RBI extends action period on Mantha Urban Co-operative Bank

Case Brief

The Reserve Bank of India extended the validity of its existing Directions issued to Mantha Urban Co-operative Bank Limited, Jalna, Maharashtra under Section 35A read with Section 56 of the Banking Regulation Act, 1949. The earlier Directions, in force from the close of business on November 17, 2020, were valid up to May 16, 2021; RBI has now extended them from May 17, 2021 to August 16, 2021, subject to review. The Directions impose restrictions and/or ceilings on withdrawal and acceptance of deposits. RBI also clarified that the Directions should not be construed as cancellation of the bank’s licence, and that the bank will continue to undertake banking business with restrictions until its financial position improves.