suri, West Bengal, for six months from January 07, 2016 to July 06, 2016, subject to review. The directions had originally been imposed on April 07, 2014 due to the bank’s very precarious financial position and had already been extended three times up to January 6, 2016. The bank is restricted from granting or renewing loans and advances, making investments, incurring liabilities including borrowings and fresh deposits, disbursing payments, entering into compromises or arrangements, and selling or transferring assets without prior RBI approval, except as specifically notified. Depositors are permitted to withdraw only up to ₹1,000 per account, subject to the RBI’s conditions. The RBI noted that the order is not a cancellation of the bank’s licence and that the bank will continue banking business with restrictions until its financial position improves.