RBI extends action period on Amanath Co-operative Bank

Case Brief

RBI notified that the directions issued to Amanath Co-operative Bank Ltd., Bengaluru under Section 35A of the Banking Regulation Act, 1949 read with Section 56 will continue for a further six months from July 05, 2016 to January 04, 2017, subject to review. The bank remains 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 disposing of properties or assets without prior written approval of RBI, except as provided in the directions. The notice clarifies that this is not a cancellation of banking licence and that the bank may continue banking business with restrictions until its financial position improves.