Case Brief
The Reserve Bank of India, by directive dated May 29, 2019, placed Kerala Mercantile Co-operative Bank Ltd., No. 2626, Kozhikode, Kerala under Directions under Section 35A of the Banking Regulation Act, 1949 (AACS) read with Section 56. Under the order, each depositor may withdraw no more than ₹2,000 from every savings bank, current account, or other deposit account, subject to stipulated conditions. The bank is also barred, without prior written approval of RBI, 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 disposing of assets except as specifically notified. The directions are effective for six months from the close of business on June 4, 2019, and RBI stated that the order should not be construed as cancellation of the banking licence.
Action Snapshot
- Primary Impact
- Business restriction
- Entity Type
- Co-operative bank
- Location