RBI extends action period on Navodaya Urban Co-operative Bank

Case Brief

The Reserve Bank of India extended the earlier Directions issued to Navodaya Urban Co-operative Bank Ltd., Nagpur, Maharashtra, for a further four months. The Directions were earlier in force from March 16, 2017 to June 15, 2017 and were extended so that they remain valid up to October 15, 2017, subject to review. The release says the order was made under Section 35A of the Banking Regulation Act, 1949 (AACS), and clarifies that it is not a cancellation of the bank's licence. The bank may continue banking business, but only under restrictions until its financial position improves, and the Reserve Bank may modify the directions depending on circumstances.